I. Attention Value - Market Highlights

1. Market Trends

(1) Macroeconomic Environment:

l Resignation of Federal Reserve Vice Chair Barr: Victory for Big Banks and Future Regulatory Challenges

Jaret Seiberg of the TD Cowen Washington Research Group pointed out that the resignation of Federal Reserve Vice Chair Michael Barr "does not mean that big banks have won as it may appear on the surface".

In a report released on January 6th, Seiberg emphasized that with the Democrats still in the majority at the Federal Reserve Board, it will be difficult to make substantial progress in relaxing regulations until the confirmation of new regulatory officials in early 2026.

Barr had been a proponent of regulating stablecoins, stating that stablecoins "rely on the trust of central banks", and the Federal Reserve wants to ensure that any issuance of stablecoins is done within an appropriate federal regulatory framework to prevent threats to financial stability and the integrity of the payment system. This stance is part of efforts to enact stablecoin regulation legislation, but challenges remain in how to effectively allocate regulatory powers between state and federal authorities.

Barr announced that he will resign from his position as Vice Chair of Supervision on February 28, 2025, but stated that he will continue to serve as a Federal Reserve Governor and will not participate in the development of major rules until the confirmation of a new Vice Chair. He mentioned that the controversy surrounding his position could distract the Federal Reserve's attention.

(2) Web3 Sector:

l Arthur Hayes Predicts Crypto Market to Peak in Mid-March 2025 and Face Correction

BitMEX co-founder Arthur Hayes, in his latest article, analyzed the US dollar liquidity environment in the first quarter of 2025 and its potential impact on the crypto market. He predicts that the crypto market will reach a peak in mid-March and then experience a significant correction.

According to his analysis, approximately $612 billion in liquidity is expected to be injected in the first quarter, primarily due to the decline in the Federal Reserve's reverse repo tool balance and the release of funds from the Treasury General Account, which will provide support for Bitcoin and other assets. However, Hayes also pointed out that the Federal Reserve's quantitative tightening policy will lead to a reduction of about $180 billion in liquidity. Additionally, the debt ceiling issue may cause liquidity changes in the second quarter. The Treasury Department is expected to use funds from the Treasury General Account to pay government expenses between May and June, which will force it to raise the debt ceiling, negatively impacting liquidity. Furthermore, tax season peaks (such as mid-April) will further suppress market liquidity. Despite the various macroeconomic factors, the flows of the reverse repo tool and the Treasury General Account have a relatively clear impact on the market. Therefore, Hayes expects the market to see a short-term peak at the end of the first quarter, followed by a potential adjustment period.

2. Trending Events

(1) Macroeconomic Environment:

l The US to Introduce Up to 20 State-Level "Strategic Bitcoin Reserve" Bills

According to Satoshi Action Fund co-founder Dennis Porter, the US will have up to 20 "Strategic Bitcoin Reserve" bills introduced at the state level, with some states potentially launching multiple bills. Lawmakers are in a fierce race to be the pioneers of this historic initiative. Most of these bills will be based on the Strategic Bitcoin Reserve (SBR) model proposed by the Satoshi Action Fund. Porter also mentioned that the 14th state is now preparing to introduce relevant legislation, indicating the states' proactive attitude towards incorporating Bitcoin into fiscal policy.

(2) Web3 Sector:

l Nasdaq Applies to Increase BlackRock Spot Bitcoin ETF (IBIT) Position Limit to 250,000 Shares

It is reported that Nasdaq has submitted an application to the US Securities and Exchange Commission (SEC) to increase the position limit of the BlackRock Spot Bitcoin ETF (IBIT) from 25,000 shares to 250,000 shares. The approval of this application will allow a single investor or institution to hold more shares of this ETF to meet the growing market demand. The head of Bitwise Alpha Strategies stated that considering the continued increase in trading volume of this ETF, the position limit should be raised to at least 400,000 shares to be reasonable. Nasdaq and BlackRock's requests are considered well-founded, but ultimately require SEC approval to take effect.

3. Trending Narratives

According to official information, Virtuals Protocol and Sovrun are collaborating to establish a joint venture called "ReadyGamer" that will focus on integrating artificial intelligence with gaming to redefine the gaming experience.

"ReadyGamer" will be dedicated to developing AI-based gaming experiences, utilizing technology supported by the GAME framework, with the aim of enhancing player interactivity and immersion. By integrating advanced AI technology, this joint venture hopes to create more personalized and dynamically responsive gaming environments, allowing players to enjoy richer and more diverse gaming experiences.

As a result of this news, the SOVRN token has surged over 170% in 24 hours, reflecting the market's positive outlook on the ReadyGamer project and investors' recognition of the potential of the integration of AI and gaming.

II. Attention Value - Trending Projects

1. Project Introduction

l $mearth | AI | @MiddleearthAI