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

Crypto

Ever wondered how you can make or receive a crypto donation? This guide's for you! Find out how you can benefit from the process.

As the adage goes, “no man is an island.” Giving back to society is arguably a fundamental responsibility of all its members. Typically, individuals and companies make their contributions in the form of monetary donations, given directly to 

 and other organizations that promise to help those in need.

 conducted in the name of charity, there’s been a 

 since 2020. Amid the setbacks and difficulties brought on by the COVID-19 global pandemic, many are still keen to help the less fortunate, and a new type of donation has been catching on with the public.

In recent times, the concept of cryptocurrency donations has gained popularity as a safer and more transparent way of doing good. Crypto donations have garnered a great deal of interest from both novices and experts in the crypto world, but many people are still unsure how the process works. This guide covers everything you need to know about crypto donations.

Cryptocurrency is a digital currency generated by code and operated by a regulatory body, one that is often 

. Various crypto coins are available today, the most popular being 

Donating crypto involves the transfer of funds from exchanges or 

If a taxpayer sells crypto and then donates the after-tax cash, the capital gains will incur short- or long-term capital gains taxes, based on how long the donor held the crypto before selling. If they’ve held the asset for a minimum of one year, 0%, 15%, or 20% 

 rates would apply, per the amount of taxable income. Short-term capital gains are considered ordinary income, and are taxed with rates ranging from 10% to 37%.

Charitable giving via crypto has become increasingly popular for individuals and organizations. Some of the most prominent philanthropic organizations globally — including the 

However, most charities cannot accept crypto donations directly due to the technicalities involved with setting up a digital wallet. Instead, they accept crypto donations through a third-party processor or a donor-advised fund.

 enable crypto donations to charities by converting the donated cryptocurrency to cash on their behalf. These processors usually charge a small transaction fee (usually 1%) for their services.

Donor-advised funds, which are also 501(c)(3) public charities, serve as a tax-efficient solution for accepting crypto contributions. They are able to facilitate crypto donations as they have the resources and expertise for evaluating, receiving, processing and liquidating non-cash assets.

For instance, the Center for Excellence in Education (

), a 501(c)(3) charitable organization sponsoring science and math events for high school students and teachers, recently started accepting Bitcoin donations and other crypto contributions through Crypto for Charity.

 has also been trying to reduce poverty by accepting direct, community-based crypto donations. In 2019, 

 became the first UN Organization to hold crypto and make crypto transactions via a designated 

The ability to donate cryptocurrency quickly and anonymously from any country without incurring high fees is a unique technological innovation that makes crypto donations easier, more efficient, and more equitable.

What Kind of Cryptocurrency Can I Donate?

While Bitcoin is the most commonly donated crypto asset, various organizations are willing to accept donations in Ether, 

Some organizations looking to circumvent the 

 of crypto are also open to receiving donations in USDC (fully backed and 

 (DAF) exempts nonprofits from taking custody of the received crypto, thus greatly simplifying the underlying legal, accounting and administrative implications. Intermediaries handle the conversion process and tax receipts, after which they release the donation to the organization in cash.

Since regulations around cryptocurrencies are constantly changing, an intermediary is most suitable for nonprofits that don't want to get involved in playing keep-up, but still want to offer contributors the option of donating cryptocurrency.

2. Through Specialized Nonprofit Crypto Processors

 have been helping nonprofits accept crypto donations to their own wallets. These companies handle the transactional aspects of the process for a service fee, including automatic conversion to cash and management of tax receipts. They may also assist with creating marketing campaigns for the crypto community.

Since the nonprofit will be taking custody of the crypto, they’ll need assistance with accounting best practices and compliance handling of IRS regulations. If the nonprofit decides to hold the crypto as an investment, they must also consider the assets' volatility, and set policies regarding liquidation.

This approach is ideal for nonprofits that want to make crypto a central aspect of their assets and are looking for a built-out donation widget with automated receipts.

 offer embeddable checkout options with automatic crypto-to-cash conversion for minimal fees. However, these are generalized consumer experiences that aren’t created with donations in mind. Therefore, nonprofits will have to handle donor support, and the collection of donor information and tax receipts.

This approach is ideal for nonprofits looking for an embeddable widget with minimal fees, and who don't mind managing the administrative and operational aspects themselves.

 allows users to send, receive and store crypto coins. There are many types of wallets to choose from, e.g., hardware vs. software, custodial vs. 

The most crucial consideration in this approach is secure storage for accessing the wallet's credentials. Since there’s no real donor information associated with the transactions, clear records of transactions will also have to be maintained.

5 Organizations Which Accept Crypto Donations

With a presence in almost every country, the international 

 network is the largest humanitarian network in the world. 

's activities have a single central purpose: Providing non-discriminatory help to those suffering during conflicts, natural or man-made disasters, or conditions of chronic poverty. 

 (Editor’s Note: BitPay may charge a conversion fee on donations).

 (HRF) is a nonpartisan, nonprofit organization that protects and promotes human rights globally, especially in closed societies. HRF's mission is to ensure that freedom is preserved and promoted around the world; it brings people together to defend human rights and promote liberal democracy.

 helps secure land rights for Indigenous peoples. The 

 strengthens Indigenous land security and teaches communities about the use of technology to protect their forests. Through direct investments, it connects people who are deeply focused on conserving their ancestral lands with the tools, training and resources for protecting their rainforests. 

, a 501(c)(3) nonprofit organization, unlocks human potential by supporting reliable water projects for communities in sub-Saharan Africa. The project aims to help those who suffer needlessly due to a lack of clean water and proper sanitation. 

 Bitcoin, Bitcoin Cash, Ether, Litecoin and 

 (EFF) was founded in 1990 to champion free expression, user privacy, and innovation through policy analysis, grassroots activism, impact litigation and technological development. With the prevalence of technological scams in today’s society, EFF works to ensure that users' rights and freedoms are improved and protected. 

Crypto donations are easy to make. Simply choose the organization you wish to support, find out which type(s) of cryptocurrency they accept, and then donate your crypto funds easily and securely. 

A word of caution, however — always do your research before making a donation to any organization. No matter how secure cryptocurrency transactions may seem, danger always lurks in the corner (or, in this case, the recesses of the internet), with scammers capitalizing on every opportunity. Once you’ve ascertained that the organization you’ve selected is trustworthy, a crypto donation is a fantastic way to make a difference in people’s lives.

Crypto Donations: An Innovative Way to Give

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards