CMC Market Pulse delivers actionable market insights, giving you all the key narratives and developments you need in under 5 minutes.
Market Overview 📉
Just like the week prior, crypto markets started the week with a strong move towards the upside over the weekend, which carried on into the week before a sharp retracement as the week closed. Nevertheless, Total Crypto Market Cap is still up just over 6% this week, currently sitting at $2.54T.
Bitcoin (BTC) saw a gain of 3.18% across the week, while Ethereum (ETH) continued to show weakness, closing the week down 0.37%.
Daily liquidations were largely balanced, with heavy short liquidations on Tuesday while long liquidations dominated on Wednesday. Funding rates on BTC and ETH remained largely flat, hovering around the 10% range.
📌 Tether announces an impressive $2.5B profit for the quarter, with an all-time high market capitalization of USDT at $120B. - Link
📌 Crypto asset manager, Canary Capital, files for a Solana ETF with the SEC, making them the second to do so, after VanEck. - Link
📌 Michael Saylor announces a strategic goal to raise $42B over the next three years to acquire more BTC under his company, MicroStrategy. - Link
Why does it matter?
Crypto markets made a strong push for new highs this week, with BTC leading the move, carrying on from last week’s strength. While BTC tapped the prior all-time high in the $73.5K range, the move failed to follow through and the market gradually retraced. The weakness was exacerbated by a weak showing in traditional equities with the S&P 500 and Nasdaq losing just over 2.2% in the past week, led by disappointing earnings releases and forecasts by tech giants, Microsoft and Meta.
The week saw liquidity flow back to BTC, with BTC dominance making a new high at 60.24%, while altcoins bled out against it. TOTAL3/BTC showed a similar trend, with the index falling 3.84% in the week to form a new low since March 2021. Likewise, ETH/BTC also continued to trend lower, following weakness from the week prior, falling almost another 4% in this week alone.
Notable outperformers among altcoins mostly centered around memecoins, with Moo Deng (MOODENG), Pepecoin (PEPECOIN), and Fwog (FWOG) faring as some of the top performers this week. Other notable altcoins include Instadapp (INST) due to the launch of Fluid DEX, as well as Raydium (RAY), which could be attributed as an infrastructure play to the memecoin frenzy on Solana.
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Narrative of the Week 📰
Despite weakness in sector leaders, the AI bot memecoins narrative continues to retain its spot as the flavor of the week.
📌 Base releases Based Agents, a toolkit allowing developers to deploy autonomous AI agents with on-chain functionality in just three minutes. - Link
📌 Flashbots X project, Teleport, and NousResearch collaborate to launch a provably fully-autonomous agent, tee_hee_he, which quickly spawned an Ethereum memecoin, TEE. However, the team has been quick to distance themselves from the token, even labeling it as a phishing token on Etherscan, to the dismay of holders. - Link
Why does it matter?
The AI agent and AI-themed memecoin narrative continues to captivate the crypto space, with new AI agents launching every day in an attempt to ride the wave. However, with the hundreds of copycat projects, newer projects have to distinguish themselves to provide some form of unique experience or utility in order to compete among the masses. Much unlike the original wave of memes, in which a novel cute animal memecoin could sway the masses, when it comes to AI memecoins, it seems that in some cases, the tech does in fact matter.
Major Project Updates 🗓️
📌 Perpetual DEX, dYdX, lays off 35% of their workforce with a return to “startup mode” just three weeks after the return of dYdX founder, Antonio Juliano, as CEO. - Link
📌 Ethereum infrastructure giant, ConsenSys, lays off 20% of their workforce, amidst increasing regulatory uncertainty and macroeconomic struggles in the past year. - Link
📌 Oracle network, Chainlink, releases the Chainlink Runtime Environment (CRE), enabling the seamless integration of Chainlink on custom applications across different blockchains. - Link
📌 Zero-knowledge rollup, StarkNet, launches StarkNet V2.0 on mainnet, which has since achieved 857 transactions per second, breaking their original record of 503. - Link
📌 Circle releases a whitepaper, in collaboration with Inco Network, for Confidential ERC-20s, a new method enabling confidentiality in the transfers of ERC-20 tokens while maintaining compliance controls. - Link
📌 Bitcoin L2, Stacks, completes their latest Nakamoto upgrade, significantly improving transaction speed on the chain and setting the foundation for the launch of sBTC later in the year. - Link
📌 Coinbase L2, Base, releases Fraud Proofs, taking the chain one step closer to full decentralization. Fraud proofs enable anyone to participate in the security of the network, and to challenge fraudulent transactions on the chain. - Link
📌 Decentralized sequencing layer, Astria, launches Mainnet. Astria is built on Celestia, enabling multiple rollups to tap on its network for decentralized sequencing and settlement. - Link
Why does it matter?
Connecting the traditional finance space and crypto has always been one of the key angles to mainstream crypto adoption for many investors. With Chainlink being the dominant oracle network in crypto, it is no surprise that they have stepped up to facilitate this connection through the launch of the Chainlink Runtime Environment, with Chainlink founder, Sergey Nazarov, likening it to how the invention of the Java Runtime Environment brought finance to the Internet in the 90s.
DeFi Brief 🏦
📌 Fluid DEX goes live, bringing to the DeFi space smart collateral and debt, which enables lenders to earn trading fees by allowing their deposits to be used in liquidity provision. Similarly, borrowers can put their collateral to work, effectively lowering their borrowing fees. - Link
📌 Solana liquid staking platform, Jito, opens up deposits for SOL restaking, enabling deposits of SOL or three supports liquid staking tokens, ezSOL, fragSOL and kySOL. The vault cap of 25M has since been hit. - Link
📌 Solana restaking project, Solayer, unveils sUSD, a synthetic stablecoin backed by US Treasury bills. Users can now deposit USDC into the vault to participate and begin earning yield. - Link
📌 RWA stablecoin protocol, Usual, introduces the USUAL token, a deflationary token, of which 90% will be distributed to the community. The token will also allow holders to own 100% of protocol revenue, aligning the protocol and token holders. - Link
📌 Arbitrum-based perpetual DEX, Vela Exchange, is shutting down. New positions can no longer be opened and VLP stakers are now able to withdraw their liquidity without withdrawal fees. - Link
📌 Ambient Finance reimburses victims of their recent front-end attack. Repayments have been made in ETH for security reasons. - Link
Why does it matter?
Fluid DEX’s smart collateral and smart debt introduces two new primitives to the DeFi space, enabling the rehypothecation of lending market assets in liquidity provision to facilitate DEX trades. This significantly increases capital efficiency for the liquidity providers, who earn from both trading fees and lending fees, while at the same time, improving yields for depositors on the platform. Furthermore, this mechanism enables incentivised borrowing without the use of native token emissions, improving the sustainability of existing DEX models.
Meme Coins 🚀
📌 The LUCE memecoin has been launched after the Vatican announced their mascot for the upcoming 2025 Jubilee Year of the same name. - Link
📌 Daos.fun launches on Solana, enabling anyone to launch a hedge fund. Interested participants can deposit into an address for the fund and profits are distributed 50% to the creator and 50% to the investors. - Link
Fundraises 💰
📌 Rollup-as-a-Service platform, Gelato Network, raises $11M in funding from Hack VC, IOSG Ventures, Animoca Brands and Bloccelerate VC. - Link
📌 Infinex raises $67.7M in their Patron NFT Sale, with support from funds including Peter Thiel’s Founders Fund and Variant Fund, and angels including Vitalik Buterin, Anatoly Yakovenko and more. - Link
📌 Blind compute layer, Nillion Network, raises $25M in their latest round led by Hack VC, with support from HashKey Capital, Maelstrom, GSR and Animoca Brands, among others. - Link
📌 Solana scaling infrastructure platform, Nitro Labs, raises $4M in a seed round led by Lemniscap, with support from Borderless, Animoca Brands, Chorus One, Race Capital and more. - Link
📌 Ethereum-based solar company, Glow, raises $30M in a funding round led by Framework Ventures and Union Square Ventures. - Link
📌 Gamified fitness application, Moonwalk Fitness, raises $4.3M in a seed round led by Hack VC, with participation from Binance Labs, CMS Holdings, Monke Ventures and more. - Link
Airdrops Abound 🎁
📌 Solana-based AI data layer, Grass, opens their airdrops for claims, airdropping 100M GRASS tokens to early user. Claims will be open until January 15, 2025. - Link
📌 Optimistic rollup, Kroma Network, opens claims for their native token, KRO, which will remain open for the next 90 days. - Link
📌 Mantle opens claims for their latest COOK token, airdropping COOK to users who held staked ETH as mETH on Mantle or locked MNT tokens during any of Mantle’s prior campaigns. - Link
Tweet of the Week 📝
Source: intern
Surely, Ethereum will see a hated rally and catch up soon, right? Right?
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