Market Dynamics and Hotspot Analysis

Macroeconomic Environment

U.S. inflation data release sparks optimism

In December 2024, the Consumer Price Index ( CPI ) rose by 2.9% year-on-year, while the core CPI increased by 3.2% year-on-year. Although the overall CPI rose by 0.4% month-on-month, reaching a nearly 10-month high, the core CPI only increased by 0.2% month-on-month. The data indicates that inflationary pressures have eased, mainly benefiting from a decrease in hotel accommodation prices, a slowdown in the increase of healthcare services, and moderate rent increases.

This data boosted market expectations for a rate cut by the Federal Reserve, although it is generally believed that a rate cut may not happen until after June. As a result, both the US stock and bond markets rebounded, with the S&P 500 index rising nearly 2% and the Dow Jones surging over 700 points. The cryptocurrency market also strengthened, with Bitcoin returning to the $100,000 mark, highlighting its sensitivity to macroeconomic trends.

Global pension funds begin to allocate Bitcoin

Pension funds in multiple countries are attempting to purchase Bitcoin, indicating a growing interest in this emerging asset class. Pension funds in Wisconsin and Michigan, USA, have become one of the major holders of Bitcoin ETFs. Some pension fund management institutions in the UK and Australia have also made small allocations to Bitcoin through funds or derivatives.

Although cryptocurrency investment remains a minority in the pension industry and most advisors are cautious about clients venturing into this area, an increasing number of pension funds are beginning to focus on this emerging asset class, reflecting a gradual change in institutional investors' attitudes towards crypto assets.

Web3 Sector Dynamics

The United States will implement third-party reporting requirements for cryptocurrency transactions.

Starting in 2025, cryptocurrency trading in the United States will face third-party reporting requirements for the first time. All transaction information conducted on centralized trading platforms will be submitted directly to the IRS(. Institutions such as custodial trading platforms, digital asset wallet providers, cryptocurrency ATM operators, and digital asset payment processors must track users' buying and selling transactions throughout the year and submit relevant reports to users and the IRS at the beginning of 2026.

The specific implementation timetable indicates that the cost benchmark information report for crypto assets will begin in 2026, while the peer-to-peer trading report for decentralized platforms will be postponed until 2027, only requiring the reporting of total trading volume. Additionally, newly listed Bitcoin spot ETF trades will also be reported via forms 1099-B or 1099-DA, including share trades and taxable events generated within the fund.

) South Korea reports its first case of unfair trading of virtual assets

The Financial Services Commission of South Korea ###FSC( announced the first case of unfair trading after the implementation of the "Virtual Asset User Protection Act". The law will take effect in July 2024 and requires local virtual asset service providers )VASP( to report abnormal transactions and investigate unfair trading patterns.

According to reports, the suspects manipulated the market using a "pump and dump" tactic, by placing multiple buy orders to inflate the price of a certain cryptocurrency, and then quickly selling off a large amount of pre-purchased assets. The entire manipulation process typically takes place within 10 minutes, leading to severe price fluctuations of the target asset and illegally profiting hundreds of millions of Korean won within a month. This case marks an important step for South Korea in combating misconduct in the cryptocurrency market.

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Hot Narratives

) XRP price breaks through $3, market value exceeds $170 billion

The price of XRP has first broken through $3, reaching a new high since 2018, with a 15-day increase of 40%. Currently, XRP is only 17% away from its historical high of $3.84, and its market capitalization has exceeded $170 billion. This surge is mainly driven by expectations of cryptocurrency-friendly policies and the push for digital asset regulatory reforms in the United States.

Traders at the digital asset platform Abra point out that the surge in XRP is attributed to new partnerships, the launch of the Ripple stablecoin RLUSD, and speculation around a potential spot XRP ETF. "Whales" holding between 1 million to 10 million tokens continue to accumulate, providing support for this rebound. Analysis firm Santiment reports that since November, these addresses have accumulated 1.4 billion XRP, valued at approximately $3.8 billion. Additionally, Google Trends data shows that the search volume for XRP has surpassed that of Bitcoin.

Hot Projects

Sora Labs: An AI organization focused on the Solana ecosystem

Sora Labs is an artificial intelligence organization focused on the Solana ecosystem, primarily developing the following projects:

1. Zen: An open-source AI dialogue framework built with Go language, simplifying and flexibilizing the development of proxy chat systems.
2. Hana: A Twitter AI agent based on the Zen framework, showcasing the features of Zen.
3. Toolkit: A tool developed with Go and Rust that helps manage seamless collaboration with AI models.
4. Solana Toolkit: An extension toolkit providing specific functionalities for Solana.

All projects have been open-sourced.

Token Economics: DEV has purchased a total of 100 million tokens, of which 99.2 million have been locked until March 12, with 24.75 million tokens being linearly unlocked every two weeks. The next unlocking date is January 29. Additionally, 829.6K tokens have been transferred to the streamflow contract but have not yet been locked.

The top 100 holdings account for 61.95%, with the largest holder accounting for 9.92% being the locked portion, and the average buying price of the top 100 has doubled.

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