Jan 27, 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.

 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.

The Bank of Japan (BOJ) raised its key policy rate to 0.5% on Friday, marking the highest level since 2008 and reflecting a more optimistic outlook on inflation. This decision, anticipated by the market, follows a two-day meeting led by BOJ Governor Kazuo Ueda, who noted the need to assess wage trends and the impact of Donald Trump's return to the U.S. White House.

The BOJ's statement highlighted stable global financial markets, suggesting it has carefully monitored reactions to the new U.S. administration. Ueda emphasized that future rate adjustments would depend upon economic conditions, indicating no predetermined hike pace. Following the announcement, the yen strengthened against the dollar, and yields on 10-year Japanese government bonds rose.

Market analysts expect further rate increases, possibly by May 2025, contingent on wage pressures. This latest hike is Ueda's third in less than a year, contrasting sharply with the surprise increase in July 2024 that spurred a global market downturn.

Economists had largely predicted this move, with inflation projections now above 2% for the first time. Ueda’s comments on the neutral rate suggest that the BOJ might not align with economists’ expectations of a 1% endpoint, as he believes significant distance remains to reach neutral status.

This rate increase positions Japan uniquely among major central banks, as others, such as the Federal Reserve and ECB, are lowering rates. It allows Japan to respond more traditionally to future economic events. The decision came amid a favorable political climate, with Prime Minister Shigeru Ishiba's cabinet supporting the hike, unlike past cycles that faced strong opposition. Ueda’s confidence, however, remains cautious, due to uncertainties around U.S. economic policy.

Weekly Crypto Highlight — Trump’s Executive Orders to Support Crypto

U.S. president Donald Trump has taken a significant step in supporting the digital asset sector by signing an executive order that establishes a working group to advise the White House on cryptocurrency policy. This group includes key agencies, such as the Treasury, Justice Department, SEC and CFTC, and aims to submit recommendations for a regulatory framework within six months.

The order emphasizes the importance of the crypto industry for U.S. innovation and economic development, while encouraging regulated dollar-backed stablecoins. However, it expresses concerns about central bank digital currencies (CBDCs), citing potential risks to the financial system and privacy.

Industry leaders view this executive action as a historic win, with Matt Hougan of Bitwise Asset Management stating it establishes crypto as a national priority. During the signing, Trump highlighted the potential economic benefits of these actions and expressed a desire for America to lead in the crypto space.

This order aligns with Trump’s campaign promises, which included streamlining regulations and appointing crypto-friendly officials. He has made some strides in this area, including the pardon of Ross Ulbricht, the creator of Silk Road, and the appointment of agency heads supportive of the crypto industry.

In a related move, the SEC repealed a guideline that had restricted banks from offering custody services for digital assets, which the industry has criticized as being limiting. Following these developments, Bitcoin rose 1.5%, reflecting positive market sentiment.

Trump's evolving stance on digital assets, from skepticism to advocacy, coincides with increased political engagement from the crypto sector. His administration's actions suggest a commitment to fostering a favorable regulatory environment for digital currencies, potentially setting the stage for significant growth in the industry.

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Weekly Institutional Insights: Trump’s Executive Orders Might Further Boost Crypto

The cryptocurrency market experienced significant movement following Donald Trump’s inauguration, which traders had closely anticipated. 

The cryptocurrency market experienced significant movement following Donald Trump’s inauguration, which traders had closely anticipated. His promise to establish the United States as the "crypto capital of the planet" and create a strategic Bitcoin reserve resonated positively with market participants. Bitcoin’s market capitalization surged, reaching an all-time high of $109,300 just before the inauguration on Jan 20, 2025. This surge illustrated the optimistic crypto market sentiment surrounding Trump's administration and its potential influence on cryptocurrency regulations.

However, this rally was tempered by a common market phenomenon known as "buy the rumor, sell the news." Following the inauguration, many traders who had invested in anticipation of the event sold their holdings, leading to a price decline. This reaction highlights the volatile nature of cryptocurrency markets, as excitement can quickly turn into profit-taking.

World Liberty Financial and Ethereum Accumulation

In related news, World Liberty Financial (WLF), a cryptocurrency venture associated with Trump and his family, made headlines by significantly increasing its Ethereum (ETH) holdings. From Jan 17–19, 2025, WLF acquired 55,247 ETH, bringing its total to 56,332 ETH, valued at approximately $181.6 million at the time of the report. This acquisition drew attention due to its substantial scale and timing, occurring just days before the inauguration.

WLF's wallet also held a diverse array of assets, including Wrapped Bitcoin (WBTC) and USD Coin (USDC), indicating a strategic investment approach. The rise in attention to WLF's holdings reflects a growing interest in institutional investment in cryptocurrencies, especially in the context of a pro-crypto administration. While Ethereum's price action has been somewhat disappointing compared to that of other altcoins, the accumulation strategy by WLF suggests confidence in Ethereum's long-term potential.

The report also highlights Solana’s remarkable performance, as SOL reached an all-time high of $295 on January 18, 2025. This surge was largely driven by the launch of an official TRUMP meme coin on the Solana network, which generated significant investor interest. The TRUMP meme coin achieved a market cap of $14.92 billion within two days of launching, illustrating the power of meme culture in driving market activity.

The correlation between the TRUMP meme coin's popularity and Solana's price rise indicates how new products can influence established cryptocurrencies. Despite the initial hype surrounding the meme coin, Solana has shown resilience, bouncing back above $258 after the inauguration, suggesting a robust underlying demand.

Looking toward future developments, the report discusses the recent filings for cryptocurrency exchange-traded funds (ETFs) with the U.S. Securities and Exchange Commission (SEC). These filings include proposals for Bitcoin (BTC), Ethereum (ETH) and various meme coins, signaling a potential shift toward mainstream adoption of cryptocurrency-based financial products. The anticipated pro-crypto policies under Trump’s administration could play a crucial role in shaping the regulatory framework for these ETFs.

The SEC’s response to these applications will be a significant indicator of how institutional investment in cryptocurrencies may evolve. Should these ETFs gain approval, it could lead to increased demand and price volatility, particularly as traders react to the outcomes of these regulatory decisions.

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Bybit x Santiment: ETH Faces Pressures as SOL, XRP, Meme Shine

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.

Trump's inauguration on Jan 20, 2025 was preceded by the launch of two meme coins from the Trump family, TRUMP and MELANIA, which quickly garnered billions in market capitalization. Speculation about a strategic Bitcoin reserve being included in the executive orders signed on the first day of his administration led to a significant bullish shift in derivatives market positioning. This shift resulted in an inversion of the term structure of volatility, increased funding rates on long positions and a tilt in short-tenor volatility smiles toward calls. However, when the anticipated bullish announcements didn’t materialize, implied volatility levels decreased, even as realized volatility increased. Despite this, the bullish skew toward out-of-the-money (OTM) calls persisted.

In the perpetual markets, funding rates remained consistently high across almost all assets, continuing beyond the inauguration event. In the options market, realized volatility surged to post-election highs, even as implied volatility levels fell due to an overestimation of the significance of inauguration day for crypto. Overall, positioning across all tenors remained bullishly tilted.

Please check out the report’s highlights.

During the inauguration weekend, perpetual swap trade volumes hit their highest levels in over a month as traders positioned for expected crypto-friendly executive orders. Notably, SOLUSDT perpetuals experienced a significant surge in activity, reaching new all-time highs and a spike in realized volatility. Trump's launch of the TRUMP meme coin on Solana DEXs allowed Solana’s network to surpass competitors in fee generation, highlighting the symbolic choice of a sitting U.S. president to launch on Solana instead of Ethereum.

Perpetual swap funding rates saw minimal repricing despite the lack of significant announcements on inauguration day, remaining at neutral-to-bullish levels across all coins. Open interest data indicated no major changes in positions, even amidst spot price volatility. Consequently, while options markets adjusted short-term expectations, sentiment in the derivatives market viewed the lackluster inauguration day as just one of many opportunities for future positive news in the industry.

Speculation that the incoming president would announce a strategic Bitcoin reserve in his inaugural speech led to a buildup of short-tenor options positions just before the event. This resulted in a significant increase in call buying and the strongest inversion of at-the-money term structure since the Nov 5, 2024 election. While the extreme pricing of front-end volatility has diminished, the strong skew toward OTM calls remains, reflecting a continued preference for upside exposure as Trump prepares to sign executive orders.

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Bybit X Block Scholes Crypto Derivatives Analytics Report (Jan 22, 2025): Sentiment Cools While Remaining Bullish Following Trump’s First Day

Figuring out how much to invest in crypto can be even more important than deciding which specific coins you want to purchase. Learn more here.

If you keep up with financial news, it can often feel like you’re hearing a story about a self-made crypto millionaire every other day. However, smart investors know that the reality is a little more nuanced. The crypto market comes with high rewards, but it also has high risks. To be successful, you need to be willing to 

 and make wise choices. This guide will explore one of the most basic things you’ll need to decide on before choosing to jump into the world of crypto — how much you should invest in crypto.

Figuring out how much to invest in crypto can be even more important than deciding which specific coins you want to purchase. Not only does the amount you invest in crypto impact your other finances, but it also determines which strategies you can afford to use.

The simple answer to how much you should invest in cryptocurrency is based on your net worth. Someone with millions of dollars can easily risk a lot more than, for instance, a college student without any savings. Traditional investment advice from financial expert Douglas Feldman 

 people shouldn't invest more than 1% to 5% of their total net worth in cryptocurrency. However, some crypto enthusiasts, such as

 be wise to invest up to 10% of your income in cryptocurrency.

Factors to Consider When Deciding How Much to Invest in Crypto

There's a lot of variation in guidelines for how much to invest in crypto. To find the right amount to invest for your specific situation, you'll need to stop and consider these essential factors.

One of the most important factors in determining how much to invest in crypto is the level of risk you’re willing to consider, or your risk appetite. If you have a high risk tolerance, you can invest more. Risk tolerance is partially a matter of personal preference. Some people are naturally cautious, while others are more comfortable making risky moves. However, it’s also wise to factor in your age. A high risk tolerance can work well when you're young because gradual market growth over the years will help balance losses. However, if you're older and closer to retirement age, a lower risk tolerance is advisable.

When planning to invest in crypto, it's a good idea to consider the best-case scenario as well as the worst. Ask yourself: What will happen if my crypto assets suddenly skyrocket in price and I make thousands of dollars overnight? If you're the type of person who would throw in more money or keep holding onto your crypto until the bubble bursts, it might be smart to reduce the portion of your money that you invest in crypto. The flashy profits associated with crypto can lead to overly emotional decisions that can cause problems for certain types of crypto investors.

, the types of coins you're holding make a big difference. Not all types of crypto have the same level of risk. If you intend to go for a risky investment portfolio with nothing but 

, you probably shouldn't take all your assets and invest them in crypto. However, if you intend to invest in a broad range of reliable coins, especially 

, allocating more of your assets toward crypto is a reasonable choice.

Things change fast in the crypto world, so the same advice doesn't always work in different situations. Any time you’re going to invest in crypto, you need to take a look at crypto market conditions. In a 

, prices are consistently high, so you may want to invest less. Meanwhile, in a 

, prices are low, and you can often get big returns by putting extra into crypto investing.

Your liquidity refers to the amount of easily accessible cash you have at hand. Crypto markets are fairly liquid, since you can remove your funds at any time. However, since crypto is a volatile asset class, trying to remove your funds during a bear market can lead to considerable losses. Before putting large sums into crypto investing, think about when you'll need liquid cash. For instance, if you're going to need a large lump sum for a house deposit or another big purchase soon, you need to invest less money in crypto.

Keep in mind that a lot of the recommendations to invest between 1% to 10% of your money in crypto are based on income. However, the reality is that different people have different budgets. Some may need almost all of their income for things like food and housing, so it's not smart to take all your money and invest in crypto. However, others who have more disposable income left over after managing other budgetary needs can invest in crypto more often.

The cryptocurrency market as a whole does follow certain trends, but crypto investments always fare better if you actually understand projects before you invest. It's a poor decision to put a large portion of your assets into obscure crypto you know nothing about. Informed investors only put significant investment into specific cryptocurrencies if they take the time to 

, understand its real-world utility, explore its pricing history and see how well it performs on crypto exchanges.

What Is a Good Allocation for a Well-Balanced Crypto Portfolio?

Once you figure out how much money you want to invest in crypto altogether, you need to consider how much money to put into each specific crypto. It's important to have a diversified portfolio, so a single coin running into issues won't tank your entire crypto investment portfolio. There are a lot of different ways to invest in crypto.

The simplest investment advice, as suggested by

, is simply to put 60% of your money into Bitcoin and 40% into Ethereum. That's a decent choice if you know nothing about crypto assets but still want to invest in crypto. However, if you're willing to research individual coins and pick your favorites, try this asset spread:

If you are open to some speculative exposure, consider allocating a small percentage (2 - 3%) to emerging sectors like 

Compared to some other investments, such as bonds, cryptocurrency is considered risky. The 2020 - 2024 chart below, detailing Bitcoin and S&P's weekly returns, reveals the relatively drastic peaks and troughs of Bitcoin in comparison to S&P 500. Notably, Bitcoin recorded a weekly drop of over 40% and nearly 30% rise in 2020, thugh its volatility has declined over the years. In contrast, S&P 500's gains and losses rarely exceeded 10% throughout the entire period.

Despite Bitcoin's drop in volatility, it is still considered relatively risky to invest in crypto because of the market’s significant price fluctuations and the proliferation of 

s. Additionally, there are countless examples of people who invest in crypto, jumping onto trends and losing their money when prices on the crypto exchange drop. One

 illustrates these dangers: he became interested in crypto during the pandemic and quickly got hooked upon seeing his portfolio values rise. He invested $50,000 into crypto, and eventually built an impressive portfolio worth $300,000. Following a 

, he had only $5,000 left in his account.

Furthermore, crypto markets are still not fully understood by the public, and are less regulated than traditional investments, so it's easier for malicious actors to take advantage of naive investors. For example, crypto-lending company 

 promised to store customers' assets, but when the company went 

, many users found that the company refused to return their invested funds. A similar issue arose when 

, and investors could no longer withdraw funds from their accounts.

Despite its risk, cryptocurrency fills an excellent niche in the financial world. When you invest in crypto, it can ensure your portfolio is diversified and insulate you from stock market crashes and other issues with traditional investments. Deciding to invest in crypto is also a valid option when you want to work with some higher-risk investments. Even beginning traders can find it useful to place a small portion of their investment funds into some reliable cryptos.

Furthermore, cryptocurrency allows people with tech expertise to make highly informed decisions. Finding your niche is always a useful investment strategy. Those who don't keep up with manufacturers and foreign currency exchange rates might find that they can specialize by choosing to invest in crypto. If you enjoy learning about the latest tech news and following online memes, crypto investments can be a great way to turn your knowledge into profits.

However, even though it often works well to invest in crypto, you still need to exercise some caution before working with crypto exchanges. If you want to invest in crypto, it's essential to follow the classic rule of, "Only invest the money you can afford to lose." Those who take out loans to buy 

 or throw their entire retirement account into crypto can end up losing it all if the markets take a turn for the worse. Like any other volatile asset class, crypto needs to be approached with some common sense.

Deciding how much money to invest in crypto is an essential part of your investment strategy. By considering things like risk tolerance and liquidity, you can create an investment portfolio that addresses your unique needs. When you have the right amount of money invested in crypto, you have the potential to make impressive profits without risking all your savings.

Beginner

how much to invest in crypto, how much to invest in bitcoin

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How Much Should You Invest in Crypto? 7 Factors to Consider

Bybit Learn

DeFi

Explainers

Altcoins

Velodrome Finance, an AMM built on the Superchain network, aims to offer marketplace features from Convex and Uniswap in one convenient place. Learn more here.

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 finance fields right now is liquidity provision. There are all sorts of 

 looking for ways to sell liquidity to markets while providing profits for their own community members. Velodrome hopes to break free from the pack and beat its competitors with its uniquely user-focused experience. This liquidity provision service boasts a helpful combination of decentralization, user incentivization and user-led governance. To learn more about Velodrome's features and see how its token is performing, keep reading this guide.

 is an automated market maker (AMM) built on the 

 network that aims to offer marketplace features from Curve Convex and Uniswap in one convenient place. It’s designed to provide liquidity to many other programs while also allowing traders to swap tokens.

The Superchain network is an ecosystem that combines multiple blockchains into one seamless network. Initially launched by the 

 ecosystem, Superchain now has a variety of partners. It works with many Ethereum-based chains, including 

Velodrome Finance’s evolution has involved various stages. The project 

 (DeFi) architect who previously helped to found 

. One of the many features of this DEX was veDAO, a 

A few months after its launch, Solidly's founders parted ways over a disagreement. Initially, this left the future of veDAO up in the air. However, community members banded together and decided to save their system. veDAO took the best parts of the Solidly DEX design and moved it to Optimism. 

Velodrome's main goal is to create a sustainable and user-focused version of other popular liquidity providers, such as Uniswap and Convex for Curve. Unlike many other automated market makers, Velodrome is entirely run by its users. As a DAO, Velodrome encourages users to submit proposals and vote on proposals. By giving users the ability to regulate everything from fees to branding, Velodrome ensures that each participant's opinions are heard.

Velodrome's governance model is also meant to incentivize users to commit to long-term community growth. Unlike some systems that are all about short-term individual profit, Velodrome has incentives that specifically reward those involved in community growth. It believes this design ensures the system has regular users who make decisions that enhance its overall sustainability.

 starts with liquidity providers temporarily placing their tokens in concentrated liquidity pools. Traders then use funds from the liquidity hub to facilitate trading with minimal 

, paying low fees for the privilege. These fees are then transmitted to liquidity providers in the form of VELO emissions. Liquidity providers can choose to lock their VELO tokens, if they wish to join the Velodrome governance model and vote on protocol upgrades. This flywheel cycle has a seven-day timeline. Every week, Velodrome updates its system to recalculate votes, trading fees and VELO emissions. 

Another unique mechanic of Velodrome Finance is its blockchain base. Instead of being built on a single chain, Velodrome is designed to run on the Optimism Superchain network. When operating the liquidity management system, Velodrome doesn't focus on individual liquidity pools based on a token's home chain. Instead, its protocol router evaluates multiple types of liquidity pools to automatically select the one with the most efficient prices and optimal trade execution routes.

Velodrome is a fairly focused AMM. Instead of providing a wide range of services, it prioritizes doing an excellent job at just a few things. 

Velodrome's swapping service lets traders exchange one type of coin for another. It currently supports a broad range of coins, both on and off the Optimism Superchain network. This form of trading has many uses, ranging from portfolio management to profiting from market changes. Velodrome's convenient three-step system simply requires users to link their wallets, choose their desired tokens and approve their fee quotes before swapping.

Velodrome offers concentrated liquidity pools that help DEXs function properly. In exchange for these services, liquidity providers on Velodrome earn financial rewards. For many investors, participating in a liquidity hub is a way to 

 on tokens they don't yet want to sell. Velodrome's ability to provide deep liquidity is so popular that it's the primary liquidity hub on the Superchain.

Velodrome has changed a lot since its early days as a token-swapping system, gradually adding features like decentralization, dynamic fees and a 

 (DApp) interface. Its long-term future will depend upon the changes its DAO votes on. However, there are already 

 currently in the works. In 2025, Velodrome plans to add more dynamic pricing options, additional governance methods, Superchain-based voting and bridgeless Superchain swaps.

The Velodrome ecosystem relies on the following two tokens to function properly.

 – based token that’s used for fees and liquidity provision. You can obtain VELO either by purchasing it directly through the market, or by contributing to liquidity pools and receiving VELO liquidity incentives.

If desired, users can lock their VELO tokens in order to receive veVELO, an ERC-721 governance token that exists as an NFT. The amount of veVELO you receive for your VELO is in part directly proportional to the amount of time you choose to lock your tokens. People who hold veVELO can submit and vote on community proposals for the Velodrome platform.

The VELO utility token has a circulating supply of roughly 900 million, with plans to unlock more tokens in the future. These 

The VELO token was initially selling for around $0.04. However, after the project’s DAO adapted its platform from Solidly to Velodrome, token prices took off. In April 2023, March 2024 and December 2024, VELO token prices spiked. While the VELO token price is down from its all-time high of $0.42, it’s still sitting in the $0.10–$0.20 range. 

This pricing pattern seems likely to persist for a while. Binance 

 will reach an average price of around $0.17 in 2025. However, other price predictors are even more optimistic, with CoinCodex suggesting there will be a price jump in February 2025, resulting in yearly average prices of around 

Looking to trade Velodrome tokens? Bybit now offers the VELODROMEUSDT Perpetual contract. To get started, you’ll first need to create a Bybit account, then fund it with cryptocurrency and navigate to the 

Velodrome has plenty of competitors in the liquidity management field, but several factors make its token a good investment. First of all, the VELO utility token has been around for quite a while. This stability makes it more reliable than tokens that were just recently added to the market. Secondly, VELO has a history of sharp price increases; the token is highly responsive to positive press and market upturns, so there's a chance for high prices. Finally, Velodrome is performing well, and Its partnership with the Optimism ecosystem has helped it attract users.

Nevertheless, any crypto token features some volatility in its price. For example, a DAO voting for abnormally low fees could cause sudden price downturns. If you want to invest in the VELO token, make sure to 

. As with any other medium-risk token, VELO isn't reliable enough to be the only asset in your entire investment portfolio.

Velodrome has done a great job of transitioning from a DeFi tool to its own standalone liquidity provision system. By functioning as the primary liquidity hub on Superchain, Velodrome provides minimal slippage, deep liquidity and reasonable trading fees. Furthermore, its liquidity incentives appeal to a wide variety of users and help keep the system running. Ultimately, the Velodrome platform and the VELO token have a lot to offer to the world of decentralized finance.

Velodrome Finance (VELO): A Liquidity Hub for the Superchain

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