TL;DR

• US nonfarm payroll largely exceeded expectations, significantly downbeating the market confidence in more potential interest rate cuts.
• Suspension of US debt ceiling has expired, extraordinary measures might be applied, supply shock of US Treasury issuance might be extended to 25H2.
• BTC and ETH trends continue to exhibit a positive correlation with ETFs, with ETH recording its second consecutive week of net outflows last week.
• BTC remains resilient, while altcoins remain weak.
• Highly hyped AI Agent-related tokens, such as Virtual, AI16Z, and Fartcoin, all recorded declines exceeding 40%.
• XRP among strongest tokens, AI Agent infrastructures continue to launch, and GTE nearly brings down Echo. In the venture market, 29 deals raised $120m, up almost 8 times from the previous week.

Macro Overview

US nonfarm payroll largely exceeded expectations, significantly downbeating the market confidence in more potential interest rate cuts.

The US nonfarm payroll data revealed last Friday gave the market a big shock, as it increased by 256,000 in Dec 2024, compared to the 160,000 expectation. Crypto and stock markets significantly dropped right after the data was released, as such overheated and “too strong to be true” economic data will significantly affect Fed’s decision on interest rate cut. Meanwhile, the unemployment rate also dropped to 4.1% from 4.2%, also outperforming the market consensus. While lots of opposition voices question the authenticity of data, as large corps are cutting jobs significantly nationwide, it is possible that the uprising might be contributed by SMEs in sectors like healthcare and consumers.

Last week, in a letter to the Congress, the Treasury Secretary Janet Yellen stated that the Treasury may begin using “extraordinary measures” to maintain operations starting January 14th, given that the suspension of the U.S. debt ceiling has expired. Although the debt ceiling is more or less a bargaining tool between two parties, the debt ceiling standoff can still cause fluctuations in the issuance and liquidity of U.S. Treasury securities.

Before a final outcome is reached, the restrictions on the Treasury issuance due to debt ceiling could lead to a reduction in the Treasury’s General Account balance, to provide the market with liquidity. After the debt ceiling was solved, the supply shock of Treasury issuance could push long-term yields higher in the second half of 2025, given the complexity of negotiation and allocating the financial resources.

The US dollar index went strong and made another ATH, approaching $110. As the US treasury 10-year yield achieved an 8-month high, investors are allocating their assets more to the US side, as the returns of carry-trade continue to grow.

Fed’s total assets barely moved last week, a slight $1mn was added to the reserve and the total went to $6.854tn. The Fed is pausing from time to time to access the tightening impacts on the financial system.

Despite the shockingly robust US payroll data, the gold price still rebounded, recorded a weekly gain and landed at $2,689.44. As Trump’s inauguration is coming soon, investors are eyeing on the potential impacts of his policies within the first 100 days.

Crypto Markets Overview

1. Main Assets

This week, the price of BTC stands at $94,000, while ETH is valued at $3,200. Last week, the cryptocurrency market experienced a significant decline, with BTC recording a maximum drop of 10%, later narrowing to 6%. In contrast, ETH saw a sharper decline, with a maximum drop of 20%, which has since narrowed to 13%. According to the yearly candlestick chart, BTC continues to exhibit strong performance; however, the overall sentiment toward altcoins remains considerably less favorable.

From the candlestick chart of BTC, it is indeed in a consolidation phase and needs to find a support level. The upcoming market trend is more inclined towards fluctuations, and new highs will not appear quickly.

2. Total Market Cap

As of this Monday, the total market capitalization of the cryptocurrency market stands at $3.18 trillion. Excluding Bitcoin and Ethereum, the market cap amounts to $942.9 billion, reflecting decreases of 7.8% and 9.3%, respectively. The gains from the week before last, combined with the declines observed last week, indicate that ETH continues to underperform compared to the overall market, with smaller gains during upswings and larger losses during downturns.

3. Net Inflows

As of this Monday, stablecoins amounted to 206.3 billion, an increase of 200 million compared to last Monday, with USDT and USDC each increasing by 200 million. The growth of stablecoins has stalled again.

In terms of ETFs, BTC recorded a net outflow of $700 million last week, with the inflows and outflows of BTC Spot ETF showing a positive correlation with overall market trends. Meanwhile, Ether Spot ETF saw a net outflow of 92,000 Ether last week, marking the second-largest weekly outflow in history, only surpassed by the outflows during its initial listing period.

4. Top 30 Crypto Assets Performance

Last week, BTC recorded a decline of 5.6%, while Ether saw a sharper drop of 12.2%. Many altcoins experienced maximum losses exceeding 30%, although some recovered slightly afterward. Notably, LINK, AVAX, and NEAR ended the week with losses exceeding 18%.

Highly hyped AI Agent-related tokens, such as Virtual, AI16Z, and Fartcoin, all recorded declines exceeding 40%.

The Key Crypto Highlights

1. CS Ph.D students from Rutgers University launch AIOS

AIOS, the world’s first “AI Agent Operating System”, has launched a cross-OS, cross-platform, cross-device system for deploying agents. This comes alongside an SDK with customisability instead of a rigid framework. The project also integrates a natural language processing system to unify code programming, workflow programming and natural language programming. The project reached a $150m market cap and currently sits at $60m.

2. GTE raises on Echo to build the world’s fastest decentralized exchange.

GTE, promoted by some as the “Hyperliquid of MegaETH”, has concluded several raises from Echo communities. Known as “the people’s VC”, Echo provides early-stage investment opportunities to retail investors and both GTE and MegaETH have raised on the platform at attractive valuations. With 1ms block times and 100k TPS enabled by MegaETH, GTE aims to build an all-in-one on-chain trading avenue.

3. Holozone enables the AI creation and cloning of human personalities

Holozone enables the creation, ownership and monetisation of specific AI Agents which have multi-modal interactions beyond texts. That comprises the “Holo” aspect of the project, which features hologram talking heads of popular figures such as Elon and Trump. As a framework, the project claims to facilitate developers to build agents capable of mutual interaction, contextual understanding, and autonomous decision-making.

Key Venture Deals

1. Eventflo raises $20m from Rollman Management

Eventflo provides real-world blockchain applications tailored for the event industry, benefiting organizers, attendees, and investors alike. The platform uses AI to streamline marketing and audience targeting, as well as the ticketing and operational aspects of events by incorporating blockchain technology. With a focus on improving transparency, efficiency, and security, Eventflo aims to enhance the overall experience of managing events.

2. SoSoValuee completes $15m Series A led by HongShan

SoSoValue, a one-stop financial research platform aggregating macro and crypto data, has raised $15 million at a valuation of $200 million. The investment was spearheaded by Hongshan, with contributions from SmallSpark, Mirana Ventures, and Safepal. This financial boost is anticipated to strengthen SoSoValue’s ability to deliver in-depth crypto data solutions, and its AI-based classified news and research system.

3. VOOX secures $50m from Pinnacle Capital

Founded in 2022, VOOX is a cryptocurrency exchange that leverages AI technology to enhance its trading capabilities. With AI integration and a user-friendly interface, VOOX stands out for both novice and experienced traders, making cryptocurrency trading accessible and efficient. The funding will mainly be directed towards enhancing infrastructure, improving security protocols, and ramping up marketing initiatives focused on attracting new users.

The number of deals closed in the previous week was 29, with Infra leading the way with 17 deals, representing 68% of the total number of deals. Meanwhile, both Social and GameFi had 3 deals, DeFi had 4 deals, and Data had the least with 2.

The total amount of disclosed funding raised in the previous week was $176.44 million, with the most coming from Infra with $120.7m. Some DeFi deals did not disclose their raises, and thus the sector constituted the least funding with $2.24m.

Total weekly fundraising rose to $120.7 million for the second week of the new year, an increase of 782% compared to the week prior. Weekly fundraising in the previous week was down 25% year over year for the same period.

About Gate Ventures

Gate Ventures, the venture capital arm of Gate.io, is focused on investments in decentralized infrastructure, middleware, and applications that will reshape the world in the Web 3.0 age. Working with industry leaders across the globe, Gate Ventures helps promising teams and startups that possess the ideas and capabilities needed to redefine social and financial interactions.

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