This year, BTC has increased by 17.6% at the highest, ETH has increased by 18.2% at the highest, and other altcoins have increased by 8.1% on average, outperforming traditional commodities such as gold and achieving a good start to the year.

2. Sector rotation

With the approval of BTC spot ETF, digital currency has entered a bull market. Since October last year, altcoins have seen a sector rotation and rise. This month's performance is even stronger, and the on-chain lock-up volume has also increased sharply to US$76.5 billion. All sectors have seen good growth. GameFI in the Ethereum ecosystem has performed better than DeFi and Staking.

However, BTC still has an absolute dominant position, with a market value of 52% of the total market value of digital assets, ETH accounts for 17%, stablecoins account for 7%, and other altcoins account for 24%.

3. Stablecoins
Stablecoins are an important path to enter digital assets, so the capital flow of stablecoins determines the trend of digital assets. As can be seen from the above figure, stablecoins have continued to rise from the low point on August 19 last year to 138.623 billion US dollars, with a cumulative increase of 12.6% (15.61) billion US dollars, providing funds for the rise of digital assets.

4. Spot ETFs
The recent BTC market is basically driven by spot ETFs. As can be seen from the above figure, when ETF funds buy, the market rises. Starting from the 15th, ETF funds slowed down their purchases, the market went sideways, and funds began to flow into altcoins, causing BTC to go sideways and fall.

In the long run, ETFs have a continuous driving force for BTC. At present, GBTC's reduction has stabilized, accounting for 61.57% of the total ETFs, followed by IBIT's 17.02% and FBTC's 12.1%. The total holdings of ETFs are 731,500 BTC. I expect the holdings to exceed 2 million this year, close to 10% of the BTC circulation.