Data & Insights: Bitcoin Ordinals, Stablecoins & EVM Chain Trends

Starting the year liquid(ated)

• The crypto market witnessed a dramatic surge in liquidations, reaching $525 million on January 8th, kicking the year off with some significant deleveraging as Bitcoin and Ethereum prices took a dip.
• • Long positions bore the brunt of the damage, with Bitcoin liquidations reaching $142.5 million, of which $101 million were longs, suggesting bullish positioning ahead of the drop.
  • Ethereum followed a similar pattern with $89.9 million in total liquidations, including $49.2 million in terminated long positions.
• The liquidation cascade coincided with Wednesday's Federal Reserve minutes release, which indicated a potentially more conservative approach to rate cuts in 2025.
  • The market reaction highlights the continued sensitivity of crypto markets to macro factors, particularly monetary policy expectations.
• Funding rates across many major cryptocurrencies briefly flipped negative, indicating a sharp shift in market sentiment as traders adjusted their positions.
  • Negative funding rates could present opportunities for contrarian traders, though volatility may persist as markets search for an equilibrium.
  • The event demonstrates that sudden deleveraging events remain prevalent in crypto markets despite market infrastructure improvements.
• The magnitude of the liquidation event reveals the significant leverage in the system at the start of the year.
  • The concentration of long liquidations suggests many traders had positioned aggressively for continued upside, leaving themselves exposed to sudden price movements.
  • Some of the optimism can be attributed to the anticipation of Donald Trump's presidential inauguration later this month as the new administration is expected to usher in a more crypto-friendly regime. 

F BTC

• January 8th saw significant outflows in the Bitcoin ETFs, with total outflows reaching $568 million across spot products, challenging the strong inflow trend that has characterized these instruments since December.
  • Fidelity's Bitcoin ETF, the second-largest by AUM, recorded its largest-ever outflow of $258 million, while market leader BlackRock saw $124 million exit its product.
  • The scale of these outflows stands in contrast to December's average daily inflow of $204 million, though total AUM remains robust at $112 billion.
• Ethereum ETFs weren't spared from the selling pressure, experiencing $159 million in outflows on the same day.
  • The synchronized outflows across both Bitcoin and Ethereum products suggest a broader reassessment of crypto exposure by institutional investors.
  • This coordinated movement could indicate portfolio rebalancing or temporary volatility rather than a fundamental shift in institutional sentiment toward digital assets.
• Despite the notable outflows, the broader ETF landscape continues to show signs of institutional engagement.
  • Spot Bitcoin ETF trading volumes reached $17.65 million in January, reflecting sustained interest and liquidity in these investment vehicles.
  • The market's ability to absorb such significant outflows without major disruption demonstrates the growing maturity of crypto ETF infrastructure.
• Looking ahead, market participants will be watching when inflows continue into the ETFs as anticipation looms over the new upcoming US administration.
  • The relative size of the outflows (approximately 0.5% of total AUM) suggests that they may be more indicative of tactical allocation shifts than strategic exits.
  • With institutional infrastructure continuing to develop, patterns of ETF flows will likely become an increasingly important indicator of professional investor sentiment.

Business as Usual?

• The total supply of usd0 has fallen from 1.84 billion to 1.54bn over the past week
  • This represents a 16% week-over-week decrease in the supply of usd0
• To recap, USD0 is a stablecoin issued by Usual Money backed by U.S. Treasuries, designed to maintain a 1:1 peg to the U.S. dollar.
  • The recent drop in its total supply is likely a direct consequence of Usual’s recent dual exit update.
  • Notably, the controversy centers on USD0's liquid-staked counterpart, USD0++, which functions essentially as a zero-coupon bond maturing over four years.
  • Usual introduced new redemption paths that allow holders to either exit at a discounted floor price of $0.87 per USD0++—set to gradually increase to $1—or redeem 1:1 by forfeiting a portion of accrued yields starting next week.
  • The changes were met with widespread backlash from the community, as many users argued that USD0++ had been previously marketed as redeemable 1:1 for USD0 without caveats. 
  • The sudden update led to millions of USD0++ being sold off and an imbalance in its largest Curve liquidity pool, which accounted for 92% of the pool composition at the time.
• Critics have accused Usual of effectively devaluing USD0++ overnight, locking in a loss of 13% for holders who minted or purchased the token at $1.
  • However, those on the opposite end of the argument pointed out that USD0++ was always designed as a bond-like product, with its value expected to rise over time as yields accrue.
  • Regardless, the controversy has brought a cloud of uncertainty amongst USD0 and USD0++ holders, and USD0++ current stands at $0.93, a 7% discount to its “peg” that was held just 5 days prior.

Gotta Go Fast

• Daily unique addresses (DUAs) on BNB Chain and Fantom have increased significantly in recent weeks.
  • DUAs on BNB Chain have grown by over 470% in just 2 weeks since the start of the new year.
  • Meanwhile, DUAs on Fantom have increased by over 730% since December 23, 2024, just 3 weeks prior to the time of writing.
• For BNB Chain, the 7-day moving average (7DMA) for daily transaction counts has risen from 3.85 million on January 1, 2025, to 4.42 million as of Saturday, January 11.
  • This recent increase in both DUAs and daily transactions for BNB Chain is likely caused by an uptick in perps activity on the network.
  • Perps volume on BNB Chain is up over 3,100% compared to last week
  • APX Finance is likely the largest contributor to this, with over $3.29 billion in volume this week, which is over 4,100% higher than last week.
• On the other hand, Fantom has seen its 7DMA for daily transactions rise modestly from ~299,000 on January 1 to 307,000 as of January 11.
  • However, this figure represents a 10% drop from its recent peak of 341,000 on December 23, 2024.
  • This discrepancy was likely caused by a short-lived spike in activity driven by Fantom’s migration into Sonic.
• The Sonic chain, launched by Sonic Labs in late 2024, is an EVM-compatible layer-1 blockchain that is an evolution of the Fantom network.
  • Notably, the migration from Fantom to Sonic includes a 1:1 token swap mechanism, allowing FTM holders to exchange their tokens for Sonic’s native token, $S.
  • This migration is what likely caused the notable spike in DAUs on Fantom in the days following Sonic’s mainnet launch.

Key Opinion AI

• The floor price of Quantum Cats, a collection of Bitcoin Ordinals NFTs, has increased from 0.17 BTC on December 21, 2024 to 0.32 BTC on December 11, 2024
  • This represents a significant 88% increase in just 3 weeks, bearing in mind the lack of activity or volatility in other notable Bitcoin NFTs such as Bitcoin Puppets or NodeMonkes.
• The fairly sudden rise in its floor price was likely the result of the AIXBT adopting a Quantum Cat NFT as its Twitter (X) profile picture on December 29, 2024, after being gifted it.
  • AIXBT is an AI agent from the Virtuals ecosystem that provides insights into current crypto market trends, narratives and on-chain analysis.
  • This move, along with the purchase of AIXBT tokens by the Quantum Cats treasury, brought significant attention to the collection.
  • The floor price subsequently increased by 88% in just 13 days, signaling a surge in demand likely driven by the visibility and credibility lent to the collection through this partnership.
• Interestingly, on January 10, 2025, AIXBT removed its Quantum Cat as its profile picture and switched back to its original profile picture.
  • However, the floor price of quantum cats has remained relatively stable and has not fallen as a result of this change.
  • It is worth noting that AIXBT still technically holds a Quantum Cat NFT on-chain but has chosen not to use it as a profile picture.
  • This could be a significant reason why the floor price has held steady despite the profile picture change, as the continued association between AIXBT and Quantum Cats remains on-chain.
• This dynamic highlights the growing influence of AI agents and their ability to influence and shape narratives and asset classes, particularly as they engage with them in meaningful ways.