Comparing Risk & Leverage Dynamics In 2024 & 2025
The Daily Crypto Update for Institutional Investors
In this AM’s note we compare leverage & risk appetite in the crypto space between 2024 & 2025
Core leverage metrics indicate benign dynamics in 2025 compared to 2024: During the two years, the highest average daily BTC perp rate on Deribit was 71.73%, recorded in March 2024. This level was achieved on the back of strong US BTC ETF inflows, which had surprised many market commentators in their magnitude, and the asset breaking above its 2021 record high. BTC perp rates spiked again at the end of 2024, reaching 68.20% in December when BTC broke the psychologically significant price of USD 100,000 on the back of President Trump’s election win. Overall, BTC perp rates on Deribit averaged 10.24% in 2024, compared to 5.38% in 2025. Last year, the metric peaked early in the year, reaching 61.49% in January 2025. However, this January peak was more a spill-over from the year prior given that leverage dynamics in 2025 largely failed to materialize in the manner they did in 2024; outside of January, BTC perp rates on Deribit peaked in August, reaching 36.09%. Rolling BTC basis corroborates this view, with the metric reaching 33.94% in March 2024 and remaining below 10% for most of 2025. ETH perp rates on Deribit followed a relatively similar pattern, averaging 8.20% in 2024 and just 0.85% last year. It is also worth noting that perp rates in 2024 remained well below levels seen in 2021, when BTC and ETH rates on Deribit reached 190.25% and 184.88%, respectively.
Memecoins reached a record high market cap of 127.26B in December 2024: Memecoins emerged as the most retail-driven and speculative subsector of the crypto space in 2024. While estimates vary from source to source, CoinMarketCap.com shows the aggregate memecoin market cap reaching a record high in December 2024. Since then, the aggregate memecoin market cap has seen a decline of ~65%, reaching a current USD 44.19B. In December 2024, we described memecoins as ‘as an early candidate for this cycle’s ‘craze,’ similar to NFTs in 2021.’ However, memecoins in 2024 never reached the same magnitude of ‘craze’ as compared to NFTs. Google searches for ‘NFT’ in 2021 were magnitudes greater than recent all-time high searches for ‘memecoin’ or ‘memecoins.’ The fizzling out of memecoins in late 2024 corroborates the limited demand for retail-driven risk and excess in 2025.
Google searches for key crypto terms show mixed results when compared 2024 to 2025, but remain significantly below levels seen in 2021: Google search volumes for crypto key words are often cited as a proxy for retail interest in digital assets. In turn, retail trading is often associated with the demand for leverage. In 2024, global Google searches for ‘bitcoin’ reached a record high in November. In 2025, searches peaked in November as well, corresponding to BTC’s sell-off to USD ~80,000. Google searches for ‘crypto’ reached their highest level in 2024 and 2025 in August of last year. This spike corresponds to the SEC announcing ‘Project Crypto,’ a widespread regulatory effort to ‘enable America’s financial markets to move on-chain.’ While search volumes for ‘crypto’ and ‘bitcoin’ varied in timing in 2024 and 2025, both remained below levels seen in 2021. Google searches for BTC in November 2021, for instance, were 65% of levels seen in 2021.
CRYPTO HEADLINES
The US Senate Agriculture and Banking Committees are scheduled to hold markup hearings on digital asset regulation legislation on January 15. Draft bills differ on regulatory jurisdiction and stablecoin treatment. If passed, reconciled versions are expected to advance to a full Senate vote. - link - @TheBlock
Florida lawmakers revived a proposal to create a state-managed cryptocurrency reserve fund. The proposal would give the state’s CFO discretion to invest in BTC under risk controls and independent audits, potentially joining states like New Hampshire and Texas. - link - @CoinDesk
World Liberty Financial has applied for a US national trust bank charter to focus on stablecoin operations, including issuing USD1. The application is described as potentially advancing crypto integration into traditional banking, but the bid has drawn political scrutiny over Trump’s involvement. - link - @YahooFinance
Fireblocks acquired TRES Finance, an Israeli startup focused on crypto accounting and financial controls. Fortune reported the transaction is a combination of cash and equity valued at USD 130M. TRES will continue standalone operations with integration support. - link - @Fireblocks
All employees of Electric Coin Company (ECC), developer of privacy-focused blockchain ZEC, resigned, following disagreements with its parent Bootstrap’s board. CEO Josh Swihart stated the dispute involved board members and described it as constructive discharge. ZEC’s protocol operations are described as unaffected, while the former ECC team forms a new company to focus on the project. - link - @TheBlock
Polymarket has signed an exclusive deal with Dow Jones Media to display prediction market data online and in print, including outlets like the Wall Street Journal. Polymarket, built on the Polygon network, recently recorded a USD 9B valuation and announced upcoming housing markets and plans for a POLY token. - link - @TheBlock
YZi Labs, backed by Binance founder Changpeng Zhao, has challenged CEA Industries’ (NASDAQ: BNC) adoption of a shareholder rights plan and bylaw amendments. YZi Labs claims these moves restrict shareholder rights and entrench the board. YZi is seeking board changes while CEA maintains these steps protect shareholders. - link - @Cointelegraph
Wyoming announced its Frontier Stable Token, the first US state-issued stablecoin, is now available to the public. The token is backed by cash and US Treasuries, managed by Franklin Templeton, and distributed via Kraken. Yield features remain under consideration, and net revenue will fund Wyoming’s School Foundation Fund. - link - @Decrypt
TOP ARTICLES
Barron’s: Bitcoin, XRP Fall. BlackRock ETF Suffers Big Outflow as Crypto Rebound Dies.
FT: Stablecoins could shake up global payments — but not with technology
Bloomberg: White House Weighs First Democratic Nominees for CFTC
OPEN-SOURCE RESEARCH / LONG-READ OF THE DAY
Crypto Crime Reaches Record High in 2025 as Nation‑State Sanctions Evasion Moves On‑Chain at Scale, Chainalysis, January 7, 2026
Chainalysis discuses the illicit use of crypto in 2025.
CRYPTO MULTIMEDIA
How Helium is Building The Largest Decentralized Mobile Network From Airports To AT&T , Crypto In America, January 7, 2026
Amir Haleem, the founder and CEO of Helium, discusses the project and its ambitions.
CHART OF THE DAY
About FRNT Financial
FRNT is a digital asset investment bank offering capital markets and advisory services to institutional investors participating in or entering the space. The Company aims to bridge the worlds of traditional and web-based finances with a technology forward and compliant operation. Business lines include deliverable trading services, structured derivative products, merchant banking, advisory, consulting, lending origination and principal investments. Headquartered in Toronto, FRNT was co-founded in 2018 by CEO Stéphane Ouellette.