Jan 6, 2025: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Weekly Highlight — Markets Snap Five-Day Loss Streak 

Investors are now seizing the opportunity to buy the dip in U.S. stocks after a five-day decline that erased over $1 trillion in market value. Wall Street has broken its longest losing streak since April, with the Nasdaq-100 rebounding 1.7% and the S&P 500 rising 1.3% on Friday, January 3. These gains slightly offset the week's sell-off, which had continued into the new year following a tough December.

Despite concerns about slowing earnings growth among tech giants like the Magnificent Seven, traders remain optimistic, especially regarding AI leader NVIDIA Corporation. The market believes that, as long as retail investors keep investing in AI, the associated stock market boom is expected to persist. 

Stocks reached their session highs in the afternoon after Mike Johnson was reelected as speaker of the U.S. House of Representatives, indicating potential support for a business-friendly agenda. Meanwhile, bond yields rose, with the 10-year hitting 4.6% following comments from Richmond Fed President Tom Barkin about maintaining restrictive rates. U.S. manufacturing showed modest growth, with new orders at their highest since early last year, while investors assessed economic strength against the possibility of slower interest-rate cuts.

Weekly Crypto Highlight — AI Agent Spring Coming

Many investors are eagerly anticipating an Alt Season, a period when altcoins typically surge in value. However, current market dynamics suggest we may not see a widespread altcoin rally. The sheer number of tokens, combined with limited liquidity, has led to what's known as altcoin dispersion, making it crucial to select the right sectors and tokens.

, which are thriving even as the broader market declines. This nascent sector is experiencing rapid advancements, and its associated tokens face less pressure from venture capital unlocks. Many of its top protocols lack centralized exchange listings, indicating more buyers may enter the market.

Those investors who missed previous opportunities, such as the DeFi summer of 2020 and the Alt Layer 1 trade, now have another chance. Instead of targeting individual AI agents, the best risk/reward strategy lies in investing in infrastructure plays, which serve as the foundational tools for the sector.

The leading AI agent player is Virtuals Protocol, a platform for launching tokenized AI agents on the Base network. By purchasing tokens like Luna by Virtuals (LUNA) and VaderAI (VADER), users gain governance rights over specific agents, which allows them to both influence development and share in profits. 

Recently, daily protocol fee revenues dropped significantly in mid-December 2024 as activity slowed for the holidays. However, speculation around agent-associated tokens surged as the new year approached. Currently, Virtuals Protocol generates over $1 million in daily fees, though this is 50% less than figures for early December. Despite these challenges, the VIRTUAL token has more than doubled in value, reaching a market capitalization of $4.6 billion.

Other highlighted opportunities include Zerebro, which is pivoting to a full-stack framework for AI agents; ARC, with its Rust-based framework; and 

 (GRIFFAIN), a natural language on-chain search tool. These projects are well-positioned for future growth in the evolving landscape of AI technology.

 as we delve into leading AI agent tokens and the past week’s market movements. 

Advanced

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Weekly Institutional Insights: Market Snaps Five-Day Loss Streak; AI Agent Spring Coming

Our weekly crypto derivatives analytics report delves into macro events, the current state of crypto and trading signals from spot trading volume, and futures, options and perpetual contracts.

December's end-of-year options expiration brought an unexpected drop as realized volatility fell to the lowest levels of the month. Perpetual swap open interest remained stable, indicating these markets weren't heavily used for hedging against expired options, likely contributing to the muted volatility. 

While most expired open interest in Bitcoin (BTC) and Ethereum (ETH) hasn't been reinvested, the balance of calls and puts remains consistent. Notably, ETH options are pricing in higher implied volatility as compared to BTC, particularly for shorter expirations, leading to a flat term structure for ETH, while BTC is offering cheaper options exposure.

In the perpetual markets, low volatility and minimal spot movements have led funding rates for nearly all tokens to mirror broader market sentiment throughout the holiday season. On the options side, BTC's term structure is noticeably lower and steeper than ETH's, with realized volatility now dipping below implied volatility levels, highlighting an intriguing shift in market dynamics.

Please check out the report’s highlights.

Open Interest Solid Amid Year-End Options Expiration

Although open interest for both BTC and ETH perpetual swaps hasn’t returned to early December 2024 highs, it remained robust throughout the significant end-of-year options expiration event. This suggests that these markets weren’t heavily utilized to 

 of the expiring options contracts, likely contributing to the lack of volatility observed during this period. Instead, trading volumes have dipped noticeably during the winter holiday season, coinciding with a collapse in realized volatility back to December 2024’s lowest levels.

BTC Option Curve Remains Steep During Call-Put Parity

The expiration of December's end-of-year options didn’t trigger the anticipated surge in volatility; instead, realized volatility has plummeted to the lower end of its recent range. The implied volatility term structure remains steep compared to both its recent behavior and ETH's, with longer-dated implied volatility around 57%, and 1-week at-the-money options trading about five points lower. Much of the expired open interest hasn’t yet been rolled into new positions, maintaining a neutral balance between puts and calls. Consequently, BTC's options market positioning is relatively neutral, lacking the leverage it had at the start of December 2024.

Huge ETH Option Expiring Doesn’t Cause Volatility

A late December spike in realized volatility didn’t carry into the new year, with ETH’s spot price currently exhibiting volatility below that of short-tenor implied volatility. Interestingly, the implied volatility term structure has undergone a steepening and re-flattening over the past week, contrasting with BTC’s slightly steeper profile. This suggests that ETH’s options market is anticipating higher short-term volatility in spot price movements. 

Despite the significant expiration of options open interest at the end of December 2024, which didn’t lead to a rollover into later expirations, call options continue to dominate the market and have increased at the start of 2025.

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Bybit X Block Scholes Crypto Derivatives Analytics Report (Jan 2, 2025): BTC Options Continue to See Call-Put Parity, With Lower Short-Term Volatility Expected

Dive into FLock, a decentralized platform that revolutionizes the way AI models are developed, trained and deployed.

Artificial intelligence (AI) is poised to transform countless industries, but its development often raises questions about privacy, control and inclusivity. 

 is a unique decentralized platform that democratizes AI training, fine-tuning and inferencing. With its blockchain-powered infrastructure, FLock ensures transparency, security and community-driven decision-making, paving the way for AI models that align with established societal values. 

In this article, we’ll explore how FLock decentralizes AI training, its key features and its potential impact on developers, communities and users.

 platform that revolutionizes the way AI models are developed, trained and deployed. By leveraging blockchain technology and a novel approach called 

, FLock addresses critical issues in AI development, such as centralized control, lack of transparency and privacy concerns.

At its core, FLock’s mission is to democratize AI by enabling communities to participate directly in the creation and refinement of AI models. Through federated learning, FLock trains AI models across multiple decentralized devices or servers. This method ensures that data remains local, eliminating the need for raw data exchange while still enabling robust model training. By decentralizing the training process, FLock not only protects individual privacy, but also fosters a more inclusive ecosystem in which diverse contributors can collaborate.

What sets FLock apart is its integration of 

. This ensures that all contributions — whether data, compute power or feedback — are transparently recorded and fairly rewarded. Blockchain tech’s immutable ledger enhances trust among participants and safeguards the process against manipulation. Additionally, the platform’s on-chain incentive mechanisms encourage participation from a wide range of contributors, ensuring that rewards are distributed equitably.

Ultimately, FLock empowers communities to develop bespoke AI models tailored to their specific needs. By decentralizing the process and prioritizing transparency and collaboration, FLock breaks the monopoly of large corporations, creating an AI ecosystem that aligns with public ethics and societal values.

, an Oxford alumnus with a robust background in AI and blockchain technology. Sun, who serves as FLock's CEO, has an impressive career trajectory, having worked as the Director of AI for the Royal Bank of Canada and as an AI Research Fellow at Imperial College London. His vision for FLock stems from a deep understanding of both the technical and ethical challenges of AI development.

The founding team also includes other Oxford alumni, boasting over a decade of combined experience in AI research and the cryptocurrency industry. This team brings a collective blend of academic excellence and practical expertise that positions FLock to lead the decentralized AI movement.

FLock has successfully raised $11 million in funding across two rounds, reflecting strong investor confidence in its vision. In May 2024, FLock secured a $6 million seed round co-led by Lightspeed Faction and Tagus Capital, with additional backing from Digital Currency Group (DCG), Volt Capital, OKX Ventures and Inception Capital.

Later, in December 2024, FLock announced a $3 million successful funding round led by DCG and joined by prominent names like Animoca Brands, Fenbushi Capital, GnosisVC and GSR. These investments are being channelled into enhancing the platform’s testnet and federated learning client, accelerating FLock’s mission of enabling secure, collaborative AI development.

With this funding and over 1,500 nodes contributing from platforms like Numerai and Kaggle, FLock is rapidly scaling its impact on decentralized AI training.

FLock AI revolutionizes AI development through its decentralized training framework. This approach allows participants to contribute to AI model training without ever sharing their personal data. Instead, models are trained locally across devices using federated learning, which ensures that data remains with its owners while still enhancing the accuracy of the model overall. 

FLock’s reward system is designed to incentivize active participation. Contributors who provide data, computational power and/or feedback are compensated with FLOCK tokens, ensuring a fair distribution of rewards. 

FLock empowers its community through a robust governance framework. Decisions regarding AI model development, deployment and ethical considerations are driven by the community, ensuring alignment with established societal values. Through blockchain-based voting mechanisms, contributors can influence the direction of AI projects, fostering transparency and public accountability. 

FLock’s modular architecture allows contributors to participate in specific aspects of AI model development. Whether providing raw data or computational power or even refining algorithms, the platform enables a collaborative and scalable development process. 

At the core of FLock’s philosophy is its commitment to privacy and security. By leveraging blockchain technology, the platform ensures that no single entity controls the AI development process. Data remains local and protected by cryptographic measures, while the immutability of blockchain guarantees transparency in every transaction and model update. 

 begins with a blockchain and an AI layer.

The blockchain layer underpins FLock’s incentivization and security mechanisms.

The AI layer facilitates model training, refinement and deployment, leveraging both centralized and federated approaches.

Let’s have a look at the supply and demand for the FLOCK token.

FLock adopts a 1:2 ratio model between team/investors (33.3%) and community (66.7%), prioritizing community-driven growth and ecosystem expansion. The majority of tokens are allocated to incentivize user participation and long-term ecosystem success.

FLock aims to improve the future of AI development by decentralizing the training process and ensuring transparency, privacy and inclusivity. By leveraging blockchain and federated learning, FLock empowers communities to contribute to AI creation without compromising on privacy. Its innovative reward system and community-driven governance foster a fair and collaborative ecosystem. 

With significant backing and a growing network of contributors, FLock is positioning itself as a leader in decentralized AI, offering a more ethical and secure alternative to traditional AI development models. As it continues to scale, FLock is set to transform the way AI models are built and deployed.

 — and earn a share of a 10 million FLOCK prize pool. For more details, visit 

Intermediate

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FLock AI: Decentralized AI Training

In this tutorial, we’ll explore how you can complete a series of tasks in Network3 for Bybit Web3 Airdrop Arcade.

Task 1: Register for a Network3 Account and Connect Your Bybit Wallet 

: Navigate to the campaign page and click on the 

task. Click on the task, and Galxe will ask to redirect you to the Network3 register page.

: Register for a Network3 account using your email address. You may indicate a 

Task 2: Download the Network3 App and Run a Node for One Hour

 and choose your operating system to download the Network3 app.

 or powerbutton, depending upon which operating system you’re using. For ease of reference, we’ve used macOS and iOS as examples below.

: Keep running the node until the timer reaches 

Beginner

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How to Complete Network3 Tasks for Bybit Web3 Airdrop Arcade

Altcoins

DeFi

Blockchain

The Coti protocol is an enterprise-grade Layer 1 proof of work (PoW) blockchain protocol with a DAG structure that can achieve almost instant transaction consensus. Coti seeks to become a global payment network with its high transaction speed and secure network.

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As we know, traditional finance is plagued with many pressing issues such as merchant fees and cross-border barriers. Digital currency transactions powered by 

 technology offer a potential solution. However, it is not perfect either because of its low transaction speeds, delays in payment confirmations and many scalability issues.

Using a combination of blockchain technology, 

 (DAG) technology and a unique consensus algorithm, the Coti network provides an unprecedented level of security, scalability and low transaction costs for users, thereby eliminating many existing concerns in the global payment industry. 

Read on to learn all about this groundbreaking payment network that promises to revolutionize the way people process payments around the world.

The Coti protocol is a unique enterprise-grade 

) blockchain protocol with a DAG structure that can achieve almost instant transaction consensus thanks to its speed of over hundreds of thousands of transactions per second (

Coti seeks to become a global payment network by enabling instant payments to the world for all online transactions through its flagship product — 

. Coti also strives to empower global organizations by allowing them to build their own payment solutions on the Coti platform through the use of 

. Businesses can create their own branded stablecoins with Coti’s unique MultiDAG technology. The DAG structure is popular for enabling solid scalability and massive transaction throughput. Many popular cryptocurrencies like 

 have adopted the DAG protocol for this same purpose.

Coti offers an end-to-end digital finance solution for global enterprises worldwide. By accessing COTI Pay, companies can set up their payment gateways in no time. 

COTI Pay allows consumers to make payments in interoperable COTI 

 tokens. Payments are made even more seamless and convenient with Coti’s universal payment solution (UPS) which processes instant payments for merchants and allows consumers to customize their preferred payment methods (both crypto and fiat). 

This eliminates cross-border payment difficulties, and companies get to save on operational expenses. This also increases the reach of companies as their customers can pay using their preferred currency. 

The Coti protocol also enables enterprises to develop and issue customizable stablecoins via its white-label payment network, COTI Whitelabel. For instance, a company can create a stablecoin in its own name and peg its value to fiat currencies like the USD or EUR. With this, companies can avoid intermediaries while not worrying about the volatility of cryptocurrencies. The COTI Whitelabel even allows companies to issue their own loyalty programs on COTI Pay.

The best part? The adoption of Coti services has already begun. Popular blockchain network 

 has partnered with Coti to issue an overcollateralized algorithmic stablecoin, 

Coti runs on a multiDAG protocol known as the 

. This protocol can validate multiple transactions simultaneously instead of waiting for one transaction to complete before processing a new one. 

There are no gas costs in this network as transactions are not processed in blocks, with only minimal fees required for smart contract executions. Therefore, Coti’s Trustchain MultiDAG protocol allows faster processing times while reducing gas fees. 

And as a MultiDAG structure, Coti has independent Clusters that can support their own tokens. This enables dedicated stablecoins to be generated for businesses to build their private payment networks, such as Cardano’s launch of its stablecoin DJED. 

Contrary to the typical PoW algorithm, Coti uses a new consensus mechanism known as proof of trust (PoT). This consensus does not require miners to solve complex algorithms, and hence it does not require huge amounts of energy. Instead, COTI introduced a concept known as Trust Score. The intention behind this is to encourage good network behavior and reward high trust score members with faster confirmation times and lower fees. 

The Trust Score is a fundamental innovation in the Coti protocol which plays a crucial role in the network's functioning. Trust Scores apply to all actors in the network – nodes, users, merchants and financial institutions. 

While the Trust Scores may be computed differently depending on the participant’s role, Trust Scores will generally increase over time as each actor continues to participate in the network. Meanwhile, a Trust Score of zero means that the actor has committed a malicious act and is banned from using Coti.

Coti also provides added protection to its buyers and sellers with the Arbitration Service which helps to monitor and manage disputes. The Arbitration Service is made up of a decentralized party of highly trusted network actors known as jurors who vote on disputes. Jurors then earn a fee from their ruling. They are incentivized to vote honestly because after a ruling is made, if the juror’s vote differs from the group, they will lose their arbitration fees.

Launched in 2019, COTI (Currency Of The Internet)is the native cryptocurrency of the entire Coti ecosystem. It has immense utility within the network, such as paying transaction fees, node incentives and rewards for staking COTI tokens. 

As mentioned, COTI plays a crucial role in the functioning of the Coti network. Apart from fueling the interaction between merchants, consumers and mediators, COTI is used as a reward currency for participants who contributed to the network's functioning. Below are a few areas where the utility of the COTI token can be found.  

COTI is used to pay fees for all transactions within the network. The token is also used to pay arbitrators and node operators who run the COTI protocol.

Every node operator must stake COTI coins to validate a transaction in the network. All the incentives for these operators will be in the form of COTI. Depending on the type of node, the minimum amount of COTI required for staking will differ.

Arbitrators must hold COTI to engage in arbitration and resolve disputes between buyers and sellers in order to earn COTI fees. 

 (APY) that is adjusted every 60 seconds according to the treasury balance. The rewards are auto-compounded with a multiplier of x1, but you can adjust your risk/reward level up to a multiplier of x8. Note that while you can remove your staked COTI at any time even if you set a locked period, an early withdrawal fee of up to 2% of your deposit will be charged. To avoid paying the withdrawal fees, you can change the locked period to unlocked, but you will not be able to withdraw your COTI for a minimum of 24 hours. 

Price prediction experts mostly anticipate a modest increase for this coin. 

 COTI price to reach $0.35 in 2025 and cross the $1 mark in 2030. 

 on COTI in the long term and expects its price to hit $0.30 in 2025 and exceed $3 by 2030. 

Is Coti Protocol (COTI) a Good Investment? 

While COTI may not see a huge leap in its prices over the long run, you can expect a gradual but steady increase, thereby making it a relatively safe investment. This is because the Coti protocol strives to be a full-fledged financial ecosystem with plentiful use cases. With its solid use cases within the network, COTI is bound to increase in value if the Coti protocol positions itself as a market leader. Its partnership with Cardano also signifies the growing strength of the protocol, and as it continues to make strong partnerships with major blockchains, COTI would be seen as a valuable coin to hold indeed.

Please note that the above is not financial advice and you should always do your own research before investing in volatile 

COTI can be bought on popular decentralized exchanges like 

, and on top centralized exchanges such as Bybit. On Bybit, you can trade COTI as a derivative. 

 involve a contract where you will be betting on the asset's future price and not on the actual asset.  

At Bybit, we have made derivative trading simpler by pairing altcoins with USDT. All the 

 on Bybit are quoted and settled in USDT. 

Coti is a revolutionary digital payment network that offers an innovative approach to the existing online payments landscape. With its cutting-edge technology, Coti is setting new standards for safe and secure transactions with unprecedented speed and low fees. As more merchants begin accepting cryptocurrency as a payment option and seek an all-encompassing financial ecosystem for seamless online payments, demand for COTI will likely increase significantly over time. 

Coti Crypto: Instant Payment Around The World

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards