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

Bybit Guide

Bybit Crypto Loans is a financial platform that facilitates loans, enabling users to meet short-term liquidity demands without having to sell their crypto.

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In the evolving world of cryptocurrency, financial flexibility is paramount — and crypto loans have emerged as a versatile financial tool that enables investors to unlock liquidity from their digital assets without having to sell them. Essentially, crypto loans allow users to borrow funds by collateralizing their cryptocurrency holdings, providing a means to access fiat money or other cryptocurrencies while maintaining a position in their initial investment. 

Bybit Crypto Loans seeks to provide users with additional liquidity while they navigate the crypto markets. This article delves into the platform’s workings, benefits and risks, and offers a step-by-step guide to utilizing it. Read on to equip yourself with the knowledge to make informed decisions in your crypto journey.

 is a platform that facilitates loans, enabling users to meet short-term liquidity demands by using their assets in specific Bybit accounts as collateral while also borrowing against various available assets.

Bybit Crypto Loans offers a straightforward and user-friendly approach to borrowing. If you’re wondering about the prerequisites, the process is quite inclusive. As long as you're a registered Bybit user with assets in your Spot Account (or Funding Account, if you’ve upgraded to the 

), you're eligible. These assets act as your collateral, enabling you to borrow coins on Bybit.

However, it's essential to note that repayment must be made in the same coin as the borrowed currency. For instance, if you've taken a loan in 

The platform provides flexibility in terms of loan duration. Users can choose from loan periods of 7, 14, 30, 90 or 180 days. The beauty of this system is the freedom it offers, as borrowers can return their borrowed coins at any point within their chosen loan term. 

Utilizing Bybit Crypto Loans provides several advantages.

Bybit Crypto Loans offers a comprehensive range of assets for both collateral and borrowing, such as USDT, 

 and more. This diversity ensures that users have ample choice in selecting the assets that best fit their financial strategies and risk profiles.

One of the standout features of Bybit Crypto Loans is its competitive interest rates. They’re designed to be favorable to the borrower, making the service both affordable and attractive compared to many traditional crypto lending platforms.

Flexibility is key when it comes to financial management. Bybit understands this and allows borrowers to return their borrowed coins anytime before the stipulated due date, with no penalties. This provision offers users the convenience to manage their loans according to their particular financial situations.

There are no restrictions on the use of assets borrowed using Bybit Crypto Loans. Borrowers can seamlessly use these assets across various Bybit platforms, be it for 

 products. This versatility ensures that users can maximize their financial strategies without being confined to specific trading modules.

Financial liquidity is crucial, especially in the dynamic world of crypto trading. Bybit Crypto Loans facilitates liquidity by allowing users to withdraw their borrowed assets as and when they need. This feature ensures that users are never strapped for cash and can make timely investment decisions.

While Bybit Crypto Loans offers numerous benefits, it also comes with risks.

If a loan-to-value (LTV) ratio surpasses the designated liquidation LTV ratio, Bybit has the authority to liquidate the collateral assets. This action ensures that both the loan and the accrued interest are settled in full.

Timely repayment is crucial. If borrowers delay their repayments, they face a significant surge in interest charges. Specifically, during the overdue period, the interest rate triples from the standard hourly rate.

Prolonged delays in loan repayment can have severe repercussions. If a borrower doesn't settle a loan within the stipulated overdue time frame (see table below), Bybit will proceed to liquidate the collateral assets. Additionally, a liquidation fee amounting to 2% of the loan value will be applied.

Now that you understand the basics of Bybit Crypto Loans, here’s a step-by-step guide to how you can borrow and repay your loans. Please note that you first need to 

 and have crypto assets in your Spot Account (or Funding Account, if you’ve upgraded to the Unified Trading Account) before you can use Bybit Crypto Loans. If you haven’t yet done so, please view our guides to 

: Log in to your Bybit account. Then, hover your cursor over the 

tab on the navigation bar at the top of the homepage and click on 

: Follow the steps below to borrow assets:

a) Select the coin you wish to borrow and enter the amount you would like to borrow.

b) Select the currency of your collateral and enter the amount to be collateralized.

that have automatically been tabulated on the right side of the page. 

e) Once you’ve checked the information, tick the box next to 

I agree to the Crypto Loans Service Agreement

 (after reading it carefully) and click on 

. Please note that interest starts to accrue as soon as the order is confirmed.

: Ensure that all information is correct before clicking on 

How to Repay Loans Using Bybit Crypto Loans

: Enter your repayment amount, or just click on 

to enter the maximum repayment amount. Once you’ve ensured all information is correct, click on 

You have successfully repaid your loan and interest.

Navigating the world of crypto loans can be daunting, but with the right knowledge and understanding of the associated risks, Bybit Crypto Loans stands out as a commendable choice. When you're well-informed about potential pitfalls, the platform offers notable benefits such as diverse asset options, competitive interest rates, flexibility in repayment and usage, and the freedom to withdraw borrowed assets. In essence, Bybit Crypto Loans can be a valuable tool for those looking to enhance their crypto trading and investment experience, provided they approach it with caution and awareness.

Bybit Crypto Loans offers a flexible financial solution for obtaining liquidity without selling your assets. It provides various benefits but also carries notable risks. Users should meticulously evaluate their financial capacity and risk tolerance when utilizing this service, ensuring that the strategy aligns with their investment goals and understanding of the platform’s mechanics. 

 to start borrowing with Bybit Crypto Loans!

Bybit Crypto Loans: Your Gateway to Seamless Crypto Borrowing

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards