- Buy Crypto
- Markets
- Futures
- Spot
- Copy Trade
WE-Launch
Tako Weekly Founder Special Guest: Ethos Network Co-founder Serpin Taxt
Original Title: "Tako Founders Club Weekly Founder Invites | Ethos Network Co-founder Serpin Taxt"
Original Source: Tako Protocol
Editor's Note: To provide users with direct access to Alpha founders, Tako recently established the Founders Club. This is a community platform where founders can interact, share insights, and build deep connections. Additionally, it offers users interested in new and trending projects the opportunity to engage in direct conversations with founders.
The inaugural Tako Founders Club event featured Serpin Taxt, Co-founder of Ethos Network, as the guest speaker. Below is the transcript of this AMA:
Last week, we held our first "Founder Fireside Chat," featuring Serpin Taxt, Co-founder of Ethos Network, as the guest speaker. The event was hosted by Julie.
The event covered the following topics:
· Ethos Story
· Ethos Product
· Comparison to Twitter
· Ethos Growth
· Trust Graph
· Ethos Vision
· Ethos Use Cases
· Why Base?
· Role of XPs
· Ethos Roadmap
· Founder Insights
· High Tech High Life
· Additional Community Questions
Ethos Story
Q1
Julie: I've listened to all the podcasts you've participated in. You mentioned that in 2011, when the price of Bitcoin was between $13 and $30, you thought, "I would never buy into this." Many people have had a similar experience! What eventually changed your view of cryptocurrency? And how did you step by step towards the founding of Ethos?
Serpin Taxt: When I saw that Ethereum provided a "universal API" that everyone could agree on, I felt there was a huge opportunity here. In centralized networks, it has always been difficult to seamlessly interconnect the APIs of various products, but Ethereum's smart contracts are like giving everyone a common "language."
To be honest, it wasn't until 2020 that I truly understood the potential behind smart contracts. Since then, I have realized that putting everything on-chain is quite aesthetic, which directly led to our insistence on the "on-chain first" principle at Ethos.
Q2
Julie: You mentioned that the crypto industry loses $90 billion to fraud and scams each year, which is truly staggering! At what moment did you realize, "I am going to solve this problem"?
Serpin Taxt: friend tech is a very illustrative example that made me realize: the solution to the problem has actually been there all along, such as Proof of Stake (PoS), but we replaced "machine nodes" with "people" for validation. When I saw that it could work on a small scale in friend tech, I immediately understood that this was a viable path.
Q3
Tako user: @nosir How did you meet your co-founder? How did you initially secure funding? After raising $2 million, do you plan to continue fundraising?
Serpin Taxt: Ben and I met while working at Atlassian. We got to know each other while working on a new product called Beacon at their incubator, which was later renamed "Atlassian Guard."
Ethos Product Mechanism
Q1
Julie: Many people are not familiar with Ethos's on-chain reputation system. Can you explain it briefly? How can users enhance their reputation on the platform?
Serpin Taxt: We have many mechanisms, but in simple terms, they include:
· Who invited you
· Others' opinion of you (positive, negative, neutral)
· Whether someone has actually vouched for you with ETH
· Your account background (Twitter, ETH wallet history, etc.)
· Whether you have been slashed
These are the main factors for calculating the score.
Q2
Tako user: @zhaixingxing Reputation score is linked to user interactions, likes, etc. If a group of acquaintances intentionally colludes to boost scores, wouldn't that be a problem? Do you have any preventive measures?
Serpin Taxt: We do not engage in centralized audits; this is precisely Ethos' trait: everyone is part of social validation. To address misuse, we mainly rely on the 'down vote' and 'slash' mechanisms to maintain balance. This is a valid concern that we often discuss.
You can read this very long tweet to learn more:
https://x.com/ethos_network/status/1895015992134447386
In short, we must guard against such issues without reverting to centralized review, so we heavily rely on Ethos' own mechanisms.
Q3
Tako user: @zhaixingxing Mechanisms like voting and slashing require ETH staking. So, if someone excessively slashes others, will it disrupt system stability?
Serpin Taxt: We currently have some rules: the same person can only slash once within 10 days, and the person being slashed can also only be slashed once every 10 days.
These regulations are still being refined and are not set in stone. Most importantly, everything is recorded on the chain—if you abuse slashing, you are actually risking harming your own social capital. How will others view you if you keep falsely accusing others every day? They might retaliate by slashing you instead.
Q4
Tako user: @sheabao Your invitation system tied to a 90-day period is quite interesting. Why was it designed this way? Have there been any unexpected phenomena in actual operation?
Serpin Taxt: The main reason is to prevent Sybil attacks and encourage everyone to be more cautious when inviting new people. Sometimes, users may feel a headache: afraid that if they invite the wrong person, it will drag down their scores.
Actually, don't overthink it, just invite people you trust. Some people look back and complain, "The person I invited didn't do anything and my score didn't change at all, it feels like a waste," but I think everyone is paying too much attention to this.
Q5
Tako user: @johndoe0505 You have adopted the "slashing" concept from PoS, saying "This is a social-level slash that can greatly damage someone's reputation." How is it actually working?
Serpin Taxt: So far, it seems quite interesting. Most people are still not used to openly calling out who has "crossed the line," but there have been some cases (including a slash I made today), which have sparked quite a bit of positive discussion.
The purpose of a slash is to prompt everyone to discuss and reach a consensus: whether this person has done something out of bounds, such as a rug pull, or like today, spamming with meaningless comments.
https://app.ethos.network/activity/slash/21/abusing-ethos-review-system-with-ai-generated-reviews-for-others
Q6
Tako user: @noahblake I still can't figure out why some people are willing to continue using money to support/challenge others. Isn't this behavior very infrequent? Is this a feature with real market value?
Serpin Taxt: To become a "trusted" individual, you need to cooperate and endorse each other.
Although DeFi yields are not available yet, we are taking a PoS model approach. It was indeed challenging to convince people early on that "in the future, you will stake ETH to secure the network," but at some point, everyone will do it for the security of the "social layer."
Comparison to X
Q1
Julie: You mentioned that Twitter rewards "attention," while Ethos rewards "reputation." How will these two approaches coexist in social media?
Serpin Taxt: That's a good question and often a point of confusion. Influence = Attention + Reputation. Some may earn attention through fake news or sensationalism but may not have a good reputation. In the crypto space, currently, it's only about who can grab more eyeballs, not measuring "trustworthiness." In the long run, this kind of attention can easily be manipulated by malicious actors.
This article provides further insights:
https://www.ethos.network/post/credibility-is-cheap-in-web3
Q2
Tako user: @edisonchen agrees with @serpintaxt on the effective influence = attention + reputation equation because without reputation, consensus cannot be achieved. Ethos Network has crafted its product well. You can give a person an evaluation, and you can also stake ETH to endorse your friend (conversely, if you are sure this person has done something wrong, you can stake real money to expose him, indicating that you are not making baseless claims). I am sure that in a new type of social network like @tako, ethos as a reputation infrastructure is necessary. I have a question; how do you think tako can integrate ethos's reputation data and scenarios?
Serpin Taxt: In Tako, you can see who is trending, but it would be more intuitive if you could hover over the person's profile to see their reviews and credibility directly. This is crucial for activities like OTC trading, private sales, etc. Further integration is also possible, such as leaving a comment and storing it in the person's profile. Ultimately, knowing whether someone is trustworthy or not is valuable on any platform.
Q3
Tako User: @johndoe0505 You mentioned that "attention can be hacked," and we have also seen bot farming, extreme topics, fake engagement, and more. Which metrics on Ethos are the least susceptible to manipulation? Has anyone tried exploiting loopholes yet?
Serpin Taxt: Currently, the invite system should be the most cheat-proof. In the future, the entire score will require investment of time and money (e.g., someone using ETH to endorse you) to increase. However, only after launch and observing real data and social behavior, we gradually understand where improvements are needed.
Ethos Growth Strategy
Q1
Julie: I know you have many growth ideas. What are the key growth metrics you are focusing on right now?
Serpin Taxt: I have previously taken a product from 30,000 to 3 million users. The most important thing is not to let the "funnel" leak in vain: in Web3, attention is very precious, once it's gone, it's unlikely to come back. I use the "AAARRR" or "Pirate Metrics" framework: Awareness, Acquisition, Activation, Retention, Revenue, Referral.
We also look at:
· DAU/MAU, currently around 55%
· 7-day retention at 27%
· K-factor approximately 3.5
Q2
Julie: You mentioned that in this bull-bear cycle, many people have abandoned "projects" and "roadmaps" and only focus on hype and speculation. How do you create something meaningful in this environment? Do you see this as an opportunity or a challenge?
Serpin Taxt: The problem is that most projects have not actually solved real-world problems. You can ask yourself, "If this product is taken away, would I feel uncomfortable?" If the answer is "yes," then it does have value. I believe the market will eventually return to valuing the focus on "problem-solving."
Q3
Tako user: @0xdealerbao Are you focusing on expanding developers/contracts first or expanding users first? When is the right time to shift towards more contract work?
Serpin Taxt: Developing contracts is time-consuming and costly... Currently, we are focusing on expanding our user base. When we feel the time is right, we will proceed with major upgrades.
Q4
Tako user: @tamagotchi I see you even invited @jessepollak. Are there any other noteworthy users you'd like to mention?
Serpin Taxt: We have many influencers, but what I find most appealing about Ethos is that you don't need to be famous; you can build reputation based on real actions. I'm actually thinking about inviting ZachXBT next, haha.
Trust Graph
Q1
Julie: You mentioned "We are collecting a very new set of data: who trusts whom." How do you think this trust graph will evolve and what can it bring in the future?
Serpin Taxt: In crypto, every interaction carries an economic factor, so "who trusts whom" is particularly important. For example, checking an influencer's background, looking at a founder's reputation among peers, observing a group of wallets that trust each other to see if they are all buying the same thing... It's still early, but the potential is enormous.
Q2
Tako user: @javaw.eth Each scenario may correspond to different metrics. Which use case will you focus on in the near future?
Serpin Taxt: We don't look at metrics like "fan quality" or "transaction records" because they do not reflect a person's character. We primarily rely on on-chain reputation data within Ethos.
Ethos Vision
Q1
Julie: In your podcast, you mentioned the "centralization vs. decentralization pendulum." What will be the next swing? What role does Ethos play in this?
Serpin Taxt: Ethos has always aimed to lead with decentralization. As we continue to find product-market fit, we will further decentralize to make the system more stable and resilient to interference.
Q2
Tako user: @whalepizs How can genuine contributors receive positive rewards rather than allowing resource-rich individuals to take advantage?
Serpin Taxt: Having resources may indeed make it easier to gain fame, but reputation is not a zero-sum game where your high status means my low status. We aim to raise the overall threshold to make it harder for bots and fake accounts to infiltrate.
Ethos Use Cases
Q1
Julie: We have discussed many ideas about applying Ethos to social networks. How do you think it will play a role in DeFi, NFTs, or other on-chain activities in the future?
Serpin Taxt: If everyone transacts with a public identity, it adds an extra layer of "credit insurance." For example, OpenSea can only see who bought what but doesn't know the person's history. With Ethos, this gap can be filled.
Q2
Tako user: @gink In scenarios like uncollateralized lending, how do you think Ethos can expand its reach?
Serpin Taxt: Ethos can encourage people to value their social reputation, but uncollateralized lending is quite challenging and requires more support. If a protocol can track defaulters and maintain a negative record on the chain, it can better incentivize accountability.
Q3
Tako User: @whalepizs Looking ahead, how do you plan to integrate Ethos Score with other projects on Base to collectively enhance on-chain trust?
Serpin Taxt: We aim for the Ethos Score to be ubiquitous — usable in project launches, lending rates, VC due diligence, OTC trades, and more.
Why Base?
Q1
Julie: Tako and I have been nurturing the Base ecosystem for almost a year and a half. Why did you choose to build Ethos on Base?
Serpin Taxt: My co-founder and I sat down and thought, "Which L2 is most likely to stand tall in 5 years?" The answer was clear. Without Base/L2, Ethos's high-frequency on-chain demands couldn't be met.
Q2
Tako User: @sheabao How has your experience been with Base? What support have they provided? Has it been helpful for your market expansion?
Serpin Taxt: Frankly, if you don't have a close relationship with the Base team, you have to deliver something first to show them results. Once you have user traction, they are very supportive.
Role of XPs
Q1
Julie: What is the role of "XP" in Ethos? What can the community do if they want to help or contribute?
Serpin Taxt: XPs are somewhat like Reddit's "karma." They are recognition for active contributors and also help us explore how to incentivize everyone.
Ethos Roadmap
Q1
Julie: What new features or upgrades does Ethos have in store? By 2025, what level of achievement are you aiming for?
Serpin Taxt: In the near term, we may work on a leaderboard, data analysis, improving Slash, and also ethos.markets. We might consider trying out zkReviews or anonymous reviews, but it's not yet certain if they can truly help assess reputation. I usually only disclose a brief roadmap publicly, as post-launch, we often need to adapt flexibly to various situations.
Q2
Tako User: @johndoe Regarding anonymous reviews, why do you think anonymity is necessary?
Serpin Taxt: I'm not sure if it can enhance trustworthiness judgment; perhaps there are other ways to substitute for anonymity.
Q3
Tako User: @babyyyyyy What is the current size of your team? Are you planning to hire more?
Serpin Taxt: Our team is very lean: me, CTO Ben, three developers, one designer, plus some customer support. We will expand as needed in the future.
Founder Insights
Q1
Julie: How do you balance the long-term vision in the crypto space with short-term growth?
Serpin Taxt:
· Quickly adapt to current "hot topics"
· Set the ratio of short-term and long-term investments in advance
· Solving real issues is the key
High Tech High Life
Q1
Julie: Tako advocates for "high-tech + high-quality living." How do you maintain your physical and mental health?
Serpin Taxt: I am currently doing Bulgarian split squats while responding to you. Although it's quite tiring, I do this for 45 minutes every day, 5 days a week, and it's very beneficial for both my physical and mental well-being.
Additional Community Questions
Q1
Tako user: @cryptovin Hello, Serpin! Some social platforms have already proven the feasibility of SocialFi. I've installed your Google extension, but there aren't many high-rated individuals at the moment. Will you adjust the registration threshold in the future? Do you see Ethos more as a reputation-based prediction platform or as social infrastructure?
Serpin Taxt: We currently have about 25,000 comments, with an incremental addition of around 500 comments per day. We are still in the early stages and have not yet reached all social circles. We also have an ethos.markets, which is more like a reputation "trading floor" with speculative properties.
Q2
Tako user: @johndoe0505 How do you balance subjective human judgment with on-chain objective data to assess reputation scores?
Serpin Taxt: It's actually not possible to achieve a "perfect balance." Evaluations and endorsements are quantitative data but also contain qualitative content, both of which are important.
Q3
Tako user: @julian-allen How do you prevent people from spending money to buy reputation?
Serpin Taxt: We take inspiration from PoS economic security principles and use a similar S-curve function to ensure that the difference between staking 10 ETH and 1 ETH is not too significant, along with the balancing of social capital. If someone is found to be cheating, it will backfire on them.
Q4
Tako User: @sheabao Is there any incentive for stakers during the staking period? Do you have any measures in place to prevent incidents like the cross-chain bridge being compromised?
Serpin Taxt: Currently, we only give them XP, similar to Reddit's karma points, as a reward. As for the security of the cross-chain bridge, it is not directly within our control.
You may also like
$COIN Joins S&P 500, but Coinbase Isn't Celebrating
On May 13, S&P Dow Jones Indices announced that Coinbase would officially replace Discover Financial Services in the S&P 500 on May 19. While other companies like Block and MicroStrategy, closely tied to Bitcoin, were already part of the S&P 500, Coinbase became the first cryptocurrency exchange whose primary business is in the index. This also signifies that cryptocurrency is gradually moving from the fringes to the mainstream in the U.S.
On the day of the announcement, Coinbase's stock price surged by 23%, surpassing the $250 mark. However, just 3 days later, Coinbase was hit by two consecutive events: a hack where employees were bribed to steal customer data and a demand for a $20 million ransom, and an investigation by the U.S. Securities and Exchange Commission (SEC) into the authenticity of its claim of having over 100 million "verified users" in its securities filings and marketing materials. These two events acted as mini-bombs, and at the time of writing, Coinbase's stock had already dropped by over 7.3%.
Coincidentally, Discover Financial Services, being replaced by Coinbase, can also be considered the "Coinbase" of the previous payment era. Discover is a U.S.-based digital banking and payment services company headquartered in Illinois, founded in 1960. Its payment network, Discover Network, is the fourth largest payment network apart from Visa, Mastercard, and American Express.
In April, after the approval of the acquisition of Discover by the sixth-largest U.S. bank, Capital One, this well-established digital banking company of over 60 years smoothly handed over its S&P 500 "seat" to this emerging cryptocurrency "bank." This unexpected coincidence also portrayed the handover between the new and old eras in Coinbase's entry into the S&P 500, resembling a relay race scene. However, this relay baton also brought Coinbase's accumulated "external troubles and internal strife" to a tipping point.
Over the past decade, cryptocurrency exchanges have been the most stable "profit machines." They play a role in providing liquidity to the entire industry and rely on trading fees to sustain their operations. However, with the comprehensive rollout of ETF products in the U.S. market, this profit model is facing unprecedented challenges. As the leader in the "American stack," with over 80% of its business coming from the U.S., Coinbase is most affected by this.
Starting from the approval of Bitcoin and Ethereum spot ETFs, traditional financial capital has significantly onboarded users and funds that originally belonged to exchanges in a more cost-effective, compliant, and transparent manner. The transaction fee revenue of cryptocurrency exchanges has started to decline, and this trend may further intensify in the coming months.
According to Coinbase's 2024 Q4 financial report, the platform's total trading revenue was $417 million, a 45% year-on-year decrease. The contribution of BTC and ETH's trading revenue dropped from 65% in the same period last year to less than 50%.
This decline is not a result of a decrease in market enthusiasm. In fact, since the approval of the Bitcoin ETF in January 2024, the inflow of BTC into the U.S. market has continued to reach new highs, with asset management giants like BlackRock and Fidelity rapidly expanding their management scale. Data shows that BlackRock's iShares Bitcoin ETF (IBIT) alone has surpassed $17 billion in assets under management. As of mid-May 2025, the cumulative net inflow of 11 major institutional Bitcoin spot ETFs on the market has exceeded $41.5 billion, with a total net asset value of $1214.69 billion, accounting for approximately 5.91% of the total Bitcoin market capitalization.
Institutional investors and some retail investors are shifting towards ETF products, partly due to compliance and tax considerations. On one hand, ETFs have much lower trading costs compared to cryptocurrency exchanges. While Coinbase's spot trading fee rate varies annually in a tiered manner but averages around 1.49%, for example, the management fee for IBIT ETF is only 0.25%, and the majority of ETF institution fees fluctuate around 0.15% to 0.25%.
In other words, the more rational users are, the more likely they are to move from exchanges to ETF products, especially for investors aiming for long-term holdings.
According to multiple sources, several institutions, including VanEck and Grayscale, have submitted applications to the SEC for a Solana (SOL) ETF, with some institutions also planning to submit an XRP ETF proposal. Once approved, this may trigger a new round of fund migration. According to a report submitted by Coinbase to the SEC, as of April, the platform's trading revenue from XRP and Solana accounted for 18% and 10%, nearly one-third of the platform's fee revenue.
However, the Bitcoin and Ethereum ETFs passed in 2024 also reduced the fees for these two tokens on Coinbase from 30% and 15% to 26% and 10%, respectively. If the SOL and XRP ETFs are approved, it will further undermine the core fee revenue of exchanges like Coinbase.
The expansion of ETF products is gradually weakening the financial intermediary status of cryptocurrency exchanges. From their original roles as matchmakers and clearers to now gradually becoming mere "on-ramps and off-ramps" for funds, exchanges are seeing their marginal value squeezed by ETFs.
On May 12, 2025, SEC Chairman Paul S. Atkins gave a keynote speech at the Tokenization and Cryptocurrency Working Group roundtable. The theme of his speech revolved around "It is a new day at the SEC," where he indicated that the SEC would not approach enforcement and regulation the same way as before but would instead pave the way for cryptocurrency assets in the U.S. market.
With signs of cryptocurrency compliance such as the SEC's "NEW DAY" declaration, an increasing number of traditional brokerages are attempting to enter the cryptocurrency industry. One of the most representative cases is the well-known U.S. brokerage Robinhood, which began expanding its crypto business in 2018. By the time of its IPO in 2021, Robinhood's crypto business revenue accounted for over 50% of the company, with a significant boost from the Dogecoin "moonshot" promoted by Musk.
In Q1 2025 earnings report, Robinhood showcased strong growth, especially in revenue from cryptocurrency and options trading. Fueled by Trump's Memecoin, cryptocurrency-related revenue reached $250 million, nearly doubling year-over-year. Consequently, Robinhood Gold subscription users reached 3.5 million, a 90% increase from the previous year, with the rapid growth of Robinhood Gold providing the company with a stable source of income.
Meanwhile, RobinHood is actively pursuing acquisitions in the cryptocurrency space. In 2024, it announced a $2 billion acquisition of the long-standing European cryptocurrency exchange Bitstamp. Additionally, Canada's largest cryptocurrency CEX, WonderFi, which recently went public on the Toronto Stock Exchange, also announced its integration with RobinHood Crypto. After obtaining virtual asset licenses in the UK, Canada, Singapore, and other markets, RobinHood has taken a proactive approach in the compliant cryptocurrency trading market.
Furthermore, an increasing number of brokerage firms are exploring the same path. Futu Securities, Tiger Brokers, and others are also dipping their toes into cryptocurrency trading, with some having applied for or obtained the VA license from the Hong Kong SFC. Although their user bases are currently small, traditional brokerages have a natural advantage in user trust, regulatory licenses, and low fee structures. This could pose a threat to native cryptocurrency platforms in the future.
In April 2025, security researchers discovered that some Coinbase user data was leaked on the dark web. While the platform initially responded by attributing it to a "technical misinformation," it still raised concerns among users regarding its security and privacy protection. Just two days before Dow Jones Indexes announced Coinbase's addition to the S&P 500 Index, on May 11, 2025, Coinbase received an email from an unknown threat actor claiming to have obtained customer account information and internal documents, demanding a $20 million ransom to keep the data private. Subsequent investigations confirmed the data breach.
Cybercriminals obtained the data by bribing overseas customer service agents and support staff, mainly in "non-U.S. regions such as India." These agents abused their access to Coinbase's internal customer support system and stole customer data. As early as February this year, blockchain detective ZachXBT revealed on X platform that between December 2024 and January 2025, Coinbase users lost over $65 million to social engineering scams, with the actual amount potentially higher.
Among the victims was a well-known figure, 67-year-old Ed Suman, an established artist in the art world for nearly two decades, having been involved in the creation of artworks such as Jeff Koons' "Balloon Dog" sculpture. Earlier this year, he fell victim to an impersonation scam involving fake Coinbase customer support, resulting in a loss of over $2 million in cryptocurrency. ZachXBT critiqued Coinbase for its inadequate handling of such scams, noting that other major exchanges have not faced similar issues and recommending Coinbase to enhance its security measures.
Amidst a series of ongoing social engineering incidents, although there has not been any impact on user assets at the technical level so far, it has raised concerns among many retail and institutional investors. Especially institutions holding massive assets on Coinbase. Just considering the U.S. BTC ETF institutions, as of mid-May 2025, they collectively hold nearly 840,000 BTC, and 75% of these are custodied by Coinbase. If we price BTC at $100,000, this amount reaches a staggering $63 billion, which is equivalent to the nominal GDP of two Iceland in the year 2024.
In addition, Coinbase Custody also serves over 300 institutional clients, including hedge funds, family offices, pension funds, and endowments. As of the Q1 2025 financial report, Coinbase's total assets under management (including institutional and retail clients) reached $404 billion. The specific amount of institutional custodied assets was not explicitly disclosed in the latest report, but it should still be over 50% based on the Q4 2024 report.
Once this security barrier is breached, not only could the rate of user attrition far exceed expectations, but more importantly, institutional trust in it would undermine the foundation of its business. Therefore, after a hacking event, Coinbase's stock price plummeted significantly.
Facing a decline in spot trading fee revenue, Coinbase is also accelerating its transformation, attempting to find growth opportunities in derivatives and emerging assets. Coinbase acquired a stake in the options platform Deribit at the end of 2024 and announced the official launch of perpetual contract products in 2025. This acquisition fills in Coinbase's gap in options trading and its relatively small global market share.
Deribit has a strong presence in non-U.S. markets, especially in Asia and Europe. The acquisition has enabled Coinbase to gain a dominant position in bitcoin and ethereum options trading on Deribit, accounting for approximately 80% of the global options trading volume, with daily trading volume remaining above $2 billion.
Meanwhile, 80-90% of Deribit's customer base consists of institutional investors, with their professionalism and liquidity in the Bitcoin and Ethereum options market highly favored by institutions. Coinbase's compliance advantage, coupled with its already robust institutional ecosystem, makes it even more suitable. By using institutions as an entry point, it can face the squeeze from giants like Binance and OKX in the derivatives market.
Facing a similar dilemma is Kraken, which is attempting to replicate Binance Futures' model in non-U.S. markets. Since the derivatives market relies more on professional users, fee rates are relatively higher and stickiness is stronger, making it a significant source of revenue for exchanges. In the first half of 2025, Kraken completed the acquisition of TradeStation Crypto and a futures exchange, aiming to build a complete derivatives trading ecosystem to hedge the risk of declining spot transaction fee income.
With the surge of Memecoin in 2024, Binance, OKX, and various CEX platforms began massively listing small-market-cap, highly volatile tokens to activate active trading users. Due to the wealth effect and trading activity of Memecoins, Coinbase was also forced to join the battle, successively listing popular tokens from the Solana ecosystem such as BOOK OF MEME and Dogwifhat. Although these coins are controversial, they are frequently traded, with fee rates several times higher than mainstream coins, serving as a "blood-boosting" method for spot trading.
However, due to its status as a publicly traded company, this practice is a riskier endeavor for Coinbase. Even in the current crypto-friendly environment, the SEC is still investigating whether tokens like SOL, ADA, and SAND constitute securities.
In addition to the forced transformation strategies carried out by the aforementioned CEXs, they are also starting to lay out RWAs and the most talked-about stablecoin payment fields, such as the PYUSD launched through a collaboration between Coinbase and Paypal, Coinbase's support for the Euro stablecoin EURC by Circle that complies with EU MiCA regulatory requirements, or the USD1 launched through a collaboration between Binance and WIFL. In the increasingly crowded trading field, many CEXs have shifted their focus from just the trading market to the application field.
The golden age of transaction fees has quietly ended, and the second half of the crypto exchange platform game has silently begun.
Arthur Hayes: Why I'm Betting on ETH While the Market Is Obsessed with SOL
CryptoPunks Changes Hands Twice, Did the Originator of NFTs Finally Find Its "Forever Home" This Time?
After Surging 40%, Has Ethereum Price Peaked Upon Exiting the Craze?
Whether you are an insider or an outsider, these days you must be familiar with the news about Ethereum. The reason is simple, causing Ethereum enthusiasts to sigh with emotion and almost throwing off-guard those who defend Ethereum, Ethereum, with a "3-day surge of 40%," climbed to the top of the Douyin Hot List.
As we all know, Ethereum launched the Pectra upgrade on May 7th. This most significant network upgrade since early 2024 integrates the Prague execution layer hard fork and the Electra consensus layer upgrade, significantly improving Ethereum's performance through 11 improvement proposals. The account abstraction feature (EIP-7702) allows users to flexibly manage wallets through social media accounts or multi-signature schemes, reducing the user threshold, attracting more users and developers. The staking mechanism optimization increases the validator ETH cap from 32ETH to 2048ETH and introduces a flexible withdrawal method, making it easier for institutions and individuals to participate in network security, enhancing the market's confidence in Ethereum's long-term value.
At the same time, Pectra optimized the interaction efficiency of Layer 2 networks such as Arbitrum and Optimism, making transactions faster and cheaper, leading to a surge in on-chain activity. As a crucial step for Ethereum's transition from "2G" to "5G," the Pectra upgrade not only enhances network vitality but also "recharges confidence" in the market, directly driving the price increase.
Related Reading: "Ethereum Skyrockets 22% in One Day, E Enthusiasts Rejoice"
It's not just Ethereum itself, as Wall Street also brought important bullish news.
The world's largest asset management company, BlackRock, proposed to the SEC allowing Ethereum ETFs for staking. This proposal is expected to elevate Ethereum ETFs from a mere investment tool to a bond-like "interest-bearing asset," bringing investors both capital appreciation and passive income, igniting market optimism about Ethereum's future potential.
Specifically, BlackRock has proposed to amend its S-1 filing to allow investors to create and redeem ETF shares directly with Ethereum instead of the U.S. dollar (i.e., in-kind redemption). This move, combined with its $2.9 billion BUIDL Fund launched in March 2024, aims to deepen the integration of traditional finance with blockchain. The BUIDL Fund is a tokenized fund operating on the Ethereum network, investing in traditional assets such as U.S. Treasury bonds. This setup is highly attractive to institutional investors, as they can not only benefit from Ethereum's price appreciation but also earn stable cash flow through staking.
Robert Mitchnick, BlackRock's Head of Digital Assets, stated in a CNBC interview in March 2025 that the addition of staking functionality will significantly enhance the appeal of the Ethereum ETF. He admitted that when the Ethereum spot ETF was launched in July 2024 without staking functionality, the market demand was lackluster, and staking could be the key to reversing this trend.
Meanwhile, the SEC's shifting stance on cryptocurrency regulation has also fueled this upward trend. During the tenure of the previous SEC chairman, the regulatory approach was tough, and staking was strictly viewed through the Howey test as a potential unregistered security. Therefore, when approving the Ethereum spot ETF in May 2024, staking functionality was explicitly prohibited.
However, with Trump back in the White House and Paul Atkins taking over the SEC, there has been a noticeable relaxation in crypto regulation. Apart from BlackRock, ETF issuers such as Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted applications for similar staking and in-kind redemption.
Related reading: "New Chairman Takes Office, SEC Transforms into 'Crypto Daddy' Within 48 Hours"
If staking ETFs are approved, the benefits are likely to go beyond price appreciation. The introduction of staking functionality could redefine the role of crypto assets, making them more similar to traditional financial products that provide returns and value appreciation, thereby driving Ethereum closer to mainstream finance.
Currently, the SEC still needs to address several decisions related to crypto ETFs, including whether to approve ETFs for Solana, XRP, Litecoin, and even Dogecoin. With the calls for an "altcoin season" growing louder, Ethereum's strong performance may just be the beginning of a larger crypto market frenzy.
In addition, the Trump family-related DeFi project WLFI is also bullish on this wave of rise, with frequent on-chain activities. According to on-chain data analyst @ai_9684xtpa's monitoring, a WLFI-related address is currently borrowing coins to go long on ETH, borrowing 4 million U from Aave to buy 1590 ETH at an average price of $2515 per ETH.
For this epic surge of Ethereum after half a year of silence, the community has indeed gained more confidence and hope, which has also led to a revival of the entire altcoin market. However, amidst the joy, there are also voices of pessimism. Below is a summary conducted by BlockBeats based on community discussions.
The optimists point out that the current market structure is similar to the eve of the bull markets in 2016 and 2020, predicting a life-changing surge in the next 3-6 months, where some altcoins may even achieve astonishing single-day gains of up to 40%.
@liuwei16602825 stated that this surge signifies the return of the bull market as a sure thing. There is no need to worry about a pullback. The driving force behind the surge uses a high-cost isolated operation, fearing a drop more than any retail investor and will definitely do everything to support the price.
Related Reading: "Ethereum Leads the Surge Triggering the 'Altcoin Season' Speculation, How Do Traders View the Future Market?"
The bears mainly believe that this surge is different from the bull market of 2021, as the current market lacks the confidence of large-scale retail investors entering and holding positions for the long term, with funds rotating too quickly.
@market_beggar observed that a Bitfinex E/B whale has started to close positions and believes that if this whale maintains its high-speed position-closing operation for the next few days, it can be inferred that the whale no longer sees the upside potential of ETH, preparing to take profits and exit. The closing time will be a key focus going forward.
@FLS_OTC stated that there are still many uncertainties at the macro level, and the liquidity cannot support a major bull market. At this stage, it is a "last hurrah," not a complete reversal, and will continue to remain in a short position.
@off_thetarget believes that after ETH transitioned from POW to POS, it lost the "gold standard" of mining machine power cost support. The staking economic model led to a breakdown in value anchoring. Additionally, the L2 ecosystem (such as Starknet, zkSync, etc.) suffered from liquidity fragmentation, failing to establish an effective capital inflow mechanism, causing the collapse of the split disc pattern. Furthermore, the ETH community's excessive pursuit of technical narratives divorced from real-world needs resulted in a weak ecosystem growth. Therefore, he believes that ETH's intrinsic value system has crumbled, and the price is bound to plummet to the 800-1200 range, with a decisive short position at 1800.
@Airdrop_Guard, based on the core logic of the "High Probability Trading Strategy," where three sets of underlying logic different trading systems (such as volume depletion, price supply-demand, long/short position funding rate, etc.) simultaneously issue a short signal at the same point (2580), creating a high-probability trading opportunity. He emphasizes that these systems must be based on different algorithms and logics (rather than mere technical indicator overlays). The current ETH trend aligns with the short conditions in multiple independent dimensions of his trading system, hence the decision to short.
Overall, Bitcoin still maintains over 54% market dominance, and institutional funds' continued preference for it may limit the altcoin's upward potential. The market's future direction will depend on multiple factors, such as Bitcoin's price trend, global macroeconomic conditions, and whether funds can effectively rotate from Bitcoin to the altcoin sector.
Although Ethereum's recent leadership in the market has brought about optimistic sentiment, investors still need to remain rational as different sectors of altcoins are likely to show divergence in trends. Whether this round of Ethereum's rise will usher in a true altcoin frenzy may require more time and conducive conditions.
How to Get Rich in Crypto Without Relying on Luck? Financial Veteran Raoul Pal's Macro Insights and Investment Path
After CEX and Wallet, OKX enters the payment game
Sentient In-Depth Research Report: Secures $85 Million in Funding to Build a Decentralized AGI New Paradigm
Week 16 On-Chain Data: Intensifying Structural Supply-Demand Imbalance, Data Reveals Solid Blueprint for Next Bull Run?
Sui Q1 Advanced Report: The Rise of BTCfi Infrastructure, the Boom of Lending Protocols, and the Future of Rollup-Based Scalability
Crypto Developer: The Trump Family's Coin Minting Real Estate Business
Gate.io MemeBox has officially integrated with the Solana ecosystem, providing lightning-fast on-chain asset trading.
GoRich Officially Launched: On-Chain Transactions with Zero Barrier to Entry, Even Beginners Can Catch 100x Meme Coins
PENGU Experiences Strong Rebound from Bottom with 360% Surge, How Will the Fat Penguin Leverage IP Marketing for a Comeback?
Arthur Hayes Interview: Bitcoin Has Bottomed, Which Tokens Can Outperform Bitcoin?
Parse Haedal Protocol: Sui Liquidity Staking Gem Project, TVL Ratio Exceeds Sum of Competitors
Stablecoin Showdown: Six Rising Stars Enter the Fray, Will the Market Structure Shift?
From the Pokémon Scandal to Doubling Trading Volume, Unveiling the Logic Behind Sui's Recent Strong Rally
Deep Dive into Dubai's Crypto Dream: Illusion, Capital, and Decentralized Empire
$COIN Joins S&P 500, but Coinbase Isn't Celebrating
On May 13, S&P Dow Jones Indices announced that Coinbase would officially replace Discover Financial Services in the S&P 500 on May 19. While other companies like Block and MicroStrategy, closely tied to Bitcoin, were already part of the S&P 500, Coinbase became the first cryptocurrency exchange whose primary business is in the index. This also signifies that cryptocurrency is gradually moving from the fringes to the mainstream in the U.S.
On the day of the announcement, Coinbase's stock price surged by 23%, surpassing the $250 mark. However, just 3 days later, Coinbase was hit by two consecutive events: a hack where employees were bribed to steal customer data and a demand for a $20 million ransom, and an investigation by the U.S. Securities and Exchange Commission (SEC) into the authenticity of its claim of having over 100 million "verified users" in its securities filings and marketing materials. These two events acted as mini-bombs, and at the time of writing, Coinbase's stock had already dropped by over 7.3%.
Coincidentally, Discover Financial Services, being replaced by Coinbase, can also be considered the "Coinbase" of the previous payment era. Discover is a U.S.-based digital banking and payment services company headquartered in Illinois, founded in 1960. Its payment network, Discover Network, is the fourth largest payment network apart from Visa, Mastercard, and American Express.
In April, after the approval of the acquisition of Discover by the sixth-largest U.S. bank, Capital One, this well-established digital banking company of over 60 years smoothly handed over its S&P 500 "seat" to this emerging cryptocurrency "bank." This unexpected coincidence also portrayed the handover between the new and old eras in Coinbase's entry into the S&P 500, resembling a relay race scene. However, this relay baton also brought Coinbase's accumulated "external troubles and internal strife" to a tipping point.
Over the past decade, cryptocurrency exchanges have been the most stable "profit machines." They play a role in providing liquidity to the entire industry and rely on trading fees to sustain their operations. However, with the comprehensive rollout of ETF products in the U.S. market, this profit model is facing unprecedented challenges. As the leader in the "American stack," with over 80% of its business coming from the U.S., Coinbase is most affected by this.
Starting from the approval of Bitcoin and Ethereum spot ETFs, traditional financial capital has significantly onboarded users and funds that originally belonged to exchanges in a more cost-effective, compliant, and transparent manner. The transaction fee revenue of cryptocurrency exchanges has started to decline, and this trend may further intensify in the coming months.
According to Coinbase's 2024 Q4 financial report, the platform's total trading revenue was $417 million, a 45% year-on-year decrease. The contribution of BTC and ETH's trading revenue dropped from 65% in the same period last year to less than 50%.
This decline is not a result of a decrease in market enthusiasm. In fact, since the approval of the Bitcoin ETF in January 2024, the inflow of BTC into the U.S. market has continued to reach new highs, with asset management giants like BlackRock and Fidelity rapidly expanding their management scale. Data shows that BlackRock's iShares Bitcoin ETF (IBIT) alone has surpassed $17 billion in assets under management. As of mid-May 2025, the cumulative net inflow of 11 major institutional Bitcoin spot ETFs on the market has exceeded $41.5 billion, with a total net asset value of $1214.69 billion, accounting for approximately 5.91% of the total Bitcoin market capitalization.
Institutional investors and some retail investors are shifting towards ETF products, partly due to compliance and tax considerations. On one hand, ETFs have much lower trading costs compared to cryptocurrency exchanges. While Coinbase's spot trading fee rate varies annually in a tiered manner but averages around 1.49%, for example, the management fee for IBIT ETF is only 0.25%, and the majority of ETF institution fees fluctuate around 0.15% to 0.25%.
In other words, the more rational users are, the more likely they are to move from exchanges to ETF products, especially for investors aiming for long-term holdings.
According to multiple sources, several institutions, including VanEck and Grayscale, have submitted applications to the SEC for a Solana (SOL) ETF, with some institutions also planning to submit an XRP ETF proposal. Once approved, this may trigger a new round of fund migration. According to a report submitted by Coinbase to the SEC, as of April, the platform's trading revenue from XRP and Solana accounted for 18% and 10%, nearly one-third of the platform's fee revenue.
However, the Bitcoin and Ethereum ETFs passed in 2024 also reduced the fees for these two tokens on Coinbase from 30% and 15% to 26% and 10%, respectively. If the SOL and XRP ETFs are approved, it will further undermine the core fee revenue of exchanges like Coinbase.
The expansion of ETF products is gradually weakening the financial intermediary status of cryptocurrency exchanges. From their original roles as matchmakers and clearers to now gradually becoming mere "on-ramps and off-ramps" for funds, exchanges are seeing their marginal value squeezed by ETFs.
On May 12, 2025, SEC Chairman Paul S. Atkins gave a keynote speech at the Tokenization and Cryptocurrency Working Group roundtable. The theme of his speech revolved around "It is a new day at the SEC," where he indicated that the SEC would not approach enforcement and regulation the same way as before but would instead pave the way for cryptocurrency assets in the U.S. market.
With signs of cryptocurrency compliance such as the SEC's "NEW DAY" declaration, an increasing number of traditional brokerages are attempting to enter the cryptocurrency industry. One of the most representative cases is the well-known U.S. brokerage Robinhood, which began expanding its crypto business in 2018. By the time of its IPO in 2021, Robinhood's crypto business revenue accounted for over 50% of the company, with a significant boost from the Dogecoin "moonshot" promoted by Musk.
In Q1 2025 earnings report, Robinhood showcased strong growth, especially in revenue from cryptocurrency and options trading. Fueled by Trump's Memecoin, cryptocurrency-related revenue reached $250 million, nearly doubling year-over-year. Consequently, Robinhood Gold subscription users reached 3.5 million, a 90% increase from the previous year, with the rapid growth of Robinhood Gold providing the company with a stable source of income.
Meanwhile, RobinHood is actively pursuing acquisitions in the cryptocurrency space. In 2024, it announced a $2 billion acquisition of the long-standing European cryptocurrency exchange Bitstamp. Additionally, Canada's largest cryptocurrency CEX, WonderFi, which recently went public on the Toronto Stock Exchange, also announced its integration with RobinHood Crypto. After obtaining virtual asset licenses in the UK, Canada, Singapore, and other markets, RobinHood has taken a proactive approach in the compliant cryptocurrency trading market.
Furthermore, an increasing number of brokerage firms are exploring the same path. Futu Securities, Tiger Brokers, and others are also dipping their toes into cryptocurrency trading, with some having applied for or obtained the VA license from the Hong Kong SFC. Although their user bases are currently small, traditional brokerages have a natural advantage in user trust, regulatory licenses, and low fee structures. This could pose a threat to native cryptocurrency platforms in the future.
In April 2025, security researchers discovered that some Coinbase user data was leaked on the dark web. While the platform initially responded by attributing it to a "technical misinformation," it still raised concerns among users regarding its security and privacy protection. Just two days before Dow Jones Indexes announced Coinbase's addition to the S&P 500 Index, on May 11, 2025, Coinbase received an email from an unknown threat actor claiming to have obtained customer account information and internal documents, demanding a $20 million ransom to keep the data private. Subsequent investigations confirmed the data breach.
Cybercriminals obtained the data by bribing overseas customer service agents and support staff, mainly in "non-U.S. regions such as India." These agents abused their access to Coinbase's internal customer support system and stole customer data. As early as February this year, blockchain detective ZachXBT revealed on X platform that between December 2024 and January 2025, Coinbase users lost over $65 million to social engineering scams, with the actual amount potentially higher.
Among the victims was a well-known figure, 67-year-old Ed Suman, an established artist in the art world for nearly two decades, having been involved in the creation of artworks such as Jeff Koons' "Balloon Dog" sculpture. Earlier this year, he fell victim to an impersonation scam involving fake Coinbase customer support, resulting in a loss of over $2 million in cryptocurrency. ZachXBT critiqued Coinbase for its inadequate handling of such scams, noting that other major exchanges have not faced similar issues and recommending Coinbase to enhance its security measures.
Amidst a series of ongoing social engineering incidents, although there has not been any impact on user assets at the technical level so far, it has raised concerns among many retail and institutional investors. Especially institutions holding massive assets on Coinbase. Just considering the U.S. BTC ETF institutions, as of mid-May 2025, they collectively hold nearly 840,000 BTC, and 75% of these are custodied by Coinbase. If we price BTC at $100,000, this amount reaches a staggering $63 billion, which is equivalent to the nominal GDP of two Iceland in the year 2024.
In addition, Coinbase Custody also serves over 300 institutional clients, including hedge funds, family offices, pension funds, and endowments. As of the Q1 2025 financial report, Coinbase's total assets under management (including institutional and retail clients) reached $404 billion. The specific amount of institutional custodied assets was not explicitly disclosed in the latest report, but it should still be over 50% based on the Q4 2024 report.
Once this security barrier is breached, not only could the rate of user attrition far exceed expectations, but more importantly, institutional trust in it would undermine the foundation of its business. Therefore, after a hacking event, Coinbase's stock price plummeted significantly.
Facing a decline in spot trading fee revenue, Coinbase is also accelerating its transformation, attempting to find growth opportunities in derivatives and emerging assets. Coinbase acquired a stake in the options platform Deribit at the end of 2024 and announced the official launch of perpetual contract products in 2025. This acquisition fills in Coinbase's gap in options trading and its relatively small global market share.
Deribit has a strong presence in non-U.S. markets, especially in Asia and Europe. The acquisition has enabled Coinbase to gain a dominant position in bitcoin and ethereum options trading on Deribit, accounting for approximately 80% of the global options trading volume, with daily trading volume remaining above $2 billion.
Meanwhile, 80-90% of Deribit's customer base consists of institutional investors, with their professionalism and liquidity in the Bitcoin and Ethereum options market highly favored by institutions. Coinbase's compliance advantage, coupled with its already robust institutional ecosystem, makes it even more suitable. By using institutions as an entry point, it can face the squeeze from giants like Binance and OKX in the derivatives market.
Facing a similar dilemma is Kraken, which is attempting to replicate Binance Futures' model in non-U.S. markets. Since the derivatives market relies more on professional users, fee rates are relatively higher and stickiness is stronger, making it a significant source of revenue for exchanges. In the first half of 2025, Kraken completed the acquisition of TradeStation Crypto and a futures exchange, aiming to build a complete derivatives trading ecosystem to hedge the risk of declining spot transaction fee income.
With the surge of Memecoin in 2024, Binance, OKX, and various CEX platforms began massively listing small-market-cap, highly volatile tokens to activate active trading users. Due to the wealth effect and trading activity of Memecoins, Coinbase was also forced to join the battle, successively listing popular tokens from the Solana ecosystem such as BOOK OF MEME and Dogwifhat. Although these coins are controversial, they are frequently traded, with fee rates several times higher than mainstream coins, serving as a "blood-boosting" method for spot trading.
However, due to its status as a publicly traded company, this practice is a riskier endeavor for Coinbase. Even in the current crypto-friendly environment, the SEC is still investigating whether tokens like SOL, ADA, and SAND constitute securities.
In addition to the forced transformation strategies carried out by the aforementioned CEXs, they are also starting to lay out RWAs and the most talked-about stablecoin payment fields, such as the PYUSD launched through a collaboration between Coinbase and Paypal, Coinbase's support for the Euro stablecoin EURC by Circle that complies with EU MiCA regulatory requirements, or the USD1 launched through a collaboration between Binance and WIFL. In the increasingly crowded trading field, many CEXs have shifted their focus from just the trading market to the application field.
The golden age of transaction fees has quietly ended, and the second half of the crypto exchange platform game has silently begun.
Arthur Hayes: Why I'm Betting on ETH While the Market Is Obsessed with SOL
CryptoPunks Changes Hands Twice, Did the Originator of NFTs Finally Find Its "Forever Home" This Time?
After Surging 40%, Has Ethereum Price Peaked Upon Exiting the Craze?
Whether you are an insider or an outsider, these days you must be familiar with the news about Ethereum. The reason is simple, causing Ethereum enthusiasts to sigh with emotion and almost throwing off-guard those who defend Ethereum, Ethereum, with a "3-day surge of 40%," climbed to the top of the Douyin Hot List.
As we all know, Ethereum launched the Pectra upgrade on May 7th. This most significant network upgrade since early 2024 integrates the Prague execution layer hard fork and the Electra consensus layer upgrade, significantly improving Ethereum's performance through 11 improvement proposals. The account abstraction feature (EIP-7702) allows users to flexibly manage wallets through social media accounts or multi-signature schemes, reducing the user threshold, attracting more users and developers. The staking mechanism optimization increases the validator ETH cap from 32ETH to 2048ETH and introduces a flexible withdrawal method, making it easier for institutions and individuals to participate in network security, enhancing the market's confidence in Ethereum's long-term value.
At the same time, Pectra optimized the interaction efficiency of Layer 2 networks such as Arbitrum and Optimism, making transactions faster and cheaper, leading to a surge in on-chain activity. As a crucial step for Ethereum's transition from "2G" to "5G," the Pectra upgrade not only enhances network vitality but also "recharges confidence" in the market, directly driving the price increase.
Related Reading: "Ethereum Skyrockets 22% in One Day, E Enthusiasts Rejoice"
It's not just Ethereum itself, as Wall Street also brought important bullish news.
The world's largest asset management company, BlackRock, proposed to the SEC allowing Ethereum ETFs for staking. This proposal is expected to elevate Ethereum ETFs from a mere investment tool to a bond-like "interest-bearing asset," bringing investors both capital appreciation and passive income, igniting market optimism about Ethereum's future potential.
Specifically, BlackRock has proposed to amend its S-1 filing to allow investors to create and redeem ETF shares directly with Ethereum instead of the U.S. dollar (i.e., in-kind redemption). This move, combined with its $2.9 billion BUIDL Fund launched in March 2024, aims to deepen the integration of traditional finance with blockchain. The BUIDL Fund is a tokenized fund operating on the Ethereum network, investing in traditional assets such as U.S. Treasury bonds. This setup is highly attractive to institutional investors, as they can not only benefit from Ethereum's price appreciation but also earn stable cash flow through staking.
Robert Mitchnick, BlackRock's Head of Digital Assets, stated in a CNBC interview in March 2025 that the addition of staking functionality will significantly enhance the appeal of the Ethereum ETF. He admitted that when the Ethereum spot ETF was launched in July 2024 without staking functionality, the market demand was lackluster, and staking could be the key to reversing this trend.
Meanwhile, the SEC's shifting stance on cryptocurrency regulation has also fueled this upward trend. During the tenure of the previous SEC chairman, the regulatory approach was tough, and staking was strictly viewed through the Howey test as a potential unregistered security. Therefore, when approving the Ethereum spot ETF in May 2024, staking functionality was explicitly prohibited.
However, with Trump back in the White House and Paul Atkins taking over the SEC, there has been a noticeable relaxation in crypto regulation. Apart from BlackRock, ETF issuers such as Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted applications for similar staking and in-kind redemption.
Related reading: "New Chairman Takes Office, SEC Transforms into 'Crypto Daddy' Within 48 Hours"
If staking ETFs are approved, the benefits are likely to go beyond price appreciation. The introduction of staking functionality could redefine the role of crypto assets, making them more similar to traditional financial products that provide returns and value appreciation, thereby driving Ethereum closer to mainstream finance.
Currently, the SEC still needs to address several decisions related to crypto ETFs, including whether to approve ETFs for Solana, XRP, Litecoin, and even Dogecoin. With the calls for an "altcoin season" growing louder, Ethereum's strong performance may just be the beginning of a larger crypto market frenzy.
In addition, the Trump family-related DeFi project WLFI is also bullish on this wave of rise, with frequent on-chain activities. According to on-chain data analyst @ai_9684xtpa's monitoring, a WLFI-related address is currently borrowing coins to go long on ETH, borrowing 4 million U from Aave to buy 1590 ETH at an average price of $2515 per ETH.
For this epic surge of Ethereum after half a year of silence, the community has indeed gained more confidence and hope, which has also led to a revival of the entire altcoin market. However, amidst the joy, there are also voices of pessimism. Below is a summary conducted by BlockBeats based on community discussions.
The optimists point out that the current market structure is similar to the eve of the bull markets in 2016 and 2020, predicting a life-changing surge in the next 3-6 months, where some altcoins may even achieve astonishing single-day gains of up to 40%.
@liuwei16602825 stated that this surge signifies the return of the bull market as a sure thing. There is no need to worry about a pullback. The driving force behind the surge uses a high-cost isolated operation, fearing a drop more than any retail investor and will definitely do everything to support the price.
Related Reading: "Ethereum Leads the Surge Triggering the 'Altcoin Season' Speculation, How Do Traders View the Future Market?"
The bears mainly believe that this surge is different from the bull market of 2021, as the current market lacks the confidence of large-scale retail investors entering and holding positions for the long term, with funds rotating too quickly.
@market_beggar observed that a Bitfinex E/B whale has started to close positions and believes that if this whale maintains its high-speed position-closing operation for the next few days, it can be inferred that the whale no longer sees the upside potential of ETH, preparing to take profits and exit. The closing time will be a key focus going forward.
@FLS_OTC stated that there are still many uncertainties at the macro level, and the liquidity cannot support a major bull market. At this stage, it is a "last hurrah," not a complete reversal, and will continue to remain in a short position.
@off_thetarget believes that after ETH transitioned from POW to POS, it lost the "gold standard" of mining machine power cost support. The staking economic model led to a breakdown in value anchoring. Additionally, the L2 ecosystem (such as Starknet, zkSync, etc.) suffered from liquidity fragmentation, failing to establish an effective capital inflow mechanism, causing the collapse of the split disc pattern. Furthermore, the ETH community's excessive pursuit of technical narratives divorced from real-world needs resulted in a weak ecosystem growth. Therefore, he believes that ETH's intrinsic value system has crumbled, and the price is bound to plummet to the 800-1200 range, with a decisive short position at 1800.
@Airdrop_Guard, based on the core logic of the "High Probability Trading Strategy," where three sets of underlying logic different trading systems (such as volume depletion, price supply-demand, long/short position funding rate, etc.) simultaneously issue a short signal at the same point (2580), creating a high-probability trading opportunity. He emphasizes that these systems must be based on different algorithms and logics (rather than mere technical indicator overlays). The current ETH trend aligns with the short conditions in multiple independent dimensions of his trading system, hence the decision to short.
Overall, Bitcoin still maintains over 54% market dominance, and institutional funds' continued preference for it may limit the altcoin's upward potential. The market's future direction will depend on multiple factors, such as Bitcoin's price trend, global macroeconomic conditions, and whether funds can effectively rotate from Bitcoin to the altcoin sector.
Although Ethereum's recent leadership in the market has brought about optimistic sentiment, investors still need to remain rational as different sectors of altcoins are likely to show divergence in trends. Whether this round of Ethereum's rise will usher in a true altcoin frenzy may require more time and conducive conditions.
How to Get Rich in Crypto Without Relying on Luck? Financial Veteran Raoul Pal's Macro Insights and Investment Path
After CEX and Wallet, OKX enters the payment game
Popular coins
Latest Crypto News
Customer Support：@weikecs
Business Cooperation：@weikecs
Quant Trading & MM：bd@weex.com
VIP Services：support@weex.com
App