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

Metaverse

Galaxy Arena is a decentralized metaverse that boasts an interactive hub for users to play, move, learn, dance, sing and participate. Find out more here.

 (M2E) concept has garnered a great deal of attention ever since it was first conceptualized, due to its unique proposition of incentivizing people to keep fit. However, many of the M2E projects thus far only involve the usage of fitness trackers to measure an individual’s steps per day. A certain amount of crypto tokens are then awarded to the individual. 

 takes it a “step” further by incorporating 

 elements into their program, giving users a more immersive VR experience as they move to earn. However, Galaxy Arena doesn’t stop there: They also highlight other X-to-Earn (X2E) concepts in their program, offering users a variety of activities while they’re in the metaverse. 

Excited to learn more about how Galaxy Arena

is spicing up the X2E space? Let’s take a look at Galaxy Arena and its unique fitness metaverse experience. 

Galaxy Arena is a decentralized metaverse that boasts an interactive hub for users to play, move, learn, dance, sing and participate. With over 100 partnerships, Galaxy Arena is growing fast. It makes use of virtual reality (VR) and state-of-the-art graphics to provide users with an immersive experience unlike any other, as they embark on various activities and earn rewards.

Providing Real-World Solutions in the Metaverse

Galaxy Arena was created to solve multiple problems commonly faced by people in the real world. Many people who would like to keep fit in the gym often experience issues such as having to wait for workout equipment, full classes, operating hours that don’t suit their schedule and sanitation challenges (before and after Covid). Some people also don’t like the idea of being watched by others as they work out. 

With the creation of Galaxy Arena, fitness junkies no longer have to wait around for equipment to become available because they can work out anytime they want in the comfort of their own home — and attend classes with no size limitations. Their actions are captured by Galaxy Arena’s groundbreaking volumetric motion-capture technology, and in return, users earn rewards in the form of ESNC tokens. Users can choose to purchase all-access pass NFTs to earn even more rewards.

There’s no need to worry about sanitation because participants are using their own workout equipment. And to make the experience more enjoyable and immersive, Galaxy Arena offers users the chance to work out with VR and AR (

Other than working out, users can also look forward to meeting other like-minded individuals and attending events without having to travel at all. 

The Galaxy Arena Entertainment Venue features 30,000 square meters of digital space, spanning seven floors. Each level is filled with unique amenities, attractions, functionalities and experiences to keep users entertained. 

The Main Floor is where users can watch pay-per-view broadcasts of real-world concerts, MMA fighting events, stand-up comedy, exhibitions, talks, fashion shows and more. These performances are captured with motion capture technology, giving you a life-like experience even when you’re watching from home. And the best part? Users will be able to enjoy a high-quality, unblocked view of the performances.

The Sub Second Floor is where corporations and high-end participants can rent private booths and watch performances in a luxurious setting. Private booths enable corporations to do their own brand advertising, while guaranteeing them privacy and a great quality of service without disruptions. Note that these booths are limited in supply and are only seasonally available, so if you’re interested in booking one, be sure to do so as early as possible.

The Third Floor is where users can find lounges, shops and boutiques available for them to hang out and shop at. You can even choose to purchase a plot of land on this floor, and open your own online store. The Third Floor is one of Galaxy Arena’s most visited places, so you’re bound to enjoy high traffic at your store. 

Instead of paying for an expensive membership to visit a regular gym in the real world, consider visiting Galaxy Gym instead — and get paid for working out! While you still have to pay for a gym membership at Galaxy Gym, the fees are much lower, and you’ll gain access to an abundance of benefits, such as being able to use the gym whenever you want in the privacy of your own home. 

Galaxy Arena’s monetary rewards system and abundance of interactive health and fitness mini games will keep you coming back for more. Some of the activities include boxing, jogging, weight training and dancing. As you exercise and complete fitness routines, your progress is tracked and you’re rewarded with ESNC (“Essence”) tokens for every milestone reached. Note that your Galaxy Arena NFT characters do lose health and stamina, and the only ways to replenish these are to work out in real life or purchase upgrades. Your equipment also has a limited time use before it deteriorates, so you need to regularly purchase upgrades to keep using it.

Other than exercising on your own, you can engage a private trainer to help you reach your fitness goals, or participate in group sessions for stretching, yoga, reflexology and more.

Galaxy Tower is a real estate development with 20,000 unique NFT units for luxury suites, lounges, office spaces and digital real estate. While there are no available units on the top floor (which is reserved for the Sky Lounge social nightclub and Celestial Casino), users can still delight themselves on the other floors. Each space is designed to be one-of-a-kind, and is equipped with exclusive decor befitting the space’s utility. 

Upon entering Galaxy Tower, users arrive at the teleportation sphere on the Ground Floor, which allows them to navigate through the various spaces within Galaxy Arena. On the First Floor is the Cosmic Zoo, where users can view a collection of otherworldly creatures and wild animals. The Galactic Planetarium gives users the chance to attend educational and entertaining shows on astronomy, view the night sky, and admire planets and other celestial objects.

Head up to the Sub Third Floor, where you can immerse yourself in the stunning underwater gardens of the aquarium and take in the views of the tranquility pools. This is the perfect place for one to unwind and just let loose. Users can also take a look at cosmic aquatic species here.

The Exterior is the core ring of Galaxy Arena, which will have the highest foot traffic in the entire Galaxy Arena metaverse. This space has billboards and banners, making it a great place for corporations’ marketing, advertising and sponsorships. Users can also get updates on upcoming events through this space.

There’s still a lot of undiscovered space and outlands within the Galaxy Arena metaverse, and the team is currently working on developing the space so that users can continue to be entertained as they explore the Galaxy Arena world. 

ESNC is the main platform token of Galaxy Arena. You can earn ESNC by engaging in all kinds of activities within the Train to Earn system, or you can purchase them through Bybit. 

As the platform’s primary utility token, ESNC is used to:

Now that we’ve gone through the foundations of Galaxy Arena, let’s take a look at its tokenomics. There’s a total supply of 1 billion ESNC tokens, with 35% set aside for rewards and the ecosystem, 15% allocated to the development of the project, 15% to the team, 15% to marketing, 10% to private sale, 5% to maintain liquidity, 2.5% to the IDO sale, 1.5% to KOL and 1% to the IEO sale. 

In case you’re worried about inflationary pressure on the value of ESNC tokens, you’ll be glad to know that the Galaxy Arena team has imposed an anti-dumping mechanism by introducing vesting periods during which tokens will be locked for a certain amount of time. This allows the team to ensure that token holders won’t be able to sell a large amount of ESNC tokens in one go and cause the value of ESNC to tank. Furthemore, the token utilities of ESNC will help to ensure that its value maintains and even increases over time.

Ready to start earning rewards from training in the comfort of your own home? Start investing today at 

, where 8.6 million ESNC tokens are ready to be earned through either committing 

Galaxy Arena vs. Other Metaverse Projects

 is one of the best-known metaverse projects that gives users the chance to explore the digital world and own digital real estate. Users can play games, interact with one another and purchase land parcels to build their own art galleries, virtual offices, games and even storefronts to sell items. These land parcels give users the opportunity to earn an additional income. While there are many things to do in Decentraland, Galaxy Arena stands out in the sheer number of activities on the platform, as well as its multiple revenue streams. 

Galaxy Arena doesn’t just give users the chance to play games, own digital real estate and socialize, it also provides a platform for users to exercise and earn at the same time, advertise, watch performances, and visit the zoo, aquarium and planetarium. These added features, along with additional features to come in the near future, sets Galaxy Arena apart from popular metaverse projects such as Decentraland.

 seems to be based on the same premise of a galactic world, Galaxy Arena proves to be a better metaverse project simply based on the number of available activities for earning rewards within the Galaxy Arena metaverse. Furthermore, it taps the idea of M2E, which incentivizes people to keep fit through interactive games. 

Galaxy Arena is one of the few projects to tap VR to fully immerse its players and seamlessly bridge the real world with the virtual one. As such, investors may be better off investing in Galaxy Arena, a project that sets itself apart, as opposed to others. 

 is a popular M2E app that rewards users with 

 and Sweatcoins for the number of steps they take each day. The first 5,000 steps give a user SWEAT tokens, while the subsequent 5,000 steps produce Sweatcoins, the in-app currency for them to purchase vouchers. 

While Galaxy Arena also has an M2E element, it utilizes VR and AR technology to include all kinds of exercises. Users aren’t limited to taking steps. Instead, they can also earn through stretching, yoga, boxing, weight training, jogging and dancing. The ability to give users a variety of workout choices gives Galaxy Arena an edge over its competitors.

Galaxy Arena is certainly an exciting metaverse project. It not only provides users the chance to explore a galactic world filled with tons of experiences, but encourages users to engage in various activities to earn rewards. The platform combines the various X2E concepts into one entire hub, truly making it a space for users to do whatever they want — be it play games, exercise, socialize, advertise, watch performances or even shop. With its stunning graphics and numerous utilities, Galaxy Arena looks to be a great project for both users and investors.

Since its aim is to become a leading state-of-the-art metaverse, you can be sure that the innovation of Galaxy Arena won’t stop here. The project

is set to incorporate even more features in the near future through its undiscovered space and outlands, so users can definitely look forward to more new experiences within its metaverse. With a healthy and solid gaming rewards economy, Galaxy Arena is positioned to prosper. Investors may wish to get in early to reap the most rewards.

The Galaxy Arena ecosystem’s ESNC tokens appear to be a great long-term addition to any crypto portfolio. As described above, Galaxy Arena stands out from other metaverse projects in that it caters to every user profile out there. Whether you’re a corporation looking to advertise your brand, a fitness junkie looking for a more conducive way to exercise, a fan of MMA fighting events, a gamer, an entrepreneur looking to set up your own online store, or even an individual looking to achieve some fitness goals, Galaxy Arena has a spot for you. The future of the project looks promising, especially since the development team is on a continuous journey to innovate more features to keep users coming back for more. We are definitely bullish on this project.

Galaxy Arena (ESNC): A Move-to-Earn Galactic Metaverse

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards