Crypto

• Market inefficiencies persist in crypto markets, particularly in cross-exchange arbitrage and futures basis trading
• Traditional factor models can be adapted for cryptocurrency markets with size, momentum, and liquidity factors showing statistical significance
• On-Chain metrics provide unique alpha signals unavailable in traditional markets

• Our short term view for 2025 was boring or scary.
• February threw boring out of the window, in less than two months we have seen trade war scares, politicians launching and rug-pulling memecoins, politicians tweeting about crypto strategic reserves, a massive exchange exploit and downside economic surprises.
• Price action through these events has been scary, at the beginning of February we saw a massive liquidation across cryptoassets, with some remarkable recoveries.

• Zenrock addresses critical blockchain interoperability challenges through its distributed Multi-Party Computation (dMPC) technology.
• While existing cross-chain solutions handle significant volumes, they remain vulnerable to security breaches, as evidenced by recent attacks resulting in losses over $965 million.
• Built on zrChain and zrSign, Zenrock’s dMPC network offers a decentralized, trust-minimized solution for cross-chain communication.

• 2025 is off to a tough start. Our call on boring or scary price action seems to be holding up.
• Bitcoin remains boring and is range-bound between $106k and $91k.
• Altcoins have been scary, with the average sector down 25%+. Sector Performance for Jan 2025.

• Ethereum leads in tokenization, but Solana and Sui are gaining traction with high-speed trading and alternative L1 adoption. Institutional multi-chain strategies may drive further competition.
• Ethereum’s L2s enhance scalability, but fee revenue is diversifying as Alt-L1s grow. Base shows how L2s can leverage Ethereum’s security while competing ecosystems challenge its dominance.
• TradFi is embracing blockchain, with stablecoins and tokenization set to expand. BlackRock’s BUIDL fund on Ethereum highlights its role as the preferred settlement layer for institutional finance.

• This consulting report explores ZKsync’s transformation from a Layer 2 scaling solution into the Elastic Network, a groundbreaking ecosystem of interoperable ZK Chains positioned to revolutionize institutional blockchain adoption.
• With Bitcoin ETF inflows exceeding $30B and major players like BlackRock embracing blockchain technology, 2024 has marked unprecedented institutional interest in crypto.
• However, widespread adoption faces two key challenges: blockchain fragmentation and the inability of public networks to meet institutional requirements for privacy and compliance.

• We’re excited to share our deep dive on zkVerify as part of the inaugural cohort for Delphi x The Tie’s Institutional Accelerator.
• This modular L1 blockchain is designed to become the universal verification layer for zero-knowledge proofs (ZKPs).
• Developed by Horizen Labs, zkVerify addresses critical challenges in ZKP implementation by optimizing verification efficiency, enabling proof verification at a fraction of the cost and expanding possibilities for scalable and interoperable applications.

• Large unlocks (over 1% of circulating supply) significantly impact prices, mainly concentrated in the week before and after the unlock. A 1% token unlock triggers, on average, a 0.3% price drop over the week preceding the unlock and another 0.3% drop over the week following the unlock.
• The strongest price effects occur two days before the unlock and on the third and fourth days after the unlock. Interestingly, the actual unlock day and the day after show little price impact.
• The similar magnitude of price drops before and after the unlock suggests that market anticipation is just as influential as the actual selling pressure.

• The $ZRO token was introduced in June 2024, with planned utilities that include protocol governance, transaction fee payment, and staking for DVN security. All three utilities have strong implications for $ZRO’s value.
• We foresee that the next three years will be marked by a rapid increase in $ZRO’s circulating supply, alongside growing utilization within the protocol and its adoption as a common currency for cross-chain trades.
• We propose a valuation framework for $ZRO that leverages the Market Cap to Transaction Volume (MC-Tx) ratio, combined with projected transaction volume scenarios. This framework aims to provide readers with a perspective on the relationship between protocol growth and token value.

• Nobody enjoys reading lengthy analyses during the holidays between Christmas and New Year’s Eve, and frankly, I am not inclined to write much either.
• Therefore, this edition of Crypto Moves is a concise one, focusing solely on our boldest predictions for the coming year—specifically for 2025.
• These forecasts are straightforward and easy to verify a year from now, whether we turn out to be right or wrong.

• According to Graph 1, during the period October 25th, 2024 – November 25th, 2024, the price of Bitcoin exhibited an exclusively upward trajectory.
• From the beginning of the period until November 6th, the digital asset followed a consolidation pattern amid fluctuations in its price and after this sub-period, an overall bullish momentum began.
• The MA-10 and MA-20 lines started from the same point.

• Deep dive into newer developments in AI, agent platforms, and decentralized training
• Exploration of the potential impact of decentralized networks in the telecom and data sectors
• Discussion on the transformative potential of projects like Worldcoin, Double Zero, and Andreen in the crypto space

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