(52/52) Weekly Market Insights: 13 Billion Bitcoin Options

Hot News

• Bitcoin prices fell 8.88% last week, the biggest drop since August 2024, as the Federal Reserve made a more hawkish rate cut forecast for 2025. The sell-off liquidated about $1 billion worth of perpetual contracts and also contributed to the selling pressure.
• Trading volume is expected to decline during the Christmas and New Year holidays, when investors tend to rebalance their portfolios and sell underperforming cryptocurrencies to reduce their total tax liability. More than $13 billion in notional value of options contracts will expire on Friday (December 27), and the market may see significant volatility during this period.

Macro Outlook

• Powell announced a 25 basis point rate cut at last week's FOMC meeting. Although the move was in line with market expectations, the committee's latest dot plot projections reduced the expected rate cuts from 4 to 2 in 2025. This more hawkish stance exerted downward pressure on the macro market. At the same time, the expected inflation rate in 2025 was raised from 2.1% (September forecast) to 2.5%, which may reflect the Fed's consideration of Trump's tariff policy.
• US retail sales grew 0.7% in November, higher than the market expectation of 0.5%. US GDP grew to 3.1% in the third quarter, higher than the second estimate of 2.8%. The personal consumption expenditure price index grew to 2.4% in November, slightly lower than the market expectation of 2.5%. Personal income grew 0.3% in November, and personal expenditure grew 0.4% in the same period, both 10 basis points lower than market expectations.

The upcoming economic calendar includes:

• Tuesday, December 24, 9:30 PM: US durable goods orders for November

Cryptocurrency Market Quick Facts

• Binance launched Binance Alpha, a new platform embedded in the Binance wallet that focuses on mining early tokens. It also serves as a selection pool for pre-listed tokens on the Binance exchange.
• Deutsche Bank is reportedly developing a new Ethereum layer 2 network, Dama 2, which will be built on the ZKsync technology stack.
• The US SEC approved the first Bitcoin and Ethereum spot combination ETF submitted by Hashdex and Franklin Templeton.

Layer 1 and Layer 2 Public Chains

• Avalanche completed the Avalanche9000 upgrade and launched the infraBUIDL(AI) Program, providing up to $15 million in direct funding and post-funding to accelerate AI development within the Avalanche ecosystem.
• Ripple launches its fiat-pegged USD stablecoin RLUSD on XRP Ledger.
• Polygon rejected a proposal to use more than $1 billion in stablecoins in bridge contracts for DeFi yields.
• Kraken launches its Ethereum layer 2 network Ink on mainnet.
• Sonic launched its mainnet, offering up to 10,000 transactions per second (tps), sub-second confirmations, and a native decentralized Ethereum bridge.
• Stacks launched sBTC on the mainnet with an initial deposit limit of 1,000 BTC, and withdrawals will be available in late Q1 2025. sBTC currently offers 5% APY, with earnings paid in sBTC.
• Omni Network launched its mainnet, enabling users to access liquidity from Ethereum, Arbitrum, Optimism, and Base through its network.
• Saga launched Saga Mainnet 2.0, laying the foundation for the Liquidity Integration Layer (LIL) in the first quarter of 2025, unifying liquidity across all chains, supporting gas-free DeFi interactions, integration of Uniswap V3, EVM support provided by Evmos, and more.
• Aptos CEO Mo Shaikh announced his resignation, saying he would "start a new chapter."

Dapps

• Lido has announced that it will stop supporting stMATIC, a liquid staking solution on Polygon POS.
• Ethena launched a new stablecoin called USDtb, which is backed by BlackRock's BUIDL Fund as an underlying asset, which may serve as an alternative solution in a negative funding rate environment. Subsequently, Ethena partnered with Usual to allow USDtb to be used as collateral for USD0. In addition, Ethena also partnered with World Liberty Finance to list sUSDe as one of the asset collaterals on the platform.
• Usual launched its liquid staking token USUALx, which entitles holders to 10% of all USUAL issuance rewards, 33.33% of the project's revenue, and future rights to the DAO treasury.
• Mocaverse, the NFT collection backed by Animoca Brands, announced the launch of Moca 3.0, a multi-chain-enabled digital identity infrastructure.

Governance/Project Updates

• Ethereum validators, including Ethereum core developers Eric Connor and Justin Drake, have proposed raising the gas limit, which could reduce transaction fees by 15% to 33%.
• The Mantra community is voting on a proposal to modify the OM decomposition schedule. Multiple allocations will be decompositioned in 2025, with the earliest being March 2025, after which a linear decomposition schedule will be implemented. The proposal also suggests reducing the on-chain throughput rate from 8% to 3% starting in 2025.
• Uniswap announced that the Unichain testnet will undergo a permissionless fault proof upgrade on January 6, 2025. The mainnet will be opened after the security and stability of the new system are verified.
• Ether.Fi passed the proposal to allocate 5% of the protocol revenue to repurchase ETHFI and redistribute it to ETHFI stakers.
• Frax proposed BUIDL as one of the supporting assets of FraxUSD.
• Fluid proposes to launch Fluid DEX and FLUID tokens on Androa.
• Doodles NFT creator hints at upcoming token release.

Token Unlock

• IMX tokens were unlocked on December 27th and represent 1.44% of the token supply.
• GRASS tokens were unlocked on December 28th and represent 1.52% of the token supply.
• PRIME tokens were unlocked on December 31st and represent 1.47% of the token supply.
• OP tokens were unlocked on December 31st and represent 2.55% of the token supply.
• SUI tokens were unlocked on January 1st and represent 2.8% of the token supply.
• JTO tokens were unlocked on January 7th and represent 4.15% of the token supply.
• MOVE tokens were unlocked on January 9th and represent 2.24% of the token supply.
• IO tokens were unlocked on January 11th and account for 2.76% of the token supply.