Alts Hold Beta, ETF Flows Firm, Deal Flow Picks Up — Are We There Yet?

• BTC ETFs attracted $2.75B in inflows, while ETH ETFs saw $0.3B in inflows
• Google search interest in “buy crypto” and “buy solana” peaked
• Circle acquired Hashnote and USYC tokenized money market fund

Crypto markets rallied, ETFs inflows stay strong, from cats and dogs to humans

Crypto markets ended the week with modest gains, led by bitcoin, as total market capitalization hovered just below $3.6 trillion and bitcoin dominance climbed past 57%. Markets rallied sharply earlier in the week, buoyed by speculation surrounding President Donald Trump’s inauguration speech, but gave back most of those gains after the speech made no reference to a bitcoin reserve. 

Among the blue chips, bitcoin rose by 3.1% week over week, while ether fell by 6.1%. In the US spot-only ETF universe, bitcoin ETFs recorded net cumulative inflows of $2.75 billion over the past 5 trading days, while ether ETFs saw $335.6 million in inflows during the same period. BlackRock continues to dominate inflows in the space. As of January 22, the iShares Bitcoin Trust holds 569,343 BTC, valued at approximately $58 billion at current market levels.

Among alts, Chainlink (LINK) and Solana (SOL) emerged as standout performers, logging impressive weekly gains of 14.4% and 24.9% respectively. According to a report by CoinDesk, Solana validators received a record-breaking 100,000 SOL in fees and tips-worth nearly $25.8 million driven by surging trading activity in the TRUMP and MELANIA tokens. Google search interest in “buy crypto” and “buy solana” also peaked, reaching the highest score of 100 on Google Trends. This wave of activity resulted in 24.7 million transaction bundles being processed, with Solana recording 1.5 million unique tippers out of its 4.5 million daily active users. Platforms such as Meteora and Orca experienced increased token-sniping activity, with bundles (groups of transactions prioritized by tips) becoming a core part of the activity.

The trading frenzy briefly boosted staking yields to 7.14% annually, while Solana’s inflation rate dropped below 5%. However, the elevated activity caused temporary congestion on the network. On January 19, Solana’s blockchain explorer paused new transactions for 30 minutes leading up to 9:43 pm UTC, with some users reporting “500 Internal Server Errors” on Solscan. Despite these brief disruptions, Solana has maintained 100% uptime over the past 90 days, with no outages since February 6, 2024, according to Status.Solana.

Aave led the DeFi sector this week, recording a 8.4% weekly gain. Early in the week, Aave received a significant boost as the Ethereum Foundation announced it had allocated 50,000 ETH (valued at $165 million) from its treasury to begin participating in the DeFi ecosystem. The foundation initiated its engagement with a test transaction on Aave’s lending protocol, using a newly established 3-of-5 multisig wallet. This move could bolster Aave's liquidity and strengthen its integration into the Ethereum ecosystem, signaling confidence in its long-term potential.

At the same time, Aave launched v3.2's Liquid eModes on Arbitrum and Base, introducing innovative DeFi primitives. The update allows users to utilize new collateral types, such as wstETH, while optimizing gas costs and enabling novel use cases. These advancements have the potential to drive user adoption and increase Aave’s total value locked (TVL). Reflecting this growth, DefiLlama reported that Aave’s TVL in ETH terms reached an all-time high of 6.53 million ETH on Monday, further underscoring the platform’s growing appeal in the DeFi landscape.

Crypto’s new year sprint, acquisitions and strategic investments

While 2025 has barely begun, deal flow is already gaining strong momentum. Prime broker FalconX kicked off 2025 with the acquisition of crypto derivatives trading firm Arbelos Markets for an undisclosed amount, marking one of the first major crypto deals of the year. FalconX’s co-founder and CEO, Raghu Yarlagadda, emphasized that this acquisition strengthens the firm’s position to deliver enhanced value to institutional clients by combining Arbelos’s derivatives trading expertise with FalconX’s balance sheet and “regulatory readiness”.

Stablecoin issuer Circle has acquired Hashnote, the issuer of the $1.3 billion tokenized money market fund USYC, as part of its push into yield-bearing collateral. The firm plans to integrate USYC with its flagship stablecoin, USDC, enabling seamless convertibility between cash and yield-bearing collateral across blockchains. Circle also announced a partnership with Cumberland, a DRW-affiliated crypto trading firm, to provide liquidity and facilitate settlements for USDC and USYC. This collaboration aims to expand USYC's use as collateral on exchanges and custodial platforms. Additionally, Circle plans to deploy USDC on the Canton Network, ensuring continuous liquidity between cash and collateral and enabling smooth transfers between decentralized and traditional markets. 

Phantom Wallet has raised $150 million in a Series C funding round, securing a $3 billion valuation, the company announced. The round was led by Sequoia Capital and Paradigm, with participation from a16z and Variant. Phantom now boasts 15 million monthly active users, $20 billion in annual swap volume and $25 billion in self-custody assets. In November, the crypto wallet app ranked ninth among the top free iPhone apps. This funding round stands as the largest in crypto for 2025 so far.

Komainu, a regulated crypto custodian backed by Laser Digital, has raised $75 million in strategic investment from Blockstream Capital Partners, pending regulatory approvals. The funding will support Komainu's international growth and integration of Blockstream's technologies to enhance its collateral management and tokenization services. Notably, the investment is made in bitcoin, with Komainu establishing its own bitcoin treasury. Blockstream's Liquid Network will enable Komainu to drastically reduce the time for its off-exchange margining and settlement solution, Komainu Connect, while Blockstream's AMP technology will automate asset support for tokenization and enable trustless trading. The integration of other Blockstream technologies will expand Komainu’s offerings to institutional clients with bank-grade digital asset services.

Sygnum Bank announced this week that it has raised $58 million in a strategic growth round, reaching Unicorn status with a post-money valuation exceeding $1 billion. The capital will be used to expand Sygnum’s product portfolio, with a particular focus on bitcoin technology. Tuesday’s announcement follows a $40 million interim close in a strategic funding round last January, led by Milan-based Azimut Holding, at a $900 million valuation. In its previous Series B round, which closed in January 2022, the crypto bank raised $90 million, with backing from several Asia-based investors, including Sun Hung Kai & Co., Animoca Brands, and SBI Holdings.

The market seems to be entering a phase where altcoins are closely tracking bitcoin’s beta, not just during downturns but also in rallies. Deal flow in the crypto space is gaining momentum, both in terms of volume and value, while crypto-related searches are trending on Google. The enthusiasm that we saw in previous bull years appears to be resurfacing, with that one friend in every group bragging about a massive memecoin win, convinced their crypto pals are making even bigger gains as they are glued to their screens all day.

Macro pulse 

Among TradFi assets, oil futures fell 4.2% compared to the previous week, while US equities hit a fresh all-time high, posting a weekly gain of 2.3%. The rally in US stocks was driven by tech and communication sectors, as investors welcomed Netflix's strong quarterly report and President Donald Trump's private-sector investment plan for artificial intelligence infrastructure. Meanwhile, the US dollar dipped 0.8%, 10-year US Treasury yields slipped by 4 bps, and the Gold and Silver Index rose 1.7% week on week.

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*^{Note: Weekly (7 calendar day) performance figures are as of 8am SGT on January 23, 2025} 

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