💡 Welcome back to DV Chain's Weekly Market Commentary! The new year kicked off on a strong note for both crypto and equities, rebounding after the late-2024 selloff. The AI sector continues to gain market attention, with projects like VIRTUAL surpassing a $4B market cap. Meanwhile, MicroStrategy added $101M in BTC last week, sparking speculation about its future purchasing strategy ahead of earnings. With key events, such as Trump's inauguration, Grayscale's Solana ETF deadline, and more set the stage for an exciting start to 2025. Dive in below for insights and upcoming catalysts shaping the market:
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Market Recap
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• Crypto and Equities traded well in the first few days of 2025 after selling off towards the end of 2024
• The AI sector continued to perform well as on-chain AI agents have been the hot trend over the past weeks
  • Virtuals (VIRTUAL), the viral AI launchpad on Base, surpassed 4b market cap as the market makes its case to be valued similarly to L1 blockchains
  • We’re seeing flows in VIRTUAL, AIXBT, AI16Z, GOAT, GRIFFAIN, ZEREBRO and continuing to add new AI coin support as liquidity permits

• MicroStrategy bought an additional $101 million of BTC last week
  • Last 5 weekly purchases were 2.1b —> 1.5bn —> 561m —> 209m -> 101m
  • Earnings estimated to be on 2/4/25
  • There has been speculation that Microstrategy will stop purchasing BTC into earnings, the sizing seems to suggest this, but this past week’s buys were already unexpected when comparing to his buying patterns going into past earnings
    
    
• Looking ahead:
  • Trump inauguration 1/20
  • Gary Gensler resigns 1/20
  • SOL - Grayscale Solana ETF Approval Deadline 1/23
  • FTX repayments in Q1
  • Staked ETH ETF
  • Trump’s pro crypto and DeFi Admin

Upcoming Catalysts
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• $BTC
  • MSTR blackout period upcoming, BTC buying has been tapering off heavily
    
    
• $ETH
  • ETF flows have been robust since the election
  • Future flows aren’t fully priced in yet, which has been the biggest driver of the cycle
  • Likely the staking ETF gets approved earning in Trump’s term (signaled by Hester Pierce)
    
    
• $LDO
  • DeFi as a sector is going to benefit from the shift in regulatory environment
  • LDO fundamentally is a very strong project, clipping almost $200m in fees on an annualized basis to its treasury
  • It has maintained majority of market share in the LST/LRT space, despite higher temporary yields in new competitor’s liquidity bootstrapping farms
  • From an institutional standpoint, it is much stronger than competitors in terms of safety and network effects. The Lido Dao’s roadmap prioritizes institutional adoption, which we think is an astute plan, given the recent interest in crypto and tokenization from Wall Street
  • It’s likely a Staked ETH etf will be coming under the Trump admin
  • Fee Switch likely incoming
  • Consensys lawsuit thrown out
  • Lido V3
    
    
• $ONDO, 1/18/25
  • 3.2B unlock, representing about 10x the Avg Daily volume
    
    
• $JUP, Jan
  • Jupuary airdrop will be sometime mid to late January
    
    
• FTX creditor distributions in Q4 ‘24 - Q1 ‘25
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