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 Guide

Be a part of Bybit's inner circle — understand what are the common terms ByBuddies use to build a Crypto Ark.

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Bybit is a pioneer in the crypto industry, evolving from a crypto derivatives exchange to a full-fledged purveyor of cutting-edge trading products and solutions. Bybit’s journey has transformed it into a Crypto Ark, a visionary infrastructure builder that bridges the digital and real worlds. 

In this article, you'll learn how Bybit incorporates and normalizes these crypto terminologies into its daily routine. 

Importance of Crypto Terms in Crafting Bybit’s Crypto Ark

Understanding crypto terms is a critical aspect of crafting a Crypto Ark. These concepts provide a framework for understanding the cryptocurrency market’s dynamics and equipping traders with the knowledge necessary to make informed trading decisions. 

For instance, crypto investors often use the term 

 to describe the strategy of holding onto a cryptocurrency, regardless of market fluctuations. Similarly, 

 refers to the panic buying that occurs when investors fear they might miss out on a potentially lucrative investment opportunity.

These terms and others like them form the basis of the crypto trading strategy. They encapsulate the market sentiment, investor behavior and the potential direction of cryptocurrency prices. While there are plenty of terms users need to be familiar with, we've shortlisted the most important ones for getting to know Bybit a little better.

Now that you have a brief understanding of the importance of crypto terms, let's delve into the ones that Bybuddies most commonly use at Bybit.

 refers to a trusted, user-friendly partner that mimics an ark as users "board" it for their crypto trading and web3-building journey with Bybit. It's a metaphorical boat that carries your investments through the fluctuating tides of the market.

A Crypto Ark adapts to the needs and aspirations of different audiences — from internal staff seeking support and purpose to newcomers looking for education and safety, and advanced traders and web3 enthusiasts seeking collaboration and innovation. It represents a diverse and inclusive ecosystem for everyone involved in the crypto and web3 space. 

This term is used widely for Bybit's social media handles — and for content circulating with the hashtag #TheCryptoArk — to encourage users to grow with us.

 are a community of traders, investors and Bybit employees who often share tips, strategies and insights to help each other navigate the world of cryptocurrency trading. 

Bybit welcomes traders of all backgrounds to join the team and be part of an accelerated community thriving in their investments and knowledge. As a Bybit user, you can proudly address yourself as a Bybuddy — committed to fostering a healthy, nurturing and growing community of like-minded individuals helping Bybit achieve its mission and vision.

. Originally, it referred to speculative purchases, rather than to general optimism about prices and trend lines. It can refer to a bullish market, in which asset prices are growing rapidly, or in the context of bullish investors who have a positive outlook on an asset’s price, foreseeing general gains. For example, if an investor is bullish about Bitcoin’s price, they believe it will rise. And if a Bybuddy says they’re bullish about a new product launch, it means they’re confident the product will receive good public traction. 

 (a misspelled form of “build”) refers to the continuous building and development of blockchain and cryptocurrency in the ever-growing ecosystem — instead of passive HODLing. 

At Bybit, employees and investors use the term BUIDL as a movement, believing that growth isn’t limited just to the accumulation of wealth but also to actions that count. The word is used to emphasize and empower the community to contribute proactively as they improve crypto adoption among the masses. In retrospect, the origins of BUIDL have yet to be verified, but the term unmistakably encourages the development of the overall DeFi ecosystem. 

This is a program created exclusively on Bybit to encourage crypto enthusiasts to join forces to build a Crypto Ark collectively as a community. It is built to amplify voices from the grassroots and foster a community that shapes the narrative of Bybit and the broader crypto world.

 is where innovative thinkers and content creators at the grassroots level take center stage to drive change in our ecosystem and beyond. A picture says a thousand words; 

are urged to innovate, collaborate and spread their crypto influences anywhere, anytime through creative brainstorming, organizing initiatives, and collectively promoting Bybit's missions. 

 is ingrained in Bybit’s culture. We value feedback to help us enhance our overall products and services. In short, we welcome all feedback, suggestions and concerns. We’re committed to listening, caring and improving in order to bring crypto trading to the next level together on The Crypto Ark. If you have a pressing issue and need help, 

 and Bybuddies will be there to listen and send help your way. 

This term asserts that a crypto asset will significantly appreciate in price. Like “bullish,” 

 portends that a crypto asset will appreciate in value off the charts. For example, at Bybit we say, “Let’s go to the moon together” as an expression to spread positive vibes about a topic of discussion.

Understanding crypto terms is one thing. Knowing how to 

 is another. To leverage these terms, you need to keep abreast of the latest developments in the crypto world. Regularly interact with your crypto buddies, join online crypto forums and follow crypto news.

Practice! We recommend you use these terms to communicate with one another. This not only enhances your credibility but also ensures clear and effective communication. The correct use of crypto terms can open doors to beneficial partnerships and profitable trading opportunities.

Conclusion: Mastering Crypto Terms for Success With Bybit

Becoming fluent in crypto terms is akin to learning a new language. It takes time, effort and continuous practice. However, the rewards are worth it! Mastering these terms can significantly enhance your trading experience and speed up your decision-making processes. 

In conclusion, understanding and effectively using crypto terms is an essential skill for any aspiring or experienced cryptocurrency trader. Bybit is committed to providing the most seaworthy Crypto Ark to help you navigate the turbulent waters of the cryptocurrency market. 

Top 7 Terms ByBuddies Use to Build Bybit’s Crypto Ark

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards