NODO Weekly: Bitcoin, AI Agents, and Solana’s Inflation Shift

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Every two weeks, we send a research-driven market update covering the most important charts, trends, and themes shaping crypto and investing.

This newsletter distills key on-chain insights, price action, and macro narratives into a digestible format, helping you stay ahead of major market shifts. Expect deep dives unpacking what’s moving the market and why it matters.

If you're an investor, trader, or just crypto-curious, this is your go-to resource for data-backed analysis without the noise.

This week, we analyze Bitcoin’s tightening range and the looming volatility expansion that could send prices soaring—or crashing. We also dive into the sharp decline in AI agent launches on Virtuals and what it signals for the sector. On Solana, we break down SIMD-0096’s impact on tokenomics and how upcoming proposals could reshape staking rewards. Let’s get into it.

1. The Calm Before the Storm

BTC has been range-bound for three months, an outcome few expected post-election, especially with the first "Bitcoin president" in office. A month after his swearing-in and BTC’s $109K all-time high, we're still -13% below the peak.

Despite sideways price action, volatility has steadily declined, now back to last summer’s levels. Historically, volatility contraction precedes expansion, meaning an explosive move is likely—direction unknown.

Looking at past trends, the last major contraction led to a breakout, so there’s reason to stay cautiously optimistic.

BTC is stuck in no man’s land, with a massive liquidation cluster between $99K–$100K and even larger levels between $97K–$95K. There’s no clear catalyst in either direction, meaning both bulls and bears are left guessing. But one thing is certain—the next move will be explosive. Hopefully, it’s up only.

For some hopium, we’re approaching the infamous "banana zone"—historically where generational wealth is made. But this cycle is already different: ETF inflows, dispersion, no alt season. With BTC at a $2T market cap, a 3x–4x from here would mean a $12T–$14T market cap and $600K–$800K BTC.

Not happening in a few months, a year, or even this cycle. This time really might be different.

2. The AI Agent Barometer

The number of AI agents launched on Virtuals has plunged to 80–200 per week, a far cry from its 1,200 peak in December. This is the lowest point since the AI agent craze began in November.

Crypto follows fractal patterns—hype leads to parabolic growth, then an inevitable decline. We saw this with Pumpfun last year: dips were buying opportunities, and calling the top was a losing trade. Virtuals, positioned as Pumpfun for AI agents, should theoretically follow the same pattern.

But this time, it’s different. Virtuals’ January rebound only hit 300 agents—a lower high—before falling even further to 80, forming a weaker price structure than Pumpfun, which rebounded to new highs. If history is any guide, Virtuals need a stronger catalyst to reignite momentum. Otherwise, the AI agent meta might be running out of steam.

The Virtuals token ($VIRTUALS) is down -76% from its $5.2B peak in January, raising questions about whether its price is dragging down AI agent activity on the platform. The initial boom in AI agents coincided with Virtuals' price surge, attracting users eager to capitalize on the trend. Now, with the token in a deep drawdown, many of those “tourists” have likely exited.

This differs from Pumpfun, which never had a token—its growth and resilience were purely driven by user enthusiasm. With Virtuals, however, it’s a chicken-and-egg scenario: did demand for AI agents pump the token, or did the token pump drive AI agent creation?

Given crypto’s history, price drives narratives, not the other way around. If $VIRTUALS fails to recover, the AI agent meta could face headwinds in regaining momentum—but it’s not out of the game just yet.

Price is the first point of connection for most users—it's what drives attention, speculation, and ultimately adoption. Virtuals ($VIRTUALS) is the largest and first AI agent platform, making it the poster child of the narrative. If the AI agent trend is to resurge, tracking Virtuals' performance is key.

Historically, tokens that drop -80% or more rarely reclaim new ATHs. It’s not impossible—Doge, ADA, XRP have done it—but it took years and required an even bigger catalyst than the initial narrative that fueled the first run. Without such an external force, Virtuals—and by extension, the AI agent sector—could remain in a state of prolonged stagnation rather than a full revival.

3. Shift in Economic Incentives

It’s been over a week since SIMD-0096 went live, bringing a fundamental change to Solana’s fee structure. Previously, priority fees were split 50/50 between validators and a burn mechanism—but now, validators receive 100%.

Key Changes:

• SOL annualized inflation increased from 3.6% → 4.7%.

• Daily SOL issuance rose from 76,500 → 77,650, while daily burns collapsed from 17,700 → 1,000.

 Impact on Token Holders & Validators:

Before SIMD-0096:

• Token Holders: 67% of network revenue

• Validators: 30%

After SIMD-0096:

• Token Holders: 46%

• Validators: 51%

This shift redirects a significant portion of network revenue from token holders to validators. Soon, validators will be able to distribute priority fees to stakers using Jito’s TipRouter, further reshaping Solana’s staking dynamics.

SIMD-0123 will introduce an in-protocol mechanism to share priority fees with stakers, addressing concerns raised during SIMD-0096. Currently, priority fee revenue flowed entirely to validators, creating a principal-agent problem where stakers received no direct benefits.

This proposal ensures that stakers, not just validators, benefit from priority fee revenue, potentially mitigating concerns about higher net inflation and the reduced burn rate introduced by SIMD-0096. The goal is to create a more balanced and sustainable economic model for Solana’s network participants.

Meanwhile, SIMD-0228 proposes reforming SOL’s inflation model, shifting from a fixed emission schedule to a dynamic rate that adjusts based on a target staking ratio. This would make Solana’s inflation more responsive to network conditions, aligning incentives across the ecosystem.

SIMD-0228 proposes shifting Solana’s token issuance model from a fixed schedule—which started at 8% and gradually declines to 1.5%—to a dynamic system tied to staking participation.

• The proposal sets a target staking rate of 50% of the total SOL supply.

• If staking falls below 50%, issuance increases to incentivize more staking and strengthen network security.

• If staking exceeds 50%, issuance decreases, potentially dropping as low as 0% if participation is high enough.

Adjustments occur per epoch using a formula:

Change in issuance rate = 0.05 × (Target Staking Rate - Actual Staking Rate).

With current staking at 65-70% and inflation at 4.7%, this could significantly reduce new SOL issuance, possibly by ~1% annually under current conditions.

While SIMD-0096 increased validator rewards and net inflation, SIMD-0228 offers a counterbalance by cutting issuance, addressing concerns from holders and stakers left out of SIMD-0096’s benefits.

Written by Pascal Abams — Research Analyst at NODO. I research on-chain trends, market narratives, and investment opportunities in crypto. If you have thoughts, insights, or just want to connect—reach out.

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Disclaimer

This newsletter is for informational purposes only. It does not constitute financial advice. Crypto investments carry high risk; always conduct thorough research.

Here’s to a groundbreaking 2025🧡
The NODO Team

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