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

In this guide, we’ll look at what NFT wallets are, and we’ll take a look at the five best NFT wallets for securely storing your crypto assets.

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Whether on crypto forums, cryptocurrency guides or social media, what’s the first piece of advice all prospective crypto investors receive before purchasing their first cryptocurrency? Often, it’s to acquire a secure crypto wallet. 

This rule also applies to NFTs, or non-fungible tokens. NFTs are similar to cryptocurrencies in that they are tokenized digital assets which use the blockchain to certify their uniqueness. As with cryptocurrencies, holders of NFTs must have a digital wallet to keep their assets safe and to initiate transactions. 

An NFT wallet is a secure place to store non-fungible tokens. The wallet can take the form of either a physical device (e.g., a flash drive) or an app that’s accessed using a browser, computer or smartphone. It gives NFT holders complete control over their digital assets by providing them with a public wallet address and a private key for initiating transactions. 

The good news is that there are numerous wallet options available for NFT holders. On a foundational level, NFTs are quite similar to cryptocurrencies in that they’re both blockchain-based assets — which means that many wallet options for cryptocurrencies also support NFTs. 

Cold wallets are considered the gold standard for secure storage, and are recommended for long-term storage as well. However, they’re less convenient than hot wallets because you need to plug in your cold wallet to a computer before you can access your NFTs and make transactions. 

The market for crypto wallets is robust, so NFT holders are spoiled for choice. Since the majority of NFTs are minted on the Ethereum blockchain, most wallets designed for Ethereum tokens can also support NFTs. Many popular crypto wallets are also adding support for NFTs to cater to the expanding market. 

A wallet is a necessary component of any NFT transaction process. It provides you with an address, just like a bank account number or the PayPal email address you use for making transfers and deposits. 

For example, if you’re a buyer, you’d provide your wallet address to the seller for them to “deposit” an NFT into your wallet. If you’re a seller, then you’d initiate a “transfer” from your wallet to your buyer’s wallet address. The entire process is encrypted from start to finish and secured by the blockchain, which is why crypto transactions are considered to be among the safest and most secure in the world. 

What Are the Benefits of Having an NFT Wallet?

An NFT wallet is necessary for keeping your NFTs safe, and for managing your private keys — the passwords that grant you access to your assets. The wallet doesn’t technically store your NFT, which resides on the blockchain. Instead, it holds information regarding the location of your assets on the blockchain, and provides the private keys that prove your ownership of a particular NFT and allow you to make transactions. 

Here are some factors that make a good NFT wallet.

While hardware wallets are generally considered incredibly safe for crypto storage because they’re offline, they aren’t without risk. If you lose the physical wallet and/or your private key, you won’t be able to access your assets. There is no password reset feature or cloud backup.

 purchase hardware wallets from official suppliers. Buying a wallet secondhand or from an untrusted source is incredibly risky, as the device could be tampered with or faulty, or contain malware.

The meteoric rise of NFTs has led to the creation of a wide variety of NFT wallets. There are a lot to choose from, so to save you the trouble, we’ve tested multiple options to come up with a list of five of the best NFT wallets for 2022. 

You can use MetaMask to set up multiple wallet addresses for NFTs and cryptocurrencies that are all viewable in one place. As one of the most popular wallets, it’s very easy to connect MetaMask to DApps and crypto marketplaces. Many of these platforms have a “connect to wallet” option that often includes MetaMask. Once your wallet is connected, the platform or DApp will be able to view your public wallet addresses, making it very easy to initiate transfers. 

2. Enjin Wallet – Best for Trading/Swapping Crypto Tokens and NFTs

The wallet app is also compatible with DApps and DeFi swaps built for Android devices. Other advanced features of the Enjin Wallet include biometric security, seamless importation/tracking from different wallets, automatic gas fee calculations and multilingual support.

3. Trust Wallet – Best NFT Wallet for Staking

Like all the other entries in this section, this wallet will provide you with a 12-word recovery phrase that can be used to recover access to your wallet if you lose your password. The app offers a variety of security measures, including PIN code locking and fingerprint scanning. It features built-in charts for tracking crypto prices and a Web3 browser that can interact with DApps built on Ethereum or Binance Smart Chain. 

Trust Wallet is easy to use, with an intuitive and straightforward interface that’s beginner friendly. The wallet’s acquisition by Binance ensures that it will continue to be developed, with more features added in the future as the crypto space continues to evolve.

4. Math Wallet – Best Multi-Platform Option

Math Wallet has received backing from some big names in the industry, such as Binance Labs, Alameda Research, Fenbushi Capital, Amber Group and Multicoin Capital, to name a few. While institutional backing doesn’t automatically guarantee success, it does mean that the project’s developers can at least be trusted to continue working on the wallet and expand its functionality. 

5. Coinbase Wallet – Most Recognizable Industry Name

Coinbase Wallet has numerous perks, such as the ability to easily transfer tokens to other Coinbase customers via usernames instead of public wallet addresses. It also offers one-click encrypted cloud backup for private keys that can help ensure you never lose access to your NFTs or other tokens held in the wallet.

What Makes a Good NFT Wallet? Here's 5 of the Best Ones

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards