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

Bybit Learn

Blockchain

Sei is a Layer 1 blockchain ecosystem on Ethereum that focuses on creating a system allowing countless users to trade at lightning-fast speeds. Learn more here.

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The Sei network introduces a revolutionary new solution to the issue of scaling in the hope that their infrastructure will allow effortless trading of digital assets, no matter how big the blockchain gets. Sei's claims to being

 have certainly gotten them a lot of attention. Does the new project live up to all the hype and actually trump existing centralized exchanges (

), though? Here are some essential details to know.

Sei aims to improve speed and scalability while maintaining decentralization and capital efficiency. Sei believes that trading is one of the primary functions of any blockchain, and that blockchain systems are about to rapidly expand. Therefore, they’ve set out to establish a Layer 1 solution that would accommodate massive amounts of trading. In addition to creating the next generation of scalable, centralized trading, the team also hopes to provide users with helpful infrastructure in the form of a system that streamlines all types of trading, including crypto tokens, 

So far, Sei has managed to generate some impressive runtimes and attracted a lot of investor attention in its funding round. There are several different

 to achieve these exciting processing times.

Order matching engine allows the system to identify compatible orders and rapidly build 

 protocols for these matching orders. For example, if User A sells 1 ETH on exchange 1, and User B buys 1 ETH on exchange 2, Sei's order matching machine will bring together these two orders. Thanks to a deep pool of liquidity, the order-matching machine can resolve trades without major 

This mechanism relies on the fact that validators automatically share a lot of transaction info and store it in their 

. Sei allows validators to use this info to reconstruct a block quickly during block proposal, so they only need to wait for the block's entire contents to arrive if they can't already find the transaction details in their mempool. This results in a

Sei has added parallel order execution that lets its chain process multiple transactions simultaneously. The system checks to see whether transactions are related to each other. If they're not, the system runs them side by side instead of sequentially.

For large numbers of trades, the network allows users to place all their orders within a single block. This speeds things up because the network doesn't need to run multi-block transactions. Instead, users can efficiently combine all relevant orders in one block and place the entire order at a single time.

 and accepts them over a discrete period of time. Nothing is published until the entire auction interval is reached, so people don't have to worry about 

. Essentially, this ensures that traders who publish an order a few milliseconds after another don't end up paying artificially inflated or deflated prices.

 checks and displays asset prices. As a native oracle, it works seamlessly with Sei's systems. This allows users to get accurate pricing data as quickly as possible. The oracle is just one of many ways Sei hopes to streamline the trading process.

Sei hopes to become the most popular trading system for 

 development, so it offers a wide range of features. Users who trade on Sei benefit from these advantages.

Sei offers a lot of convenient technology in 

. Instead of only offering a basic blockchain for a single crypto, its platform supports multiple types of transactions. Following are some features of the Sei ecosystem.

Of course, one of Sei's biggest perks is its decentralized finance (

) options. The ecosystem contains trading apps and multiple exchanges through which users can buy and sell crypto. Sei also supports a variety of financial organizations that offer users lending, real estate, investments and other financial services.

If you're interested in buying, trading or creating 

, check out the Sei NFT offerings. Under the 

 page, you’ll see several Sei-supported NFT projects, exchange apps and marketplaces.

Sei also offers a variety of user-friendly services that make it easier to use its systems. You can pick from multiple wallets that let you store crypto securely and use it in the Sei ecosystem, as well as on other platforms.

Sei's unique mechanisms make it the fastest blockchain around. The ecosystem theoretically can process 20,000 transactions per second. Furthermore, it can finalize these transactions very quickly. Sei's time to finality is 500 ms, so it's theoretically one of the fastest blockchain networks in the market right now.

Sei is built on Layer 1 of the Ethereum chain, so it's an incredibly secure system. Not only is Sei backed by one of the world’s most reliable blockchains, but it features several additional components of decentralization that improve security. By avoiding centralization, the network ensures that malicious actors can’t manipulate their ecosystem.

, Sei can read and write data between other blockchains. This essential tool ensures the network can fully take part in web3 development, instead of remaining its own isolated ecosystem.

In order to celebrate the recent launch of Sei’s mainnet, Sei has decided on an 

 to recognize and reward early blockchain adopters from various platforms. 

To participate, users must transfer eligible digital assets into Sei. The Sei Foundation has identified active users from blockchains such as 

, as these platforms account for most of today's blockchain activity. 

To get started, create a Sei Wallet, such as 

, and ensure that it's updated. Then, link your off-chain wallet to a Sei address and transfer the tokens listed on Sei's bridging interface. Remember that while the Sei Foundation provides a consistent user interface, the actual bridging is managed by separate protocols like 

Sei Labs has come a long way since founder and former Robinhood Software Engineer Lead Jayendra Jog started the project with Jeff Feng in early 2022. The ecosystem was originally designed to be a decentralized exchange, but it gradually expanded to include more features. In the two years that Sei has been in active development, it's raised millions through a funding round and already designed and launched its essential features.

 its mainnet (Pacific-1) on Aug 16, 2023. Interested users can work with the developers to create projects on Sei and see how the ecosystem functions. When the testnet was first launched, 

The SEI token is integral to Sei’s decentralized proof of stake blockchain, fulfilling multiple roles:

There is a total supply of 10 billion SEI tokens, with a significant portion dedicated to the Sei community and Sei-based projects. The tokens are allocated as such:

The price of SEI is currently $0.152553 (as of Aug 22, 2023). It has a market cap of $271.3 million and a 24-hour trading volume of $82.1 million. SEI reached an all-time high of $0.455153 on Aug 16, 2023 and an all-time low of $0.144527 on Aug 21, 2023. 

Interested in acquiring this brand-new, fairly unknown token? Bybit is happy to announce that it will be offering the SEI/USDT Spot trading pair. To get started, simply sign up for a Bybit account, fund it with cryptocurrency and navigate to the 

In celebration of this listing, Bybit will also be holding 

 for users to share a 90,000 USDT prize pool!

From now through Aug 28, 2023, the first 1,750 new users to complete the following steps will be able to receive 20 USDT:

However, if you’re an existing user who created an account before Aug 14, 2023, 3AM UTC, you can still earn 10 USDT by accumulating a deposit volume of at least 100 USDT worth of SEI during the event period, or deposit 100 USDT and buy at least 100 USDT worth of SEI using your Bybit account.

The second event is open to all users, from now through Aug 29, 2023, 11:59PM UTC. Simply accumulate a Spot trading volume of at least 200 USDT worth of SEI to equally split the 40,000 USDT prize pool!

Since the Sei ecosystem has been created by a former Robinhood employee, and already has such fast transaction speeds, many crypto traders are looking forward to the project. People seeking to invest in a fast, reliable trading ecosystem can definitely consider investing in Sei.

However, cautious traders may want to wait a little bit before investing large amounts. Despite Sei’s claims to being the fastest blockchain, users still haven't been able to see how its technology will function in the real world as the project is still in its early stages.

Sei hopes to provide users with the best infrastructure for the next generation of crypto trading. The ecosystem combines multiple high-tech features to create a blockchain that can process transactions with incredible speed. And thanks to the inclusion of several user-friendly features, the platform is simple and convenient to use. Sei has already become the home to many crypto and DeFi projects, and now that its mainnet has launched, you can expect to see even more exciting progress.

Sei (SEI): Optimizing Trading With the Fastest Layer 1 Blockchain

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards