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

Blockchain

Threshold Network overcomes the limitations of Wrapped Bitcoin (WBTC) with its fully decentralized ETH-BTC bridge. Read on to find out more about this intriguing blockchain and token.

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Despite being the world’s first crypto coin, 

 in terms of use cases. The only use case for Bitcoin until now has been as an investment asset. In contrast, the Ethereum blockchain’s token, ETH, has emerged as more than just a digital currency. ETH facilitates use of the Ethereum platform for the development of other cryptos, and for the execution of smart contracts and decentralized applications. While 

 (WBTC) enables BTC to be used on Ethereum, a third-party custodian must still convert BTC into WBTC. Threshold Network overcomes this security issue with its fully decentralized BTC-ETH Bridge.

 is the first-of-its-kind product of a merger between two decentralized protocols — 

 (KEEP) — to provide full security and privacy to its users. 

Threshold Network takes its structural elements from Keep Network, and privacy elements from NuCypher. The combined network provides a suite of Threshold cryptography services that aim to solve some of the biggest concerns around privacy, as well as granting users full sovereignty over their digital assets on the public blockchain. Its services include proxy re-encryption service (PRE) and the 

 (DApps) is enabling the growth of a new era of the internet, also popularly referred to as web3. However, the current web3 platforms built on public blockchains present risks to user privacy. Through proxy re-encryption service (PRE), Threshold Network provides a unique solution for user privacy concerns in web3. The proxy re-encryption allows users to control access to sensitive data on public networks without exposing the underlying data to any external party or validator.

Apart from addressing concerns over privacy and usability of users’ data, Threshold cryptography endows digital assets with greater utility in a secure and trustless manner. This is achieved with its decentralized tBTC bridge, which connects Bitcoin to Ethereum, thus bringing more liquidity to the Ethereum ecosystem. There’s no need for an intermediary or third party to convert BTC to the tBTC token, an ERC-20 token that can be used in the Ethereum network.

Threshold cryptography works by distributing sensitive operations across multiple nodes in a network. These nodes operate as independent entities. For any operation to be successful in the network, a minimum number of entities (or threshold) need to cooperate with each other. Threshold cryptography reduces dependence on trusted parties, as no single actor can manipulate the system. If some bad actors do crop up, Threshold Network’s cryptographic primitives will continue to function safely as long as a minimum number of participants follow the rules.

Threshold Network Token — T — is the native token of the Threshold Network. It serves as both a utility token for the network and as a governance token for Threshold 

. This token has multiple use cases within the Threshold ecosystem.

It not only facilitates the running of the network, but also offers multiple ways to earn. For instance, the T token can be used to stake a node and reap rewards. Holders of T token can help run Threshold Network by staking and running a decentralized node to verify any network activity.

As a governance token for holders, T is required to vote on important decisions on the network. T token holders can ensure the decentralized and community-driven nature of the network by participating in the Threshold DAO.

The total supply of T tokens is 10 billion, of which 4.5 billion coins have been allocated to NU holders and another 4.5 billion to KEEP holders. The remaining 1 billion T tokens have been allocated to the Threshold DAO. As of time of writing, its circulating supply sits at 8.25 billion T tokens.

tBTC is a Bitcoin-backed token that can be minted on the Ethereum blockchain. The tBTC protocol helps bring Bitcoin to Ethereum in a permissionless and secure way. It’s also the only decentralized option available for using BTC on the Ethereum network. 

Currently, the most common way of using BTC on ETH is to keep Bitcoin in the custody of a centralized provider, who then issues a tokenized version of BTC on Ethereum (such as Wrapped Bitcoin, or WBTC). This means that users have to place their trust in a third-party intermediary — which defeats the main principle of Bitcoin and cryptocurrency in general: To be open and decentralized. 

With the help of Threshold cryptography and crypto-economic incentives, tBTC replaces the centralized custodian model, enabling permissionless minting of BTC on Ethereum. Each tBTC token is pegged to Bitcoin at a 1:1 ratio. tBTC v1 was launched in May 2020, but the protocol ultimately lacked scalability, due to high collateral requirements. Threshold developers are now planning to introduce tBTC v2 in order to eliminate the scalability constraints of tBTC v1. tBTC v2 will be the first noncustodial solution to bridge BTC to Ethereum at scale. 

Scaling with tBTC v2 would bring about the seamless transfer of millions of BTC across Ethereum (and other networks), making Threshold Network a viable competitor to WBTC while remaining completely permissionless and decentralized. If the launch is successful, the ability to freely and securely use Bitcoin in Ethereum DeFi platforms could potentially affect a breakthrough in the crypto world.

Four Ways to Earn in the Threshold Network

There are four roles by which T token holders can earn in the network: Staker, Liquidity Provider, BTC/tBTC User, and Token Holder.

A three-tiered DAO system governs the Threshold ecosystem. It is the key to keeping the ecosystem decentralized. Each tier holds the other two accountable, while also performing its individual responsibilities within the governance structure. In simple words, the three tiers work in the same way as checks and balances do in a centralized authority. The current value of the total treasury holding of Threshold DAO is 

. Let’s take a detailed look at the three bodies: Staker DAO, Token Holder DAO and the Elected Council.

The Staker DAO consists of holders who stake their T tokens on the network. It’s responsible for, delegate voting, executing proposals, and submitting proposals on-chain. This DAO has the core decision power in the network, as stakers run decentralized nodes to verify transactions on the network. The voting power of stakers is determined by the size of their stake.

The Token Holder DAO consists of T holders who deposit into tBTC coverage pools. Just like the Staker DAO, they also have to delegate votes, submit on-chain proposals, and execute the proposals. The Token Holder DAO also manages the Treasury and makes T mining decisions, and is empowered to veto proposals from the Staker DAO to maintain accountability in the network. It’s expected that in the future, it will also be responsible for electing and removing Council members.

The Elected Council DAO has nine seats. Four of these seats are for Keep Network community members, another four for NuCypher community members, and one seat is for a mutually elected independent member. In the future, Council elections will draw nominees to the Elected Council from the united Threshold community. The Council is responsible for setting staker rewards. It can also veto harmful proposals in order to maintain accountability and ensure that the network remains decentralized. 

Threshold Network Price Prediction — Is the Threshold Network Token a Good Investment?

In line with the overall bearish trend that has sent crypto assets’ market caps falling, the Threshold Network market cap fell from an all-time high (ATH) $859.9m to $300.25, a 65% decline in just three months. 

Its price has also dropped 27% in the last three months. It currently trades near $0.037, according to exchange data at the time of this writing (July 21, 2022). The token is around 81% below its all-time high (ATH) of $0.197, achieved on March 2, 2022. In the wake of the global 

of May 2022, the leverage crisis at major crypto lenders, and overall negative global cues in the last two months, the T Token price plunged to an all-time low of $0.032 on June 13, 2022. It has recovered around 16% since then. 

Unluckily, T cryptocurrency was launched in a year when crypto markets have witnessed one of the largest price corrections in history. Since the crypto market sentiments continue to remain in the “extreme fear” zone, due to uncertainties, it isn’t easy to predict T’s future price. However, Threshold Network’s revolutionary potential for solving security concerns and bridging the gap between Bitcoin and other blockchain networks puts the T token in a sweet spot. The Threshold price may rise sharply after the launch of 

Additionally, the network has a well-defined progression path, and plans to further boost community-driven decisions. While several crypto networks that promise to offer decentralized services are actually centralized in structure, Threshold offers a truly decentralized platform. If the tBTC v2 launch is successful, it will open a whole new stream of earnings for Bitcoin holders planning to make the most of DeFi growth without compromising the ownership of their asset. This will also potentially push the T token price upward in the next bull run in crypto markets. 

, expecting it to rise to an average of $0.086 in 2023 and surge to $0.50 by 2027.

The price trends indicate a bearish trend that’s likely to continue in the coming months. But considering Threshold Network strong fundamentals, crypto users may consider investing in this crypto for the long term. However, it’s imperative to always do your own research before making any investment decisions. 

Users can check Threshold crypto's live price data and buy it on Bybit, which offers the T/USDT pair for spot trading. Simply follow the steps below to buy the Threshold token on the Bybit exchange.

and verify your account to complete the sign-up process. 

Before trading T token, you’ll first need to buy USDT. Visit the 

 page, and buy USDT via Express, P2P, or the Fiat Deposit channel.

 and you’ll be redirected to the trading terminal.

On the right panel of the trading terminal, you can buy the Threshold token with USDT. 

Threshold Network is an ambitious blockchain which aims to remove at least two big limitations of the crypto verse. First, Threshold’s cryptographic services empower users with absolute security and privacy. Secondly, the network offers a truly decentralized and trustless way for Bitcoin holders to trade and invest their assets on Ethereum-based platforms. With the upcoming launch of the

, the untapped potential of both Bitcoin’s liquidity and yield opportunities on the Ethereum network promise to revolutionize the crypto space.

Threshold Network: The First Truly Decentralized BTC-ETH Bridge

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards