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

Blockchain

Altcoins

NKN is an open-source blockchain protocol designed to provide a peer-to-peer (P2P) connectivity platform to incentivize users to solve the problems of the Internet 2.0.

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Undoubtedly, the internet has revolutionized almost every aspect of our lives over the past few decades. However, with time, it has faced challenges threatening its original vision.

For instance, its spectrum and bandwidth aren’t fully utilized, there’s increased infringement of data privacy and the centralized nature of the network makes it susceptible to malicious attacks.

How can anyone possibly fix these internet issues?

The New Kind of Network (NKN) believes it has viable and timely solutions required to solve the problems of the Internet 2.0 in use today by leveraging 

NKN is an open-source blockchain protocol designed to provide a 

 (P2P) connectivity platform to incentivize internet users in a way that optimizes internet bandwidth for improved speeds and lower costs. 

The protocol aims to disrupt the traditional centralized client-server model of the internet and telecom networks in the same way 

 disrupted centralized finance by decentralizing computing power. 

NKN hopes to position itself as a critical pillar in a blockchain-powered internet, where users can share network connections in an open, efficient and secure way. Its network operates on an incentive model in which users are rewarded for sharing their internet connection and bandwidth. By better optimizing internet bandwidth, users can enjoy improved speeds at reduced costs.

NKN functions as a connectivity exchange for data transmission. The platform utilizes a distributed ledger of nodes in a P2P network to identify and record validated network traffic transactions, and is capable of supporting millions of nodes. Currently, the platform has 91,582 full consensus nodes (as of Sep 1, 2023) on its mainnet, which is vast as compared to about 10,000 nodes on Bitcoin’s network. 

Think of nodes as cell towers. The more cell towers a telecom company has, the better the customer’s internet experience. Each node facilitates data relay and bandwidth sharing, contributing to overall network capacity. The nodes need only connect to their neighbor nodes to efficiently provide clients with connectivity.

NKN’s nodes operate 24/7 and have internet connections from about 100 Mbps up to 1 Gbps, with each one serving thousands of clients concurrently. The best part is that the transactions don’t depend upon a central authority or a telecom organization to process data transfer transactions. 

NKN’s distributed network is powered by the NKN token. Users can buy the tokens to complete digital asset transfers and pay for data transmission resources on the platform, and they can also mine tokens. The New Kind of Network has made it easy for everyone to mine tokens. You only need simple hardware, like a home router or PC with a stable internet connection. Next, choose an automated solution to complete the process — or mine the tokens the old-fashioned way. Either way, the platform has created three packages to help users mine tokens:

NKN is a developer-friendly network. It supports all major programming languages, including C++, Java, Python, JavaScript and Golang, and mobile phone languages for iOS and Android. 

The platform also provides an end-to-end system that allows 

 developers to build faster and easier without moving through different blockchain protocols and security providers. Finally, DApp developers can use the NKN blockchain to host and monetize their DApps.

NKN seeks to create a decentralized and anonymous P2P internet system that improves efficiency, sustainability and safety. To achieve this novel feat, NKN relies on the following series of technical features.

Decentralized Data Transmission Network (DDTN)

As the network layer of NKN, the Decentralized Data Transmission Network (DDTN) primarily transmits data to any node/client, without any central server. Since the network may contain over a million nodes that join or leave at any moment, the platform has chosen a proper topology to maintain scalability and security.

 (CDHT) network topology, with the features below:

Each node has a randomized specific address and is connected to another set of nodes with the right distance for verification. This innovative mapping topology makes the routing of any node pair deterministic and verifiable while also protecting the network from malicious attacks.

In a centralized system, a middleman is used as the central authority to determine the validity of transactions. Since NKN is a decentralized network, it relies on a unique voting model based on Cellular Automata or Majority Voting Cellular Automata (MVCA) to achieve scalable consensus. 

Via the MVCA model, nodes only need to reach a consensus with their neighboring nodes, translating to a faster global consensus. This makes the MVCA consensus algorithm scalable for millions and even billions of nodes.

NKN relies on a Proof of Relay (PoR) consensus mechanism, which is a variation of the 

 (PoW) consensus mechanism. PoR is used to determine how much data each node relays. Unlike traditional PoW systems that reward based on computing function, PoR rewards miners who relay useful data along the network.

PoR is an important feature on the network because the amount of data relayed is directly correlated to the amounts of the token rewards.

PoR is implemented through a special hash signature chain that randomly selects data samples in an uncontrollable yet verifiable way. This allows for secure data transmission that’s impossible to tamper with, resistant to attacks and massively scalable. 

The Universal Communication System is a next-generation decentralized communication protocol designed to bridge traditional Web 2.0 services and the new era of 

 applications. The UCS uses NKN as its network layer, making NKN the TCP/IP layer (a communications tool that helps power the internet) in the UCS architecture.

NKN platform users can receive benefits from UCS, such as:

Simply put, the UCS offers NKN users fast and reliable interconnectivity between Web 2.0 and web3 applications without compromising security. 

NKN’s ambitious infrastructure aspires to make the community’s communication and internet interactions simpler and more secure through innovative products, such as the following.

dataRide is derived from two words: data and rideshare. It rides on the premise that data connectivity is smoother when shared and incentivized.

dataRide is a decentralized, open-source PaaS (platform as a service) that allows for fast and secure streaming, messaging and file transfer from person to person, machine to human and machine to machine.

Developers can also benefit from the tool’s lightweight SDK (software development kit) and low-cost deployment to build the ideal internet experience.

Are you concerned that your messages on your preferred chat app could end up in the wrong hands or compromise your work? 

If so, NKN's nMobile may be just the solution for you. It's an extra secure and decentralized chat app powered by dataRide that’s available for iOS and Android devices. By removing all centralized servers, the app guarantees security-sensitive audiences like crypto communities, finance, legal and health professionals a chat platform that’s impenetrable and truly private. 

For AI buffs, the app has integrated OpenAI ChatGPT into its secure private chat to utilize it for private one-on-one chats in both private and public groups.

Common chat apps like Signal and WhatsApp may provide encrypted messaging services, but their reliance on a centralized database leaves them vulnerable to hacks and other online vices like SIM swapping.

With nMobile, all your messages are only stored on the device and only you can read them.

nConnect is a revolutionary remote access solution available for iOS devices that’s powered by the NKN P2P relay network. Users can access their private data remotely, even from devices protected by firewalls or gateways.

With a network of over 100,000 servers in more than 60 countries, nConnect ensures that quality tunneling nodes are available for users to access data and applications from anywhere.

NKN Coin is the native cryptocurrency of the New Kind of Network. It’s a 

 that enables users to transact in digital asset transfers, pay for data transmission resources and purchase bandwidth. NKN Coin can be earned through mining the NKN blockchain.

The network offers two types of tokens: NKN mainnet tokens and 

. Since 2019, the platform has allowed for two-way token swap, and has also resolved to support the dual existence of the tokens.

NKN has a maximum supply of 1 billion tokens, with a circulating supply of 650 million. The initial token allocation is as follows:

17% — Strategic building of NKN ecosystem

As of Oct 2, 2023, NKN’s price was $0.09, a 93.72% decrease from its all-time high of $1.44 on Apr 9, 2021, and an over 1,000% increase from its all-time low of $0.0067 on Mar 13, 2020.

Price experts are fairly bullish on the NKN price forecast. According to PricePrediction’s 

 for 2025, the token is expected to hit a price of $0.26 and increase to $1.71 in 2030.

Another price prediction platform, DigitalCoinPrice, is 

, with a prediction of $0.31 by 2025 that could rise to $0.90 in 2030.

Looking at the prediction figures, the big question in the investor’s mind would be: Will NKN reach $1?

The price prediction experts agree that NKN has the potential to increase demand for its native token by growing its product offerings. With this trend and the immense potential of the general crypto market, NKN is expected to reach the $1 price point around 2030.

NKN is a pioneer in decentralizing the internet, a critical component of today’s world. Everyone wants an internet service that’s fast, secure and spy-free, and NKN is setting the pace.

With over 90,000 full consensus nodes spread across 50 countries, NKN is now among the world’s largest blockchain networks.

The NKN team has shown outstanding commitment to improving its platform through unique innovations and frequent product updates. The latest products, such as nPool, a beginner-friendly node mining pool, and Surge, a P2P file sharing client, are some of the innovative offerings that indicate NKN’s future growth. 

Smart innovations coupled with an extensive global network of nodes are indicators that NKN is potentially a good investment for an investor with a long-term mindset.

That said, this isn’t financial advice, and we highly recommend you 

 into NKN before investing in the project. 

You can buy NKN tokens as a USDT Perpetual contract on Bybit (

). As a user-friendly crypto exchange, Bybit offers you unmatched transaction security, advanced data protection and triple-layer asset protection. 

The internet currently faces serious structural, utilization and security issues. NKN aims to solve these problems by providing a decentralized P2P solution with blockchain technology. Through its incentivized program, NKN motivates internet users to share internet connections and utilize unused bandwidth. This way, the decentralized internet system becomes more open and secure while allowing users to retain control over their data — an indispensable infrastructure built by all and made for all.

NKN: Bringing You the New Kind of Network With Blockchain

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards