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Market Overview 📉
This week saw Bitcoin (BTC) continue to break lower as the market anticipated hot economic data leading into the week’s CPI and PPI readings. However, the data came in cold, sending markets ripping higher as market participants reevaluated the state of the market, with BTC reclaiming the $100K level at the end of the week. The total crypto market cap climbed this week, with a rise of just under 2% to $3.439T this week from $3.372T the week before.
Bitcoin (BTC) climbed 7.91% over the week, while Ethereum (ETH) performed much weaker, rising only 2.71% from the week prior.
Daily liquidations on the long side jumped early in the week, with almost $600M liquidated on Monday alone. Short liquidations still remain largely flat, with an average of around $150M to $200M liquidated per day on the reversal in price action across the board. Funding rates in general have increased ever so slightly, but most still remain in the single digit territory, highlighting a cautious approach to the current market from market participants.
📌 Michael Saylor’s MicroStrategy, acquires another 2,530 BTC for $243M at an average price of $95,972 across the past week. - Link
📌 Tether relocates their entire group to El Salvador after acquiring a Digital Asset Service Provider (DASP) license. - Link
📌 Core CPI comes in lower than expected, cementing the figures from the Core PPI the day prior and sending risk assets higher. - Link
Why does it matter?
The prior week sparked a scare in the general market as market participants braced for zero rate cuts in 2025, amidst a relatively strong labor market and a seemingly overly hot market. With last week’s data in mind, the market entered this week expecting another set of hot economic figures with PPI and CPI, two core inflation metrics. However, with the better than expected readings, markets flipped bullish again, reversing the losses early in the week. Coupled with Trump’s bullish announcements surrounding crypto legislation, BTC pushed higher to reclaim the $100K level going into the end of the week.
Traditional markets fared well too with the S&P 500 climbing almost 1% across the week, almost 3% up from the lows, with the Nasdaq faring similarly, up 3.67% off the weekly lows.
Bitcoin dominance fell this week after a strong push at the start of the week, closing off with a 0.76% drop across the past seven days, sparking hopes of an incoming alt season alongside the Trump inauguration. Notable outperformers among altcoins were still largely centered around AI-related tokens, including AI agent aixbt by Virtuals (AIXBT), Fartcoin (FARTCOIN) and AI Rig Complex (ARC). Other outperformers included dino coins such as XRP (XRP) and Stellar (XLM), as well as DeFi tokens such as Lido (LDO) and Morpho (MORPHO).
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Narrative of the Week 📰
With just under a week to go, the upcoming inauguration of the incoming US President Donald Trump takes the spotlight as the core focus for the week.
📌 Trump’s SEC to overhaul their crypto policy, including to review pending SEC enforcement cases in the courts. - Link
📌 Trump is expected to begin issuing executive crypto policy orders on his first day in office, with his team making it clear that “this is a priority”. - Link
Why does it matter?
As the market entered the new year, many market participants began to take caution, wondering if the market had become overly optimistic on the incoming Trump presidency and its impact on the crypto markets. However, with days left leading to the inauguration, Trump is proving that he is serious about crypto, making promises and moves to set the groundwork for an overhaul of the regulations surrounding the industry, including pausing current SEC enforcement and planning for crypto-related directives from Day One in office.
Major Project Updates 🗓️
📌 Tron founder, Justin Sun, announces USDD 2.0, a new stablecoin on Tron boasting a 20% APY, which he claims is paid out simply because they “have plenty of money”. - Link
📌 Popular Ethereum-based NFT collection, Azuki, announces their token, ANIME, which will be launching on Ethereum and Arbitrum in January 2025. Besides NFT holders, Arbitrum users, Hyperliquid stakers, and Kaito Yappers will also receive a portion of the token supply. - Link
📌 Nubit introduces Goldinals, a unified token standard for Bitcoin, designed to unify the existing meta-standards on Bitcoin such as BRC-20s, Runes, Ordinals, and more. - Link
📌 Tether collaborates with interoperability protocol, LayerZero, to offer USDT0, a USD stablecoin built on the Omnichain Fungible Token (OFT) standard that is designed to further increase the token’s interoperability across various networks. - Link
Why does it matter?
Azuki’s move to launch their own token mirrors the recent launch of the Pudgy Penguins’ PENGU token, which has achieved a peak valuation of $4B less than a month after its launch. A well-executed launch could see ANIME following the same trajectory, especially with Azuki as one of the better performing NFT collections on Ethereum. A percentage of the token supply will also be distributed to Hyperliquid stakers, validating a long-standing theory by Hyperliquid bulls that staking HYPE tokens will generate yield from token airdrops on the chain.
DeFi Brief 🏦
📌 Usual Money’s high-yield bond, USD0++, “depegs” from its $1 value, after the team announces a change in its redemption mechanism. The depeg also resulted in liquidation of loans using USD0++ as collateral. - Link
📌 Solana restaking layer, Solayer, announces plans for their upcoming community token sale, which will raise a maximum of $10.5M at an implied fully-diluted valuation of $350M. - Link
📌 Solana DEX, Raydium, introduces perpetual futures contracts on Raydium in collaboration with Orderly Network, offering more than 70 trading pairs on launch. - Link
📌 Restaking protocol, Renzo, introduces bzSOL (restaked Binance staked SOL). - Link
📌 Derive (formerly Lyra) announces their roadmap for the upcoming year, including plans for AI-powered trading, their own yield-bearing stablecoins, dUSD, and market maker vaults for liquidity providers. - Link
Why does it matter?
Usual Money’s implementation of their new redemption mechanism triggers a panic across USD0++ holders, as token holders panic dump USD0++ to lows of $0.89 on-chain. While initially redeemable for 1 USD0 ($1), the new floor price of $0.87 – as updated by the Usual Money team to reflect the present value of the USD0++ bond – caused many to immediately dump their tokens. Several lending markets, including Morpho, were implicated due to hardcoded values for USD0++ prices, which resulted in the protocol stepping in to manually liquidate loans that were over their loan-to-value (LTV) ratios.
Meme Coins 🚀
📌 AI investment and development DAO, Aiccelerate, falls into controversy after a significant percentage of the token supply is distributed to a small group of whitelisted KOLs and builders, many of which have already sold off their tokens, with some selling for seven-figure sums. - Link
Fundraises 💰
📌 Popular wallet, Phantom, raises $150M in a Series C funding round led by Sequoia and Paradigm, with support from existing investors, including a16z crypto and Variant. - Link
📌 On-chain UX toolkit, Reown, raises $13M in a Series B funding round, led by Union Square Ventures and 1kx, with participation from Shopify, Kraken, Crypto.com Capital, Figment Capital, and more. - Link
📌 Berachain liquidity aggregator, Ooga Booga, raises $1.5M in a strategic round led by Primal Capital, with support from Quantstamp, Aquanow, blocmates, Rubik, and more. - Link
📌 MegaETH-based DEX, GTE, raises $10M in a seed funding round, with $6.942M raised from venture capital funds and angels, and another $2.5M raised via Cobie’s fundraising platform, Echo. - Link
📌 Stablecoin-focused L1, 1Money Network, raised $20M in a seed funding round, with investors including Tribe Capital, Hack VC, Kraken Ventures, F-Prime Capital, and Galaxy Ventures, among others. - Link
Airdrops Abound 🎁
📌 Solana DEX aggregator, Jupiter Exchange, releases their airdrop checker for 2025’s Jupuary airdrop, which distributes JUP tokens based on swap volume, JUP tokens staked, and more. - Link
📌 BTCFi protocol, Solv Protocol, releases their airdrop checker for the SOLV token airdrop, which goes live on Friday, 17 January, at 09:00 UTC. - Link
📌 Options platform and L2, Derive (formerly Lyra), opens their DRV token airdrop for claims, distributing tokens to users who deposited or traded on the platform. - Link
Tweet of the Week 📝
Source: 0xaporia
The most pro-crypto president in the history of the United States is being inaugurated, and you’re bearish?
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