Weekly Market Insight: February Week 1

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Market Updates

03 Feb 2025

Headline News

- Bitcoin and the broader crypto market experienced a massive sell-off alongside the US stock market. Bitcoin's price declined by 4.8% last week, driven by macro factors such as the impact of the DeepSeek R1 model and Trump's announcement of a 25% tariff on Canada and Mexico, a 10% tariff on China, and a commitment to implementing additional tariff measures on EU countries.
- Bitcoin's price plummeted another 3.8% on Monday, triggering over $2 billion in liquidations. The Crypto Fear and Greed Index dropped to its lowest level since October 2024.

Macro-Outlook

- Jerome Powell announced that interest rates will remain unchanged, expressing concern over elevated inflation. The market currently estimates a 63% probability of a 25bps rate cut in June.
- The ECB cut the deposit facility rate by 25bps to 2.75%, in line with market expectations.
- The US advanced GDP reading declined to 2.3% in Q4 2024, the slowest growth in three quarters, down from 3.1% in Q3 and below forecasts of 2.6%. Durable goods orders fell by 2.2% in December, significantly missing market expectations of a 0.6% increase.
- The U.S. core PCE annual rate for December came in at 2.8%, matching both expectations and the previous reading. Personal income in December increased by 0.4%, in line with market expectations, while personal spending rose by 0.7%, surpassing the forecast of 0.5%.

Upcoming Economic Calendar including,

- Monday, February 3, 11:00pm: The U.S. Manufacturing PMI in January
- Tuesday, February 4, 11:00pm: The JOLTs Job Openings in December
- Wednesday, February 5, 11:00pm: The U.S. Services PMI in January
- Friday, February 7, 9:30pm: The U.S. Non-Farm Payroll and Unemployment Rate in January
- Friday, February 7, 11:00pm: Michigan Consumer Sentiment in February

Weekly-Cryptos-Overview

- Two MicroStrategy of Ethereum have been introduced, both shared the same name as ETH Strategy. One is led by Joseph and Justin, while another one is led by Clouted.
- MicroStrategy Chair, Michael Saylor, has raised $563.4 million via new series A perpetual strike preferred stock (STRK) which aims to be listed on NASDAQ, and will conditionally convert into more shares of MSTR.
- The Czech National Bank approved a proposal to analyse the options for investing in additional asset classes such as crypto asset.
- Trump Media Group introduced new financial services and FinTech brand, TruthFi, investing $250 million in SMAs, ETFs, Bitcoin and crypto-related securities, with plans to enter the decentralized finance sector.

Layer 1 and Layer 2s

- Abstract Chain launched its mainnet, introducing seamless onboarding with web2 credentials, Abstract portal for interacting with protocol ecosystem and earns XP.
- Movement has launched its developer mainnet, offering permissionless app deployment. Movement is reportedly in discussion with the Department of Government Efficiency (DOGE) as the blockchain solution for the department. World Liberty Finance (WLFI) has acquired approximately 2.4 million MOVE.
- Cardano has completed Plomin Hard Fork, enabling Delegate Representatives (dReps) which represent ADA holders to vote on treasury measures and hard forks.
- UBS Bank has tested its UBS Key4 Gold product on ZKSync, allowing its Swiss customers to directly purchase physical gold.
- Mantle introduced Enhanced Index Fund which provides seamless exposure to crypto beta, Mantle Banking which provides seamless payment, lending and wealth management, and Mantle X which deploys and manages AI agents tailored for the broad universe of Mantle.
- Mode launched Synth subnet on Bittensor, incentivising miners to develop price forecasting model for AI Agent.
- Initia introduced Weave, providing users with a CLI that offers the same simple and hassle-free deployment experience as RaaS while empowering them with the customizability and control of a local deployment.
- Sei Foundation launched a $65 million venture fund to back DeSci protocols on its network.

Dapps

- Uniswap V4 is now live across 10 different networks, featuring hooks contracts that allow anyone to customize how pools, swaps, fees, and LP positions interact.
- Virtuals announced expansion to Solana and commits using 1% of trading fees to buy SOL for creating a Strategic SOL Reserve to support and reward agents and creators. Virtuals also announced its Nation Fiscal Policy which includes support from pre-launch, post-launch but pre-sentience, post-sentience and post-launch fundraising. The policy aims to support good AI agents with funding, liquidity and publicity.
- Maple Finance introduced the "Lend + Long" vault, enabling users to earn 4% floor APY and variable yield based on BTC price action. The excess yield generated from loans is used to buy BTC call option.
- Symbiotic launched its mainnet, more than 13 protocols have already onboarded the shared security mechanism.
- Karak, another restaking protocol, announced details of its KAR token. The token will facilitate the Karak Network Stack (KNS) and cross-boarder transfers between Layer-1 within Karak ecosystem. KNS will be the primary focus on Karak's 2025 roadmap, which provides flexible toolkit to spin up specialized Layer 1 blockchains for anyone.
- Injective upgraded its EVM compatibility into the core architecture, increasing the max throughput by 13x, atomic transactions and introducing plug-and-play modules for easy deployment.
- Jito has launched its TipRouter on the mainnet. It will take a 3% fee from tips and split to 2.7% to Jito DAO Treasury, 0.15% to JitoSOL vault stakers and 0.15% to JTO vault stakers
- ElizaOS launched v0.1.9, featuring Instagram client, Discord and Telegram autonomous agent enhancements, NVIDIA inference, Livepeer LLMs and more. The team also announced ai16z will build single-sided LP positions using the agent tokens in the portfolio to generate additional yield.
- LRT² has rebranded to King Protocol, a basket of yield reward generated via restaking.
- Phala Network partnered with NEAR to develop Private ML SDK, an open-source solution for secure and verifiable LLM.
- Nous Research announced Psyche, a decentralised network designed to train AI models.
- Aethir partnered with MAITRIX to launch AUSD, an overcollaterised stablecoin backed by ATH, designed to facilitate predictable rewards for GPU Cloud Hosts.

Upcoming Alpha and Governance

- Berachain is expected to launch its mainnet very soon.
- Jupiter is expected to start the JUP buyback mechanism using 50% of the protocol fees this week.
- Ondo is holding the Ondo Summit on February 6 in New York City. The team is expected to make some major reveals during the event.
- The DeFAI project, Hey Anon, is expected to go live on Febraury 7.
- Pudgy Penguins teased collaboration with Line Friends.
- Near announced Chain Signiture Roadmap, aiming to increase throughput by 30x and reduce latency by 50%. The team also aims to integrate TEE for the MPC network, support Solana and TON signature schemes, and read data from other chains.
- TON Network shared its 2025 H1 roadmap which included Accelerator upgrade, increasing network throughput and stability during peak loads.

Token Unlock

- JTO token unlocked on February 7th, amount representing 3.97% of the token supply.
- MOVE token unlocked on February 9th, amount representing 2.17% of the token supply.
- IO token unlocked on February 11th, amount representing 2.58% of the token supply.
- APT token unlocked on February 12th, amount representing 1.98% of the token supply.
- SAND token unlocked on February 14th, amount representing 8.41% of the token supply.
- STRK token unlocked on February 15th, amount representing 2.45% of the token supply.
- ARB token unlocked on February 16th, amount representing 2.13% of the token supply.
- APE token unlocked on February 17th, amount representing 2.12% of the token supply.
- MELANIA token unlocked on February 20th, amount representing 23.3% of the token supply.

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