Crypto Market Weekly Report: Decentralized Finance and AI Sectors Lead Market Recovery

Market Overview

This week, the crypto market has shown a significant warming trend, with the sentiment index rising from 11% to 35%. Although it is still in the panic zone, there has been a notable improvement. The market capitalization of stablecoins continues to grow, indicating that institutional funds are still entering the market. The warming of the market is mainly driven by two factors: the US CPI data meeting expectations and the optimistic expectation that Trump may relax crypto regulations if he wins. Altcoins overall have performed better than the market, especially DeFi and AI-related tokens, which have seen significant increases, indicating a trend of funds starting to shift from Bitcoin to small-cap tokens.

The TVL of the DeFi sector has increased slightly to $53.5 billion, with a month-on-month growth of about 1%. It is worth noting that DeFAI, as a combination of Decentralized Finance and AI, has seen its market value surge from $600 million to $3.2 billion within a week, demonstrating the market's strong demand for innovative DeFi applications.

The AI Agent sector continues the strong development trend since the end of last year, shifting from pure AI token trading to deeper application scenario development. The rise of DeFAI marks the entry of AI applications in the crypto field into the 2.0 stage, mainly reflected in four directions: user-friendly AI interfaces, portfolio management, infrastructure construction, and market analysis and prediction. Leading projects such as Griffain, Anon, and AXIBT show that the market is transitioning from the proof-of-concept stage to the actual application stage.

The performance of the Meme coin sector has been relatively flat this week, with market attention significantly retreating from the highs of the fourth quarter of last year. This indicates that investors' risk appetite is shifting from purely speculative Meme tokens to projects with practical application scenarios. However, as discussions related to Trump heat up, the market anticipates a new wave of Meme coin speculation centered around political themes.

Layer 1 public chains are showing a stable upward trend overall, but the growth is not as pronounced as that of the Decentralized Finance and AI sectors. Among mainstream public chains, those with advantages in AI and Decentralized Finance ecosystems perform better, reflecting that the value of underlying public chains increasingly relies on the prosperity of their upper-layer application ecosystems. It is noteworthy that public chains supporting AI computation are starting to attract market attention, indicating that a new round of competition among public chains may revolve around AI computing capabilities.

Hot Tracks

Decentralized Finance AI

DeFAI has become the focus of the market this week, with its market capitalization soaring from $600 million to $3.2 billion, achieving more than a fourfold increase within a week. The DeFAI project mainly consists of four categories: user-friendly AI interfaces, portfolio management, infrastructure development, and market analysis and prediction. Representative projects include Griffain, Anon, and AXIBT. Although DeFAI is developing rapidly, most projects are still in the proof-of-concept stage, so it is essential to pay attention to the actual implementation when investing and be wary of market speculation risks.

Decentralized Finance赛道

The top five projects by TVL growth are Folks Finance, Beets, AlphaFi, Echelon Market, and Astherus. These projects mainly focus on money market pools and liquidity management, reflecting the rising demand in the market for highly efficient capital management tools.

public chain performance

The public chains with significant TVL growth over the past week include Sonic, Hyperliquid, Algorand, BSquared, and Mode. These public chains have made notable progress in the DeFi ecosystem, cross-chain capabilities, and AI integration, reflecting the trend of public chains evolving into comprehensive platforms.

Market Sentiment and Outlook

The short-term market will be affected by the Federal Reserve's January interest rate meeting and Trump's inauguration, with increased volatility expected. Investors are advised to focus on projects with existing practical application scenarios when selecting DeFi projects, avoiding the pursuit of purely conceptual speculation. In terms of DeFi investment, attention can be given to yield opportunities in gun pool projects, but strict control of leverage risk is necessary. Regarding timing, it is recommended to observe the policy changes brought about by Trump's inauguration in the short term, avoiding blind chasing of highs to ensure the safety of the investment portfolio.

Important Events Next Week

• January 20: Trump is sworn in as President of the United States; SEC Chair Gary Gensler and CFTC Chair Rostin Behnam step down.
• January 22: WAGMI 2025 event
• January 23: U.S. Initial Jobless Claims for the week released.

The market expects that Trump's inauguration speech may involve encryption currency policies, which will become a key factor influencing short-term market trends. Investors should closely monitor policy developments while remaining cautious and managing risks.