Feb 24, 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.

Weekly Highlight — Mixed Economic Data Leads to Risk-Off Strategies

For the past two months, the strong U.S. economy has given investors confidence to invest in markets, even amidst looming tariffs and a stricter Federal Reserve Board. However, recent data indicates that this support may be weakening.

Last Friday, several reports on consumer sentiment, housing and services contributed to the S&P 500's largest loss of the year as it fell 1.7%, wiping out its weekly gains. In contrast, bonds experienced a rally, driving the yield on 10-year Treasuries down to 4.43%. The VIX {

the Chicago Board Options Exchange's (CBOE) Volatility Index

, known as the "fear gauge"] spiked, but remained below 20, signaling increased market anxiety.

Previously, optimism among investors was fueled by speculation regarding U.S. president Trump’s policies promoting disinflationary growth. However, mixed economic signals are now causing concern, particularly a report showing a decline in consumer sentiment alongside rising long-term inflation expectations — the largest drop since 1995. Additionally, existing U.S. home sales fell for the first time since September 2024, further complicating the outlook.

While January's job growth appeared solid, with 143,000 jobs added and the unemployment rate stable, institutional investors began the year with a pro-risk stance, optimistic about the U.S. economy’s trajectory. Yet, the recent volatility in economic data has prompted a reevaluation of strategies.

Weekly Crypto Highlight — SEC May Drop Lawsuit Against Coinbase

Coinbase announced that the U. S. Securities and Exchange Commission (SEC) has agreed to drop its lawsuit accusing Coinbase of operating an illegal exchange, pending Commissioners’ approval. Following this news, Coinbase shares initially surged in premarket trading, but fell by 4% to $246.30 as of midday in New York. Bitcoin also declined by about 1%, trading at around $97,000.

This decision signals a shift from the aggressive regulatory stance of former SEC Chair Gary Gensler, who faced criticism from the crypto industry for enforcing regulations through lawsuits. Last week, the SEC likewise requested a pause on a similar case against Binance, highlighting ongoing developments regarding a regulatory framework for digital assets.

The SEC's complaint will be unfairly dismissed, meaning it cannot be refiled. Coinbase CEO Brian Armstrong stated that this dismissal will entail no fines or changes in the company’s operations.

Coinbase has actively engaged in Washington, D.C., donating millions to support pro-crypto candidates and recently adding Chris LaCivita, a former Trump campaign manager, to its advisory council. Armstrong has also communicated with Trump directly.

The SEC initially sued Coinbase in June 2023 amidst a broader crackdown on the digital asset industry following the 

. Gensler had claimed that many tokens fell under SEC jurisdiction. 

The dismissal alleviates a significant burden on Coinbase, allowing it to list more tokens and refocus on product development, rather than legal defenses. This outcome removes a key litigation risk, enhancing Coinbase's capacity to innovate. The company recently reported strong fourth-quarter earnings, and now aims to collaborate with Congress and regulators in order to establish clearer rules for the crypto landscape.

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Weekly Institutional Insights: Mixed Economic Data Rattles Market; SEC May Dismiss Lawsuit

As of mid-February 2025, the cryptocurrency market is experiencing movements driven by economic pressures and regulatory movements. 

As of mid-February 2025, the cryptocurrency market is experiencing movements driven by economic pressures and regulatory movements. Recent inflation data has rattled financial markets, leading to a sharp reassessment of expectations for Federal Reserve policy. A higher-than-expected Consumer Price Index (CPI) report has caused Bitcoin to dip below $94.2K before rebounding to approximately $98.1K. This fluctuation illustrates how macroeconomic factors are increasingly influencing digital assets, mirroring trends seen since early 2022 when the Fed began raising interest rates.

Santiment data reveals that discussions around the terms “CPI” and “inflation” surged to 1.75% of all crypto conversations, the highest level since 2022. This heightened sensitivity indicates that when markets are stagnant or declining, economic news is met with increased concern and fear, often leading to sell-offs. Despite the increased uncertainty, Bitcoin has demonstrated resilience, staying above the $98K mark. Nevertheless, continued inflation could lead to further volatility in risk assets such equities and crypto.

The LIBRA scandal has further complicated the crypto landscape. Argentine President Javier Milei's endorsement of the cryptocurrency led to a dramatic rise — and an even more significant fall in value, as it plummeted by 80% within days. Allegations of fraud surrounding Milei have intensified scrutiny of speculative assets, particularly meme coins, leading to a crisis of confidence among investors.

The fallout from this scandal reflects a broader trend of growing impatience with high-risk assets. Retail sentiment has turned bearish, as evidenced by increased mentions of selling across social media platforms. This shift highlights the need for thorough research before investing in speculative projects. The LIBRA incident serves as a stark reminder of the risks associated with relying solely on endorsements for investment decisions, prompting many traders to seek more stable and established cryptocurrencies.

Emerging Opportunities and Investor Behavior

Litecoin is gaining traction, driven by the possibility of a spot ETF approval that could pave the way for broader access to altcoins, further maturing the crypto market. As discussions around the term “Litecoin ETF” spike, market analysts are optimistic about the likelihood of approval, which could enhance investor interest in Litecoin and similar assets.

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Bybit x Santiment: LIBRA Scandal Gives Rise to Meme Coin Crisis; Litecoin ETF Anticipations Build Up

KAITO is the core currency of Kaito AI’s InfoFi ecosystem, enabling transactions, governance, staking, and community engagement.

The S&P 500 fell 0.43% amid Walmart’s weak outlook, with investors eyeing PMI and home sales data next. Gold rose 0.23% to $2,939 on safe-haven demand but retreated from a $2,954 high. Traders await S&P Global Flash PMIs. Coindesk Indices, an index measuring broader cryptocurrency market performance was up by 0.02%, with Bitcoin and Ether rising by 2.46% and 0.69%, respectively in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today’s top performer is BERA, which surged nearly 15.8% after The Graph integrated Berachain Mainnet on day one, enabling seamless onchain data access.

Berachain (BERA), founded in 2021, is a Layer 1 blockchain with Proof-of-Liquidity consensus, ensuring security and liquidity while maintaining full Ethereum compatibility. The Graph has 

 support for the newly launched Berachain mainnet from day one. Developers can now query Berachain data using Subgraph Studio, making it easier to organize and access onchain data. This integration enables the creation of fast and efficient frontends for Berachain-powered dapps.

Check Out the Latest Prices, Charts, and Data of 

 is the core currency of Kaito AI’s InfoFi ecosystem, enabling transactions, governance, staking, and community engagement. The total supply is allocated as follows: 56.67% to community and ecosystem initiatives (including ecosystem growth, creator incentives, and liquidity rewards), 25% to core contributors, 10% to the foundation, and 8.3% to early backers. Distribution is merit-based, using AI-driven assessments of engagement, governance participation, and long-term alignment with Kaito’s vision. Staking provides rewards and voting rights, ensuring active participation. A claim process for KAITO will be announced soon.

Yesterday, BTC Spot ETFs recorded a net outflow of $252.8M, including $33.5M from GBTC and $219.3M from non-GBTC funds.

. With $43 million in funding, this presents a valuable opportunity. To maximize your points, complete the "Generate at least one transaction on Sahara Testnet" task by sending a small amount of SAHARA via Metamask. This earns 20 points, a significant amount compared to other tasks. Ensure you take full advantage of this opportunity.

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KAITO Powers the InfoFi Ecosystem with Governance Staking and Community Rewards

Kaito is an AI-powered information indexer specifically designed to deliver actionable insights for cryptocurrency traders and investors. Find out more now!

Within a year of its launch, Kaito has already established itself as a key player in the web3 industry. Its innovative approach combines artificial intelligence with publicly available crypto conversation data, creating a tool that can present an up-to-date picture of the events affecting the cryptocurrency space at any given time.

 is an AI-powered search engine specifically designed for the cryptocurrency space. It’s a premium service with a monthly subscription of $1,099. The platform indexes thousands of 

 sources that aren’t accessible through traditional search engines, and gathers data from Twitter, Discord, governance forums, research papers, news articles, podcasts and even conference transcripts. 

Kaito uses advanced AI algorithms and natural language processing to better understand context and gauge sentiment about topics. Its use of AI and an internal algorithm allows Kaito to filter out the noise, presenting a more accurate picture of community sentiment. 

. Before moving to web3, Hu worked in the traditional finance space for over eight years, including the management of a $500 million equities portfolio at Citadel. His aim with Kaito is to democratize web3 information by giving users access to tools and insights they need to navigate this ever-changing industry. 

Kaito has quickly attracted significant investment from major 

 in the industry. The project has already raised $10.8 million across two funding rounds.

The seed round in August 2023 was led by Dragonfly Capital, with participation from Sequoia Capital China, Jane Street and others, as Kaito secured $5.3 million. This was followed by a Series A round in June 2023, led by Superscrypt and Spartan, raising an additional $5.5 million with a valuation of $87.5 million. Other notable investors include Mirana Ventures, Folius Ventures and Alpha Lab Capital. 

Kaito offers a range of features designed to provide users with comprehensive and actionable insights. They include the following:

: Kaito’s platform uses a custom-built large language model (LLM) in combination with real-time data gathered from various sources to provide users with actionable insights on developments in the web3 space. 

:As a web3-native company, Kaito can analyze and understand the nuances of 

 and concepts. This gives it an edge when compared to Web 2.0 search engines that struggle to understand this space. 

: Kaito tracks market sentiment at various levels, including general market sentiment, sector-specific sentiment and sentiment toward specific tokens and projects, providing investors and traders with an important metric in assessing a project’s value.

Kaito uses a custom LLM to enhance its data processing capabilities. The platform aggregates data continuously from various sources, including social media, forums and news websites. This data is then processed using Kaito’s natural language processing capability to identify relevant information, extract key insights and analyze market sentiment. 

In addition, its platform uses a reputation system to give weightage to different posts based on the reputation of each poster. It also employs sophisticated algorithms to filter out spam and bots that often try to shape public opinion on social media platforms, especially on X. 

In December 2024, Kaito AI introduced two new elements to its ecosystem: 

 collection. Yaps is a scoring system that measures user contribution and engagement within the web3 community. Users earn 

 by creating valuable content, engaging with others in the crypto space and participating in discussions on 

. Kaito uses four main attributes in allotting these points:

The system also automatically filters out spam posts, making sure only real posters and useful posts can earn Yap points. While Kaito hasn’t officially confirmed a token airdrop associated with Yaps, the program allows participants to accumulate points that might play a role in future rewards, or initiatives within the Kaito AI ecosystem.

Participation in the Yaps program is completely free. Users just need to log in with their Crypto Twitter accounts and Kaito will start tracking their Yaps scores automatically. 

Genesis NFTis a limited-edition collection of 1,500 

 launched by Kaito AI. Priced at 0.1 ETH each, these NFTs have been minted in three phases:

As of Dec 26, 2024, NFTs in the collection are tradable on OpenSea, with a floor price of approximately 3.69 ETH. 

Kaito is a new and innovative service in the web3 space. Its use of AI to cut through the noise and fragmentation presents a great opportunity for the entire ecosystem. Kaito’s 

 suggests that it’s likely to roll out new features and/or services in the future. While the high subscription fee may be an obstacle for large-scale adoption, Kaito is still likely to become an important tool in the hands of institutions and 

 Perpetual Contract with up to 75x leverage now!

Intermediate

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Kaito: AI-Powered Web3 Information Platform

Bybit Learn

Crypto Insights

blockscholes

Our weekly crypto derivatives analytics report delves into macro events, the current state of crypto and trading signals from spot trading volume, as well as futures, options and perpetual contracts.

Bybit X Block Scholes Crypto Derivatives Analytics Report (Feb 19, 2025)

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With fewer macroeconomic releases in early 2025, the crypto market has experienced lower volatility and stagnant spot prices. This has led to decreased implied volatility in derivatives, a steepening term structure and stable open interest. 

However, ETH options still anticipate continued price volatility. Historically, such sideways movements have seen altcoins underperform, reflected in disappointing funding rates in the derivatives market.

Please check out the report’s highlights.

Without clear narratives or volatile spot price movements, open interest in perpetual swap contracts has remained flat over the past two weeks, with trade volumes also subdued in this low-volatility environment. Notably, SOL's perpetual positioning hasn’t significantly changed, even with its spot price 35% below its all-time high from late January.

On February 17, ETH’s spot price surged 6%, contrasting with the sideways movement of other crypto assets, but those gains were nearly reversed within 24 hours. This led to higher realized volatility in derivatives, and a flatter term structure as compared to BTC. Traders continue to assign a premium to short-dated ETH options, whose volatility has been higher than that of BTC for some time. Additionally, ETH option trade volumes have spiked, with calls reaching $0.25 billion on Feb 15, 2025.

Since reaching its all-time high in late January 2025, Solana's spot price has declined, leading to muted options markets with low activity in both calls and puts. Open interest is balanced between upside and downside, and is primarily focused on longer-dated positions, reflecting a lack of interest in short-term trades amidst disappointing spot market activity.

Bybit X Block Scholes Crypto Derivatives Analytics Report (Feb 19, 2025): Crypto Remains Silent as ETH Sees Volatility

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