Weekly Cryptocurrency Market Data Highlights

*** Weekly: BTC Surge, ETH Breakout and Crypto Week *** 🔹 BTC’s surge to new highs rests on solid structural factors: Solid onchain metrics (tempered MVRV, high long-term holder dominance, shrinking exchange balances, controlled derivatives leverage, and rising global M2) indicate that this is a structural, not speculative rally. 🔹 Global M2 growth has historically led Bitcoin by ~110 days with high correlations across most windows, suggesting fresh liquidity steadily migrates into crypto. Expanding money supply lowers cash yields and encourages “reach-for-beta” behavior, while bitcoin tends to capture a disproportionate share of that flow. That said, we advise treating M2 as a directional gauge rather than a precise forecasting tool. 🔹 The breakout of ETH has been the big story of the last two weeks, with corporate treasury accumulation surging. ETH has established itself as one of the preferred assets to express a view on the theme of stablecoins and tokenization, with around 10 ETH-dedicated corporate treasury vehicles having accumulated around 733k ETH ($2.5B) YTD, based on our own assessment. 🔹 Meanwhile, we see more hedge funds utilizing the ETH “basis trade”, as evidenced by a $1.83B build-up in leveraged funds’ short ETH future positions on the CME and $2.27B in net spot ETH ETF inflows MTD. This trade yields an estimated 8% annually, with an additional 3% from staking if funds opt for spot ETH over ETH ETFs. 🔹 In a historic “Crypto Week”, the US House of Representatives yesterday approved the Digital Asset Market Clarity (CLARITY) Act – i.e. the crypto market structure bill – which now advances to the Senate. The House also approved the GENIUS Act (stablecoin bill), and the President signed this into law on Friday. See full weekly: https://lnkd.in/ehNjKDem

What actually happened in crypto this week (and why I care): First, stablecoins keep proving they’re the killer app. Visa expanded USDC settlement for U.S. banks using Solana as the settlement rail. This isn’t a crypto experiment anymore. This is payments infrastructure quietly moving onchain. No memes. No drama. Just faster, cheaper money movement. Second, the next generation is already here. New data from Coinbase shows Gen Z and Millennials are about twice as likely to own crypto as older generations. This matters. Adoption isn’t being driven by ideology or hype cycles anymore. It’s being driven by people who expect digital-native money as a default. Third, institutions are choosing specific lanes. Spot XRP ETFs crossed $1 billion in cumulative inflows since launching last month. Even in a risk-off market, capital is still moving. It’s just more selective now. Fourth, AAVE DAO is in a real governance fight. A proposal to redirect protocol revenue and consolidate control under a new entity triggered strong backlash from tokenholders. The core issue isn’t technical. It’s philosophical. Who actually owns a decentralized protocol when billions are involved? This is DeFi growing up in real time. And zooming out to market action. We saw a leverage flush this week. BTC and ETH sold off, hundreds of millions in liquidations cleared out excess risk. At the same time, BNB showed relative strength, briefly pushing above $870 while much of the market lagged. The tape is cautious, but not dead. My takeaway: This week wasn’t about hype or headlines. It was about power, rails, and ownership. Stablecoins are becoming default infrastructure. Younger generations are driving adoption. Institutions are allocating with intention. And DAOs are being forced to answer hard questions about control. This is what maturation looks like. It’s quieter. It’s messier. And it’s far more real than the last cycle. If you’re watching crypto only through price charts, you’ll miss it. If you’re watching the rails being built underneath, you’ll see what’s coming next. #crypto #news #visa #stablecoins #aave #governance #genz #millenial #coinbase If you want to stay in the know about crypto news, subscribe to my newsletter: https://lnkd.in/e5ajT3mM

If you only look at broad crypto indices, it would appear as if the digital assets market has paused the past few weeks after a significant runup post-election. But most crypto indices do a poor job of accurately representing the entire asset class, as these indices are market-weighted and, therefore, are predominantly composed of BTC, ETH, and SOL. Further, it’s almost impossible for any passive strategy or broad-based index to keep up with the innovation and new token launches.    For example, the Hyperliquid (HYPE) token launched two weeks ago over Thanksgiving and is already a Top 30 asset with a nearly $10 billion market cap after rising over 400% from launch (and +80% last week). Similarly, most of the AI sector (now composed of AI bots and platforms) is less than 2 months old. None of these will show up in any index, even though they have been the market leaders for the past few weeks and continued to soar in value last week.  Similarly, while some of the hot DeFi tokens are old enough and big enough to be included in some indices (like ETH-based AAVE, +36% w-o-w), there are few, if any, indices that carry Solana DeFi (i.e. RAY, +10% w-o-w), Base DeFi (i.e., AERO, -5% w-o-w) or any of the recent newcomers (i.e. HYPE and ENA, +26% w-o-w).     The overall crypto market cap barely budged last week due to large caps stalling, but make no mistake, there is still a roaring bull market happening in new sectors and themes. For more, read our weekly blog: https://lnkd.in/g_bR3bFm

Market update Executive Summary: Last week underscored a resilient cryptocurrency market in the face of higher-than-expected CPI figures, showcasing a quick recovery in risk assets, including crypto, after a brief sell-off. Strong inflows into BTC spot ETFs and a bullish sentiment across various sectors, including AI and gaming, highlight a diversified interest and optimism in the crypto space. Last week we noticed a dynamic market with significant movements in major cryptocurrencies and emerging trends in the AI and gaming sectors, emphasizing the market's robust response to macroeconomic indicators and sector-specific developments. Key Highlights: - CPI Surpasses Expectations: Headline CPI at 3.1% and Core CPI at 3.9%, causing a brief sell-off then rapid recovery in risk assets, including cryptocurrencies. - BTC Spot ETFs See Strong Inflows: Net inflows reached $2.2 billion, contributing to bullish market sentiment. - CME Margin Requirement Increases: Prompted short covering, boosting BTC spot prices and forward spreads to 11-12% annualized. - Shift in Investor Appetite: Bitcoin dominance decreases by 0.60%; notable inflows into altcoins like #ETH, #SOL, #ADA. - Total Value Locked Reaches $70 Billion: First time since June 2022, indicating a strong recovery and bullish sentiment. - Bitcoin and Ethereum Performance: Bitcoin surpasses $50,000, Ethereum shows signs of undervaluation despite reaching new TVL highs. - AI Sector Growth: Highlighted by OpenAI's Sora release and significant price movements in AI-related crypto projects, with Sleepless AI growing by 18%. - Controversy Over Starknet Foundation Airdrop: Community backlash due to eligibility criteria and concerns over team token unlock. - Gaming Sector Performance: Immutable and Ronin show strong gains; Pixels upcoming token launch on Binance launch pool expected to draw significant attention. - Web3 Games to Watch: SHRAPNEL and Gunzilla Games - Off the Grid (Gunzilla's AAA game) show promising developments and anticipation for mainstream release.