Crypto Market

BTC and ETH Market Insight

In the last days of 2024, crypto trading volume has dropped significantly, with a 64% decrease compared to the previous week. The trading downtrend, especially in speculative altcoins, is unsurprising. However, Historically Q1 is ETH's strongest quarter, and the real altseason typically begins in the year following BTC Halving. BTC is expected to remain volatile with no clear short-term direction. The consolidation and reduction in leverage after the significant post-US election moves seem healthy. In December, stablecoins' total market capitalization rose by 5.51% to $203 billion, surpassing $200 billion for the first time. This marked the fifteenth consecutive month of growth.

Options Market

Realised volatility stayed relatively high during the week as the market was rangebound. Heading into the weekend and the New Year, realised volatility drifted lower while implied volatility remained rather stable throughout the week. The BTC term structure is in contango, with front-end ranging 50%-55%  and back-end slight above 60%, whereas ETH is flat-ish around 71%. As such, the volatility carry shifted to the slightly positive zone. Skew term structure moved in favour of calls as the nerve caused by the washout eased. ETH/BTC continued to struggle in the downward trend. 

Altcoins and Blockchain News

• On December 29th, according to Jesse Pollak, the head of the Base protocol, who shared data on X, the total amount of ETH bridged to Base in the past 90 days has doubled to over 1 million ETH.

• As per information revealed by BitcoinNews, the net inflow of gold ETFs in 2024 was $454 million, while Bitcoin ETFs saw a net inflow of $36.8 billion, making it 81 times greater than the gold ETF inflow.

• Sophon, a modular blockchain based on ZKsync, has completed the mining migration and initiated Phase 2, with mainnet mining now open.

• Ethena Labs announced that Berachain's incentive deposit treasury for Ethena is now online and accepting deposits in USDe, sUSDe, as well as USDC/USDT.

• The Bitget team released a new version of the BGB whitepaper, announcing the introduction of a buyback and burn mechanism. In the initial burn, 800 million BGB held by the core team will be destroyed in one go, accounting for 40% of the total supply. Based on the current price of BGB, the value of the burned portion exceeds $5 billion.

• Following the burn, the total supply of BGB will be reduced to 1.2 billion, with 100% in circulation.

• According to official sources, Xterio, a game infrastructure and AI game studio, announced that their official token XTER will be launched on January 8, 2025.

• On December 26th, Binance Alpha announced the seventh batch of projects, including EVAN, BITCOIN, VISTA, AVAAI, and AITECH.

• According to BlockBeats, as of December 25th, Bitcoin had risen by 113% in 2024. However, based on hash rate indices and data from Google Finance, the stock prices of most listed mining companies were on a downward trend at the end of 2024, with declines as high as 84%.

Macro

The major benchmarks closed higher for the holiday-shortened week: the DJIA added +0.4%, the S&P 500 +0.7%, and the Nasdaq +0.8%. Chinese equities closed the week with mild gains: the Shanghai Composite Index added +0.95%, the CSI 300 +1.36% and the Hang Seng index added +1.87%.