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

Moonbirds is a collection of 10,000 unique owl avatars with rare traits such as mohawks, eye patches and fiery eyes.

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The NFT space has become quite crowded. More often than not, you’ll be sidelined by copycat collections looking for a quick buck. But amid the hype around NFTs, especially profile picture (PFP) collections, you’ll come across a gem like Moonbirds — fresh from the mint, with out-of-this-world artwork and heavy backers on its tracks.

Following a hot launch in April 2022 that generated millions of dollars in sales volumes, it was clear that Moonbirds hadn’t come to play. With similar attributes to legendary NFT collections 

, Moonbirds has caused quite a storm in the NFT space.

So, what is it about these Ethereum-based Owls that has the NFT world hooked? Let’s dive into the Moonbirds project and discover why it’s stirred up the NFT community.

 The project can be categorized as part of the PFP boom that’s hit the crypto industry. PFPs are profile pictures displayed on social media sites by celebrities or other NFT enthusiasts.

Each Moonbird gives the user access to an exclusive private membership club, called PROOF Collective, where one can accrue additional benefits. As with every other NFT, although Moonbirds share similar elements, no two Moonbirds are exactly alike.

While the inaugural Moonbirds NFT collection was capped at 10,000 Owls, only 7,875 of the Moonbirds were available to the public. The NFT community felt concerned about the limited Moonbirds drop, citing accessibility issues. Indeed, the much-hyped collection sold out within 48 hours of the NFT drop.

Birds in nature often nest their young ones by incubating them, allowing them to grow and develop. Similarly, the Moonbirds “nesting” mechanism is a form of staking that involves locking up one’s Moonbird in a wallet, where the NFT accrues benefits. 

is popular in the crypto community as a way for token holders to lock their assets for a period to earn rewards. 

 rewards come in the form of the platform’s native utility tokens, the reward for staking Moonbirds is more status-driven. Total nested time accumulates perks for Moonbirds NFT holders, including access to higher tiers in the PROOF Collective and upgraded nests that attract enhanced drops and rewards. Nesting keeps the Moonbird safe from security breaches and 

, since the fledgling never leaves your wallet.

Moonbirds’ key founders are Kevin Rose, Justin Mezzell and Ryan Carson. This solid team behind Moonbirds also brought the PROOF Collective to the NFT world. Before becoming an NFT mogul, celebrated American web entrepreneur Kevin Rose was already an established investor and successful podcaster.

Justin Mezzell, another co-founder and Moonbirds Chief Product Officer (CPO), is the face behind the superb artwork on the Owls. Mezzell and his team put together the randomized visual components on each Moonbird, resulting in an iconic collection of generative NFTs.

Ryan Carson, Moonbirds ex-Chief Operating Officer (COO), was also an instrumental part of the project team. While 

 to create his own NFT fund stirred feathers in the NFT community, it only added to the hype around the project.

The PROOF Collective is a private membership club made up of 1,000 passionate NFT collectors and artists. PROOF's community includes early NFT collectors and key players in the NFT industry. Launched in December 2021, PROOF quickly became a force to reckon with in the NFT industry. Holding a PROOF Collective NFT provides access to this exclusive club.

As with other top-flight NFT clubs, being a PROOF Collective member is the golden key to the NFT space. With it, one gains access to PROOF’s invite-only Discord where members get first-hand information on everything NFT. PROOF Collective members can attend in-person events, get exclusive spots to promising NFT projects, listen to the PROOF podcast, participate in free NFT drops, and receive many other benefits.

, with some going for over 200 ETH. At the time of this writing, 

 places its NFT stash at 153,940 unique NFTs. These include 817 Bored Apes, 148 CryptoPunks, and 499 NFTs from 

. At the moment, the exclusive NFT club has yet to announce any plans to increase its membership of 1,000, despite the explosive demand by NFT holders for a spot in the exclusive collectors club.

Why Are Moonbirds So Popular and Expensive?

The buzz around Moonbirds has been mind-boggling. Moonbirds flew right out of the mint, and made some of the more prominent PFP NFTs look like child’s play. Its shake-up of the NFT space is phenomenal, its prominence has caused a serious ripple effect.

Upon its launch, the 7,875 of the 10,000 NFTs up for grabs (through a raffle) were cleared off the shelf within two days. Moonbirds raked in 19,687 ETH, which was valued at around $60 million at that time. The Moonbirds collection has continued to generate millions for holders in the NFT secondary market.

Moonbirds’ affiliation with the PROOF Collective made it an instant hit. When the PROOF Collective NFTs hit the market, they went for 1 ETH each. Despite a slow 2021, the PROOF Collective passes started slowly rising to double digits — and hit over 100 ETH before the Moonbirds launch. A combination of FOMO (

) and NFT notoriety associated with Moonbirds have blown the project’s value through the roof.

. The price is usually quoted in ETH, and you need a 

 wallet to facilitate trades. From the prices quoted on these NFT markets, it’s clear that owning one of these pixelated owls doesn’t come cheap.

And yet, if you can get a Moonbird, it could prove lucrative in the end, as with the immense success of Bored Apes and CryptoPunks. With so many Moonbirds nesting, and a well-funded project development team, it seems like the journey has just begun for these coveted digital owls.

Despite its roaring success, Moonbirds has faced some rocky times, raising concerns around NFT circles. The controversial exit of one of its co-founders, Ryan Carson, in April 2022 caused an uproar in the NFT community. Some termed his departure to set up his own NFT fund as premeditated and detrimental to the project.

However, the other co-founder, Kevin Rose, was quick to 

 and assure Moonbirds owners that everything was under control, and that the project was on track.

That said, Moonbirds has continued to bring in heavyweights in the industry to help map out its future. The Moonbirds team is seriously focused on building and empowering its community, and the project’s momentum hasn’t flagged.

, its future success is highly pinned to the exclusivity of the PROOF NFT private community. For now, many still believe in the project’s vision for the NFT ecosystem, which has been greatly fueled by the continued interest in utility-enabled PFPs.

Moonbirds: NFT Owls Flying High

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards