Uncategorized
Crypto Daybook Americas: China’s DeepSeek Sends Bitcoin, AI Tokens, Stocks Tumbling
By Omkar Godbole (All times ET unless indicated otherwise)
Last week, we described bitcoin above $100,000 as a coiled spring ready to unleash energy in either direction. Unfortunately for the bulls, that energy is being released downward as market sentiment shifts in response to concerns over the impact of the low-cost Chinese AI startup DeepSeek on the U.S. AI sector and American technological leadership.
Bitcoin plummeted to $97,800 during Asian trading hours, with whales driving prices lower to liquidate overleveraged buyers on perpetual futures exchanges. GPU-heavy AI tokens saw sell-offs of up to 40%, with similar pressure affecting GameFi assets.
Nasdaq futures tanked 700 points, with shares in chipmaker Nvidia (NVDA) indicated 10% lower in pre-market trading. DeepSeek-R1 is expected to significantly reduce the costs of developing large language models, raising a questions on the validity of the rich valuations for AI-associated companies like Nvidia.
Trader and analyst Alex Kruger noted on X, «The problem is, few understand how DeepSeek changes things. it’s hard to quantify the issue—and when facing uncertainty, people derisk. When this happens in low liquidity conditions, the market flushes hard.»
Kruger is opting not to buy the dip, saying he prefers to short positions above $100,000 as he anticipates heightened volatility from the upcoming Fed meeting and potential political maneuvering from President Donald Trump. The Fed is expected to reiterate its wait-and-see approach, maintaining its hawkish December guidance on interest rates.
Still, all is not lost. Paul Howard, Senior Director at Wincent, said institutional participation could ramp up in the coming months.
«The next wave up will likely come from organic participation from institutions in the next 3-4 months. I’d be surprised to see a sharp bounce back to all-time highs before Q2,» he said in an email.
Howard identified newly launched layer-1 blockchains with a focus on security and transactions per second, like SUPRA, as valuable opportunities, while stressing that for long-biased funds, discovering alpha in a bearish market involves seeking out low market-cap layer-1s alongside their already established peers. Stay alert!
What to Watch
Crypto:
Jan. 27 (provisional): Abstract, an Ethereum L2, has its mainnet launch, which is expected to expand the reach of the Pudgy Penguins project beyond NFTs.
Jan. 28, 1:00 p.m.: Hedera (HBAR) network upgrade to v0.57.5.
Jan. 29: Cardano’s Plomin hard fork network upgrade.
Jan. 29: Ice Open Network (ION) mainnet launch.
Feb. 2, 8:00 p.m.: Core blockchain Athena hard fork network upgrade (v1.0.14)
Feb. 4: MicroStrategy Inc. (MSTR) Q4 FY 2024 earnings report.
Feb. 4: Pepecoin (PEPE) halving. At block 400,000, the reward will drop to 31,250 PEPE.
Feb. 5, 3:00 p.m.: Boba Network’s Holocene hard fork network upgrade for its Ethereum-based L2 mainnet.
Feb. 6, 8:00 a.m.: Shentu Chain network upgrade (v2.14.0).
Feb. 12: Hut 8 Corp. (HUT) Q4 2024 earnings report.
Feb. 15: Qtum (QTUM) hard fork network upgrade is scheduled to take place at block 4,590,000.
Feb. 18 (after market close): Semler Scientific (SMLR) Q4 2024 earnings report.
Feb. 20: Coinbase Global (COIN) Q4 2024 earnings report.
Macro
Jan. 27, 10:00 a.m.: The U.S. Census Bureau releases December 2024’s Monthly New Residential Sales report.
New Home Sales Est. 0.67M vs. Prev. 0.664M.
New Home Sales MoM Prev. 5.9%.
Jan. 28, 8:30 a.m.: The U.S. Census Bureau releases December Monthly Advance Report on Durable Goods Manufacturers’ Shipments Inventories and Orders.
MoM Est. 0.8% vs. Prev. -1.1%.
Jan. 28, 1:00 p.m.: The Fed releases December’s H.6 (Money Stock Measures) report.
Money Supply Prev. $21.45T.
Jan. 29, 12:00 a.m.: Japan’s Cabinet Office releases January’s Consumer Confidence Survey.
Consumer Confidence Index Est. 36.5 vs. Prev. 36.2.
Jan. 29, 4:00 a.m.: The European Central Bank (ECB) releases December 2024’s Monetary Developments in the Euro Area report.
M3 Money Supply YoY Est. 3.8% vs. Prev. 3.8%.
Jan. 29, 8:45 a.m.: The Bank of Canada (BoC) releases the (quarterly) Monetary Policy Report.
Jan. 29, 9:45 a.m.: The BoC announces its interest rate decision.
Est. 3% vs. Prev. 3.25% followed by a press conference at 10:30 a.m.
Jan. 29, 2:00 p.m.: The Federal Open Market Committee (FOMC) announces the U.S. central bank’s latest interest rate decision.
Target Range for the Federal Funds Rate Est. 4.25% to 4.5% vs. Prev.: 4.25% to 4.5% followed by a press conference at 2:30 p.m. Livestream link.
Token Events
Governance votes & calls
Compound DAO is voting whether to implement interest-rate curve adjustments for Stablecoin Comets across multiple networks, including Ethereum and Base.
Clover Finance DAO is voting whether to rebrand the CLV Network to Lucent Network to align with a pivot toward building a decentralized finance and artificial intelligence platform (DeFAI). The rebrand would include a migration from Polkadot to an SVM chain and a new token ticker, LUX.
Arbitrum DAO is voting on a proposal to establish the Arbitrum Strategic Objective Setting (SOS), which would allow DAO members to propose and vote on short to mid-term objectives.
Unlocks
Jan. 31: Optimism (OP) to unlock 2.32% of circulating supply worth $52.9 million.
Jan. 31: Jupiter (JUP) to unlock 41.5% of circulating supply worth $626 million.
Feb. 1: Sui (SUI) to unlocked approximately 2.13% of its circulating supply worth $226 million.
Token Listings
Jan. 28: Pudgy Penguins (PENGU) and Magic Eden (ME) to be listed on Kraken.
Jan. 29: Cronos (CRO), Movement (MOVE) and Usual (USUAL) to be listed on Kraken.
Conferences:
Jan. 29-31: Crypto Peaks 2025 (Palisades, California)
Jan. 30, 12:30 p.m. to 5:00 p.m.: International DeFi Day 2025 (online)
Jan. 30-31: Ethereum Zurich 2025
Jan. 30-31: Plan B Forum (San Salvador, El Salvador)
Jan. 30 to Feb. 1: Crypto Gathering 2025 (Miami Beach, Florida)
Jan. 30-Feb. 1: CryptoXR 2025 (Auxerre, France)
Jan. 30-Feb. 2: Oasis Onchain 2025 (Nassau, Bahamas)
Jan. 30-Feb. 4: The Satoshi Roundtable (Dubai)
Feb. 1-28: Mammathon (online), a global hackathon for Celestia (TIA).
Feb. 3: Digital Assets Forum (London)
Feb. 5-6: The 14th Global Blockchain Congress (Dubai)
Feb. 6: Ondo Summit 2025 (New York).
Feb. 7: Solana APEX (Mexico City)
Feb. 13-14: The 4th Edition of NFT Paris.
Feb. 18-20: CoinDesk’s Consensus Hong Kong
Feb. 19: Sui Connect: Hong Kong
Feb. 23-March 2: ETHDenver 2025 (Denver, Colorado)
Feb. 25: HederaCon 2025 (Denver)
Token Talk
By Shaurya Malwa
AI-themed agents and memes took a thumping Monday, with stalwarts Virtuals Protocol (VIRTUALS), ai16z (AI16Z) and eliza (ELIZA) sliding as much as 30% as China’s DeepSeek led to a reiteration of U.S. AI startup valuations.
The downturn dented massive Sunday rallies on Jupiter’s JUP and Base memecoin toshi (TOSHI).
JUP spiked 40% as founder ‘Meow’ announced at an annual conference that the platform would burn over $3 billion JUP tokens and begin using 50% of its fees to buy back the tokens from the market.
TOSHI more than doubled as Coinbase listed perpetual futures for the token, making it the only Base memecoin with both a spot and futures listing on the influential exchange.
The subsequent spike in demand sent the token to a peak market capitalization of $820 million.
Derivatives Positioning
BTC perpetual funding rates flipped negative during European hours, showing a net bias for shorts. Historically, such a positioning has tended to mark local price bottoms.
BNB, DOGE, TRX and AVAX also saw negative funding rates.
BTC, ETH short-dated options now show a bias for put options, offering downside protection. Expiries after February continue to show a bias for calls.
Key block trades for the day include a short volatility play, involving short positions in BTC $05K call and $98K put, both expiring on Jan. 10. In ETH’s case, shorts in out-of-the-money calls and a long position in the $3K put has been noted.
Market Movements:
BTC is down 5.95% from 4 p.m. ET Friday to $98,784.45 (24hrs: -5.84%)
ETH is down 6.12% at $3,050.20 (24hrs: -7.88%)
CoinDesk 20 is down 9.07% to 3,536.28 (24hrs: -9.66%)
CESR Composite Staking Rate is down 2bps to 3.1%
BTC funding rate is at 0.0006% (0.7% annualized) on Binance
DXY is down 0.26% at 107.17
Gold is down 0.21% at $2,767.13/oz
Silver is down 0.55% to $30.48/oz
Nikkei 225 closed -0.92% at 39,565.80
Hang Seng closed +0.66% to 20,197.77
FTSE is down 0.21% at 8,483.97
Euro Stoxx 50 is down 1.51% at 5,140.89
DJIA closed on Friday -0.32% to 44,424.25
S&P 500 closed -0.29% at 6,118.71
Nasdaq closed -0.5% at 19,954.30
S&P/TSX Composite Index closed +0.14% at 25,468.49
S&P 40 Latin America closed +0.53% at 2,322.63
U.S. 10-year Treasury was down 13 bps at 4.5%
E-mini S&P 500 futures are down 2.37% at 5,988.00
E-mini Nasdaq-100 futures are down 4.27% at 20,974.75
E-mini Dow Jones Industrial Average Index futures are unchanged at 44,216.00
Bitcoin Stats:
BTC Dominance: 59.45 (0.60%)
Ethereum to bitcoin ratio: 0.0392 (-1.7%)
Hashrate (seven-day moving average): 766 EH/s
Hashprice (spot): $60.2
Total Fees: 4.19 BTC/ $439,954
CME Futures Open Interest: 187,465 BTC
BTC priced in gold: 35.8 oz
BTC vs gold market cap: 10.17%
Technical Analysis
The RSI on the hourly chart dropped to 20 during the Asian hours, the lowest since late August.
In other words, bearish momentum was the strongest in nearly five months.
RSI readings below 30 are taken to represent oversold conditions and a sign of an impending bear breather.
Crypto Equities
MicroStrategy (MSTR): closed on Friday at $353.67 (-5.11%), down 4.9% at $336.35 in pre-market.
Coinbase Global (COIN): closed at $298.00 (+0.67%), down 4.9% at $283.39 in pre-market.
Galaxy Digital Holdings (GLXY): closed at C$32.52 (-4.18%)
MARA Holdings (MARA): closed at $19.99 (+0.2%), down 6.1% at $18.77 in pre-market.
Riot Platforms (RIOT): closed at $13.54 (+4.23%), down 6.94% at $12.60 in pre-market.
Core Scientific (CORZ): closed at $15.98 (-2.2%), down 15.33% at $13.53 in pre-market.
CleanSpark (CLSK): closed at $11.53 (+1.05%), down 6.76% at $10.75 in pre-market.
CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $26.22 (+2.22%), down 8.28% at $25.05 in pre-market.
Semler Scientific (SMLR): closed at $55.46 (-9.3%), down 9.48% at $50.20 in pre-market.
Exodus Movement (EXOD): closed at $61.25 (+39.2%), down 2.04% at $60 in pre-market.
ETF Flows
Spot BTC ETFs:
Daily net flow: $517.7 million
Cumulative net flows: $39.94 billion
Total BTC holdings ~ 1.173 million.
Spot ETH ETFs
Daily net flow: $9.18 million
Cumulative net flows: $2.8 billion
Total ETH holdings ~ 3.67 million.
Source: Farside Investors
Overnight Flows
Chart of the Day
As BTC and Nasdaq, gold has held relatively steady, possibly on the back of haven demand.
Haven appeal seems to have driven the yield on the 10-year Treasury note lower by nine basis points to 4.504%. Bond prices and yields move in the opposite directions.
While You Were Sleeping
Bitcoin Dives to Under $99K as DeepSeek, FOMC Steal Trump Effect (CoinDesk): Bitcoin fell below $99,000 as traders braced for this week’s FOMC meeting, and Chinese startup DeepSeek’s advanced AI model pressured U.S. tech valuations, weighing on market sentiment and crypto prices.
Solana, Dogecoin, XRP Plunge 10% as Bloody Start to Week Sees $770M Long Liquidations (CoinDesk): SOL and DOGE led declines as crypto markets saw $770 million in bullish liquidations and overall market capitalization dropped 8.5%.
Bitcoin May Be ‘Double Topping’ for a Price Slide to $75K (CoinDesk): Bitcoin’s inability to sustain gains above $100,000 signals weakening momentum. If the price drops below $91,300 it could potentially reaching as low as $75,000, analysts said.
China’s Economy Stumbles in Sign Rebound Hinges on More Stimulus (Bloomberg): China’s January PMI data showed manufacturing contracting and services slowing, a signaling faltering recovery amid weak demand and trade pressures. Analysts warned of further slowdown without stronger fiscal stimulus.
Fixed Income Investors Seek Ways to Navigate a Trump Presidency (Financial Times): Sticky consumer inflation, a strong U.S. jobs market and uncertainty over Trump’s policies have fueled a sell-off in Treasuries, though some investors see current prices as attractive for long-term gains.
Emerging Market Investors Eye Frontier Assets Shielded From Trump’s Tariff Threats (Reuters): Amid Trump’s tariff threats and global tensions, some investors are turning to frontier markets like Serbia, Ghana and Sri Lanka for growth potential and insulation from U.S. trade risks.
In the Ether
On Friday, cryptocurrency exchange Bybit was allegedly hacked by North Korea’s Lazarus group, which drained nearly $1.4 billion in ether (ETH) from the exchange.
Following the hack, Arthur Hayes, BitMEX co-founder and claiming to be a major ether (ETH) holder, wrote a post on X to Ethereum co-founder Vitalik Buterin on whether he will “advocate to roll back the chain to help @Bybit_Official.” Meanwhile, in an X spaces session, Bybit’s CEO Ben Zhou revealed that his team had also reached out to the Ethereum Foundation to see if it was something the network would consider, noting that such a decision should be based on what the network’s community wants.
Hayes’s post immediately provoked a fierce reaction from the Ethereum community, which was firm in its belief that it wouldn’t happen. Some even questioned whether the BitMEX founder was joking. CoinDesk reached out to Hayes over X to clarify his comments.
Ethereum members, like the core developer teams, are vastly against “rolling back” the network because it would override core elements of decentralization. If Buterin decided on his own that it would happen, then that would be seen as the end of Ethereum’s ethos, which heavily involves various developer teams and other community members when it comes to the health and state of the blockchain.
“Rolling back the chain would give ETH no purpose. What’s the point if you can just change rules,” said user @the_weso in a post on X.
Some outside the Ethereum community pointed to the 2016 DAO hack as an example when $60 million in ETH was stolen. The network went forward with a hard fork, splitting the old network into two, and the new chain continued on as Ethereum.
That hard fork was not a “rollback,” though; it was known as an “irregular state transition.” Ethereum technically can’t “roll back” the network because it relies on an account model, where accounts hold users’ ETH.
At the time of the hack, developers upgraded their nodes to a new client or software. Those who didn’t upgrade their nodes were still on the old chain, which became known as Ethereum Classic.
When the nodes upgraded to the new software, the stolen ETH could move from one Ethereum account address to the next.
“The ‘irregular state change’ that they implemented at the time of the DAO hard fork was this: they airlifted all the ETH in the DAO smart contracts out to a refund contract that would send you 1 ETH for every 100 DAO tokens you sent in,” wrote Laura Shin of Unchained in a post on X.
Major cryptocurrency exchange Bybit has seen total outflows of over $5.5 billion after it suffered a near $1.5 billion hack that saw hackers, believed to be from North Korea’s Lazarus Group, drain its ether cold wallet.
The total assets tracked on wallets associated with the exchange plunged from around $16.9 billion to $11.2 billion at the time of writing, according to data from DeFiLlama. The exchange is now looking to understand exactly what happened.
In an X spaces session, Bybit’s CEO Ben Zhou revealed that shortly after the incident, he called for “all hands on deck” to serve their clients with processing withdrawals and responding to inquiries about what was going on.
During the session, Zhou revealed that the security breach saw the hackers make off with roughly 70% of their clients’ ether, which meant that Bybit needed to quickly secure a loan to be able to process withdrawals. Yet, Zhou found that ether wasn’t the most withdrawn token, with most users instead withdrawing stablecoin from Bybit.
The exchange, Zhou noted, has reserves to cover these withdrawals, but the crisis deepened as, in response to the incident, Safe moved to temporarily shut down its smart wallet functionalities to “ensure absolute confidence in our platform’s security.”
Safe is a decentralized custody protocol providing smart contract wallets for digital asset management. Some exchanges integrated Safe, which allows users to maintain custody of their funds and has multisig functionality to enhance the security of their cold wallets.
While the exchange had reserves to back up users’ withdrawals, $3 billion worth of USDT was in a Safe wallet that had just been shut down as the wallet moved to understand the situation, according to Zhou.
On social media, Safe said that while it had «not found evidence that the official Safe frontend was compromised,» it was temporarily shutting down «certain functionalities» out of caution.
While Zhou and Bybit’s team were figuring out how to securely withdraw their $3 billion, withdrawals were mounting. Within two hours of the security breach, the exchange was facing requests to move over $100,000 off its platform, Zhou revealed.
Responding to the situation, Zhou told his security team to engage Safe to “find a better way to get this money out.” The team ended up developing new software with code “based on Etherscan” to verify the signatures “on a very manual level” to move the stablecoins back to their wallet and cover the withdrawal surge.
The exchange’s team had to remain up all night to be able to fulfill withdrawals, according to Zhou. As the exchange managed to move the $3 billion in stablecoin reserves, it was facing a bank run of “about 50%” of all the funds within the exchange.
Zhou said that since the incident, the exchange has moved a significant amount of funds off of Safe cold wallets and is now determining what system it will use to replace Safe.
Pushing to «Roll Back» Ethereum Was not Off the Table
Since the security breach, Bybit has engaged authorities. During the session, Zhou said that the Singaporean authorities took the issue “very seriously” and that he believes it has already been escalated with Interpol.
Blockchain analysis firms, including Chainalysis, were engaged. Zhou said, “As long as Bybit is there and continues to track [the stolen ether], I hope we can get these funds back.”
Notably, he revealed that pushing to «roll back» the Ethereum blockchain, which was suggested by some industry players on social media, including BitMEX co-founder Arthur Hayes, had been on the table for some time if the community agreed with it.
“I had my team talking to Vitalik and the Ethereum Foundation to see if there’s any recommendations they can offer to help. I do really thank all these guys on Twitter asking if there is a possibility to roll back the chain. I’m not sure what was the response on their side, but anything that would help we would try,” Zhou said.
When asked if «rolling back» the chain is even possible, Zhou responded he doesn’t know. “I’m not sure it’s a one-man decision based on the spirit of blockchain. It should be a work in process to see what the community wants,” he said.
It’s worth noting that a blockchain «rollback» refers to a state change that would allow for the funds to be recovered. While rolling back the Bitcoin blockchain is technically possible, such a state change on Ethereum would be more complex, given its smart contract interactions and state-based architecture.
Nevertheless, any state change would require consensus and likely lead to a contentious hard fork, drawing criticism from the community. This would likely split the Ethereum blockchain into two networks, each with its own supporters.
As for what exactly caused the hack to occur, is still unclear. Per Zhou, Bybit’s laptops have not been compromised. He said the movements of the transaction’s signers have been scrutinized but appear to have been routine.
“We know the cause is definitely around the Safe cold wallet. Whether it’s a problem with our laptops or on Safe’s side, we don’t know.,” Zhou added.
Uncategorized
Binance Research Survey Shows 95% of Latin American Crypto Users Plan to Buy More in 2025
A vast majority of Latin American cryptocurrency users—95%—plan to expand their holdings in 2025, according to a Binance Research survey of more than 10,000 investors in Argentina, Brazil, Colombia, and Mexico.
The findings show that 40.1% of respondents are expecting to buy more crypto within the next three months, 15.3% are looking to do so in the next six months, and 39.7% within 12 months. Only 4.9% have no plans to keep on investing this year.
Latin America led the world in crypto adoption in 2024, growing by 116%, according to research from payments firm Triple-A quoted in the report. The region now has 55 million cryptocurrency users, making up nearly 10% of total cryptocurrency users.
This rapid expansion has been fueled by rising asset prices, regulatory advancements, and new financial products like spot bitcoin exchange-traded funds (ETFs). Brazil has just last week become the first country to approve a spot XRP ETF.
Market performance has also bolstered investor confidence. «Latin America is a rapidly expanding region for the crypto sector, and the results of this research reinforce what we have observed in our operations,” Binance’s regional VP for Latin America, Guilherme Nazar, said.
Binance’s research shows that half of those inquired already use cryptocurrencies for over a year, with most entering the space expecting significant returns and searching for financial freedom.
Portfolio diversification, privacy, and protecting their money were also quoted as motives to invest in the space.
Read more: How a $115M Crypto Fund With Big Ambitions Plans to Invest In Latin America
Ethereum ‘Roll Back’ Suggestion Has Sparked Criticism. Here’s Why It Won’t Happen
Bybit Sees Over $4 Billion ‘Bank Run’ After Crypto’s Biggest Hack
Binance Research Survey Shows 95% of Latin American Crypto Users Plan to Buy More in 2025
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