January 22, 2025

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Hi readers,

In today's newsletter, Joshua de Vos of CoinDesk and CCData brings us a post-inauguration analysis of the new reality facing the crypto industry and questions whether this is a long-term shift, or just a temporary response.

Then, Jennifer Murphy of Runa Digital Assets tells usd all about AI agents and how they are poised to redefine talent in the crypto space.

Thanks for joining us.

– Alexandra Levis

From the Analyst

Inauguration Edition: A New Reality

The election of Donald Trump promises a new era for digital assets characterized by greater regulatory certainty and a surge in market activity. The question now is whether this shift is sustainable, or a temporary reaction to the political climate.

According to CCData's latest Exchange Review report, aggregated spot and derivatives volumes, the most common measure evaluated for market participation, recorded a new yearly high in 2024, greatly exceeding the previous record set in 2021 ($75 trillion vs $64 trillion). With the election driving market activity and speculation, November and December were both record-breaking months for volumes, with $10.51 trillion and $11.31 trillion in monthly volumes, respectively. For context, the 2024 average (the biggest year on record) was roughly $6.4 trillion.

Concurrently, stablecoins reached a total market cap of $210.1 billion, its highest ever point, on inauguration day, according to DeFiLlama. This reflects a YTD increase of 3.3% thus far, on the back of improved liquidity conditions across both centralized and decentralized exchanges, supporting the influx of fresh volumes seen in the last few months.

Assets "made in the USA" have been doing particularly well. These have been an outlier since the election, where a permissive regulatory environment, and the promise of more favourable conditions for US-based assets, have generated significant investor interest and speculation. Coins such as XRP, SOL, XLM and ALGO, which have a strong U.S.- affiliation, have seen outsized returns. Per CCData, the basket associated with these coins is up over 360%, outpacing the market by a sizeable margin. This marks an about-turn from the previous administration's regulatory clampdown, which kept these under scrutiny for many years as they were ultimately deemed securities by the SEC.

Whether this unprecedented growth continues will depend heavily on the new Trump administration's execution of its promises on a Strategic Bitcoin Reserve, incentives for domestic bitcoin mining, and other issues. The broader market may also benefit as we enter into the expansionary phase of the bitcoin four-year historical cycle, which tends to see explosive growth in the final year.

It will be interesting to see whether this new administration will impact the market cycles to which the cryptocurrency sector has grown accustomed, or whether it will mark a significant departure from historical trends.

- Joshua de Vos, research lead, CoinDesk and CCData

Institutional Outlook

That New Sports Betting Guy You Like May Be An (AI) Agent

It's Thursday, Jan. 16 and sports betting influencer Liam (@bets_liam) has just reviewed the latest "NFL Divisional Round Bets" from The Favorites Podcast, an NFL sports betting show with 70,000+ subscribers.

Liam takes to X and tweets his reactions:

The twist? He's an AI agent powered by Memetica.ai, a no code AI agent consumer platform built by the team at Qstar Labs.

AI agents are materially different from chatbots and ChatGPT. Agents use large language models as a foundation but add new information like real time data, news, and specialized knowledge. They can also bring memory, logic, and the ability to iterate and carry out a plan. Agents can, for example, monitor consumer products news, social media and buying data to summarize key trends and post them in a blog. They can learn from feedback to improve engagement. This means agents like Liam can act on their own and evolve.

AI agents represent such a material extension of AI capabilities that they have recently become a dominant narrative in crypto.

It all started in July 2024 when Marc Andreessen, co-founder of venture capital firm Andreessen Horowitz (a16z), gifted a quirky, X-happy AI agent called Terminal of Truths $50,000 worth of bitcoin as a research grant. Terminal of Truths, basking in Andreessen's attention, began shilling its favorite memecoins on X, driving one token to over $300 million in market cap in a matter of days.

What happened next demonstrates crypto's power to draw in capital and talent at lightning speed.

In October 2024, AI agent platform Virtuals launched on Coinbase's Base protocol, allowing users to quickly create unique agents with specialized capabilities, personalities, and tradeable tokens. Now, more than 15,000 agents with tokens have been created. The most successful is a crypto research agent named aixbt, which has 400,000 followers on X and a token with a market capitalization of $650 million.

That same month, veteran developer Shaw introduced an AI agent framework called ElizaOS. Using Eliza, he launched agent ai16z (a tongue in cheek reference to Andresseen's firm), an investment DAO (decentralized autonomous organization) touted as the "first AI hedge fund." By the end of 2024, the ai16z token's market capitalization had grown to over $1 billion despite having assets under management of a little over $25 million.

So, where to from here? Nvidia CEO Jensen Huang recently described AI agents as "a digital workforce" and predicted "...the IT department of every company is going to be the HR department of AI agents in the future." In Multicoin Capital's Frontier Ideas for 2025, managing director Kyle Samani envisions "Zero-Employee Companies" staffed entirely by AI agents and governed by DAOs.

But perhaps the most tangible vision comes from the ElizaOS team, which just announced a humanoid robot based on ai16z's Eliza mascot, a "state-of-the-art personal companion (that) seamlessly integrates AI, blockchain technology, and advanced robotics."

I'd say this AI Agent has legs.

As of January 22, 2025, accounts managed by the author's firm held positions in the Virtuals token; this is subject to change at any time.