CMC Market Pulse delivers actionable market insights, giving you all the key narratives and developments you need in under 5 minutes.
Market Overview 📉
This week saw a dump leading into the start of the week, led by the DeepSeek news, trading alongside the traditional equities market, which reacted negatively to the news. Bitcoin (BTC) plunged from 105K to 97.7K, before gradually recovering into the week as the market digested the news. The total crypto market cap fell slightly this week, with a drop of just under 1% to $3.708T this week from $3.732T the week before.
Bitcoin (BTC) climbed 1.1% over the week, while Ethereum (ETH) underperformed, falling 1.45% from the week prior.
Daily liquidations on the long side spiked early in the week, with more than $660M liquidated on Monday led by the DeepSeek news. Short liquidations still remain largely flat, with an average of just over $100M liquidated per day. Funding rates in general remained largely constant, with most majors hovering in the single digit to low double digit ranges.
📌 Michael Saylor’s MicroStrategy acquires another 10,107 BTC for $1.1B at an average price of $105,596 across the past week, making this their second consecutive purchase above $1B in value. - Link
📌 MicroStrategy announces STRK, a new convertible preferred stock offering, of which 2.5M such stock is planned for issuance. The proceeds will be utilized for working capital and the purchase of more Bitcoin. - Link
📌 Trump Media and Technology Group announces plans to invest in Bitcoin and “similar cryptocurrencies”. - Link
Why does it matter?
The week caught most market participants off guard, with a rapid sell-off to open the new week, liquidating almost a billion dollars from the cryptocurrency markets within a 24 hour window. While the initial move was brutal, the market found its footing shortly after and gradually climbed higher. With the Fed’s interest rate decision coming in as expected, further uncertainty was removed from the market, pushing prices higher. Traditional markets also followed the same patterns, with the S&P 500 down 0.81% across the week after falling 2.16% on Monday’s move. Similarly, the Nasdaq saw itself down 1.84% after opening the week with a 3.3% move downwards.
The increased volatility pushed Bitcoin dominance higher as altcoin dispersion only continued to increase. Bitcoin dominance rose more than 2.1% in the initial half of the week before slowly retracing back down as market participants found the courage to bid risk assets again.
The majority of altcoins suffered this week, with most unable to reclaim levels from the week prior despite Bitcoin’s recovery. Outperformers include Solana DeFi coins, Jupiter (JUP) and Jito (JTO), RWA tokens, Ondo Finance (ONDO) and Mantra (OM), and perpetual DEX and upcoming alt-L1, Hyperliquid (HYPE).
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Narrative of the Week 📰
China-based AI firm, DeepSeek, releases their latest AI model, R1, which alleges to be on-par with current leading AI models in the market while having been trained at a fraction of the cost, spooking US markets on fears of falling US tech dominance.
📌 DeepSeek’s launch has led to a potential $1T wiped out from the stock market, with US tech and semiconductor companies hit especially hard. Nvidia took one of the hardest hits, losing 17% in a single day. - Link
📌 Investors lean towards the development of DeepSeek as an indicator of the commercialization of AI, which increases the attractiveness of investments in the agentic AI categories, rather than the current narrative of semiconductor and chip manufacturers. - Link
Why does it matter?
AI has long been a strong narrative for the markets ever since the launch of ChatGPT, which pushed AI usage forward tremendously. Up till recently, the development of AI had been focused around the US, with companies such as OpenAI, Google and more, spearheading its development. While the “winner” in the AI race has not yet been determined, the release of DeepSeek, a high-quality model which was allegedly trained on comparatively low cost, threatens the US tech dominance which it has enjoyed thus far.
Major Project Updates 🗓️
📌 The Abstract chain arrives on mainnet, introducing their own social wallet, the Abstract Global Wallet, and Abstract Live, a streaming platform for content creators. - Link
📌 AI agent launchpad, Virtuals Protocol, expands to Solana, taking their platform omnichain with token migration supported by LayerZero. AI agent token liquidity pools will be supported by Meteora using VIRTUAL pairs, similar on Base. - Link
📌 Omnichain DeFi infrastructure layer, THORChain, goes insolvent, with validators pausing the chain to pass a restructuring plan to protect the network’s core functionality. - Link
📌 Blur L2, Blast, introduces Blast Mobile offering BLAST token holders yields of over 50% APY on USD, powered by native yield and BLAST token incentives. - Link
📌 Mode Network launches Synth, a Bittensor subnet designed to power DeFi AI agents on Mode Network. Additionally, the launch of dynamic TAO (dTAO) will also provide additional incentive opportunities for MODE holders. - Link
Why does it matter?
Throughout the cycle, Solana has been the leading chain for new token launches, with the support of token launchpad pump.fun. However, in late 2024, Base captured a portion of that mindshare with the rise of AI agents, supported by Virtuals Protocol, an AI agent launchpad. However, despite its success, the VIRTUAL token never saw a listing on Coinbase, which could have been a push factor for Virtual Protocol to expand to Solana, to compete with several other large AI agent frameworks on the chain. Interestingly, shortly after the expansion announcement, Base saw the token launch of AI platform, Venice AI, which saw a token listing on Coinbase in the same day, leading to speculation that Virtuals Protocol’s move to Solana had sparked an overhaul of the Coinbase listing process.
DeFi Brief 🏦
📌 Solana DEX aggregator, Jupiter Exchange, announces that 50% of protocol fees will be redirected to JUP token buybacks. - Link
📌 Jupiter Exchange introduces the concept of Jupnet, an omnichain network, designed to aggregate all of crypto into a single decentralized ledger to optimize UX for users and developers alike. - Link
📌 Institutional DeFi lending platform, Maple Finance, introduces Lend + Long, enabling USDC loans which utilize the interest paid out to purchase BTC call options, allowing depositors to benefit from positive BTC price action while guaranteeing a floor interest rate. - Link
📌 RWA stablecoin issuer, Usual Money, introduces Usual Stability Loans (USL), which enables their bond product, USD0++, to be used as collateral for loans to boost liquidity and support parity for USD0++. - Link
📌 Fluid (by Instadapp) launches Multiply, enabling a smooth one-click interface for leveraged positions via looping on their platform. - Link
Why does it matter?
Jupiter Exchange makes huge moves on the weekend following their second Jupuary airdrop, during the Catstanbul event in Turkey. With plans for expansion to its own omnichain network and the shift in tokenomics to fuel buybacks through protocol fees, the value proposition for Jupiter has shifted to much more than just a DEX aggregator. Additionally, with Solana being one of the biggest winners this cycle and the recent Trump memecoin fueling a strong week of trading volume on-chain, the tailwinds are looking strong for the project.
Meme Coins 🚀
📌 Venmo co-founder, Sam Lessin, launches a memecoin, jellyjelly, for his new social app, Jelly, on Solana, the second in a wave of founder-led memecoin launches after Vine’s Rus Yusupov launches the VINE token. - Link
📌 Jupiter Exchange announces an acquisition of a majority stake in normie-focused memecoin exchange, Moonshot. - Link
📌 Unicorn Fart Dust (UFD) developer, RonsBasement, was allegedly compromised, leading to the theft of ~$1.05M in tokens. $500K has since been raised in donations in a fresh wallet to support the project. - Link
Fundraises 💰
📌 Blockchain interoperability protocol, Analog, raises $5M in a funding round with investors including Foresight Ventures, Gate Ventures, BackerDAO and more. - Link
📌 MEV-focused rollup infrastructure project, Radius, raises $7M in a funding round led by Pantera Capital, with support from Hashed, Superscrypt, LambdaClass and Crypto.com Capital. - Link
📌 Blockchain identity solution, Humanity Protocol, raises $20M in a funding round backed by Pantera Capital and Jump Crypto. - Link
📌 Solana virtual machine (SVM) chain, Fogo, raises $8M in a community round on crowdfunding platform, Echo, with four Echo groups led by Cobie, CMS Holdings, Larry Cermak and Kain Warwick, participating. - Link
📌 Omnichain memecoin launchpad, Printr, raises $2.5M in a pre-seed round, with investors including the Sui Foundation, Axelar Foundation and Flow Foundation, among others. - Link
📌 Token distribution and credential protocol, Sign, raises $16M in a Series A round, led by YZi Labs (formerly Binance Labs). - Link
📌 Decentralized identity infrastructure project, D3, raises $25M in a Series A funding round led by Paradigm, with participation from Coinbase Ventures and selected angel investors. - Link
Airdrops Abound 🎁
📌 Restaking L2, Karak Network, introduces the Karak Foundation and the incoming Karak token, KAR, which will likely be airdropped to eligible users at a later date. - Link
📌 Privacy-focused AI product, Venice, airdrops 50% of their token supply, with 25% going to Venice users and 25% to the Base community, including holders of VIRTUAL, AERO, DEGEN and more. - Link
📌 OpenSea announces a snapshot, enabling access to OpenSea 2’s private beta if your address held a Gemesis NFT on 26 January 2025. - Link
Tweet of the Week 📝
Source: @ordax
The battle for AI dominance is just getting started.
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