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WE-Launch
Tokenomics Report: Nearly $70 Billion in Tokens Set to Unlock in 2025, with an Average Meme Lifespan of Only One Year
Original Title: Tokenomist Annual Report 2024
Original Source: Tokenomist
Original Translation: Nancy, PANews
In late January, Tokenomist released the "Tokenomist Annual Report 2024," covering key trends such as token unlocks, low circulating supply high FDV tokens, Memecoins, and AI proxies, revealing their impact on market liquidity, investor sentiment, and long-term value capture.
The report highlighted that 2024 began with the issuance of some significant projects with low circulating supply and high FDV (Fully Diluted Value), setting the tone for the industry's development trajectory. However, there was a shift in market sentiment mid-year. From short-term, low-cap tokens with vesting schedules to fully unlocked, community-driven meme coins, reflecting a divergence in investor preferences. By year-end, the "super MEME cycle" emerged as the dominant narrative, attracting widespread attention.
Key Highlights:
· It is expected that over $150 billion in tokens will unlock from 2024 to 2025, with approximately $82 billion absorbed in 2024 alone.
· By the end of 2024, the average circulating supply/FDV ratio at token issuance had risen to 35%;
· The 2024 MEME track had a return rate of up to 536%, far exceeding the performance of Bitcoin and Ethereum.
· The long-term success rate of Memecoins is very low, with 97% eventually "dying," and an average lifespan of about 1 year, with many tokens disappearing much sooner;
· A new crypto trend emerged combining MEME, AI, and social media, with self-sovereign entities, such as Virtuals and ai16z frameworks, leading innovation.
Top 5 Unlocking Events Before 2024
Token unlocking events are key milestones in the crypto market. Releasing locked tokens into circulation according to a preset vesting schedule can affect price and funding rates, especially in the short term. Therefore, this section analyzes the five largest unlocking events in 2024, focusing on the price impact and funding rate trends within a 60-day window (-30 to +30 days). By analyzing the relationship between funding rates and price changes, we can assess whether the market's expectations (as reflected in derivative positions) align with actual price trends. This provides valuable insights into market sentiment, particularly in critical events like token unlocks.
1. Arbitrum (ARB): $22.2 Billion Token Unlocking
In March 2024, when Bitcoin hit a new all-time high of $74,000, Arbitrum (ARB) conducted the largest token unlocking event of the month, unlocking tokens worth $22.2 billion. This was the first unlocking for Arbitrum's private investors and founders/ team, introducing a significant amount of new token supply to the market.
In terms of price impact, leading up to the unlocking date, ARB's price impact steadily declined, possibly reflecting cautious trading behavior anticipating the supply increase. In the 30 days post-unlocking, ARB's price impact continued to decrease by 33.8%, possibly due to more supply entering the market.
Regarding the funding rate, ARB's funding rate closely tracked Bitcoin's funding rate over a 60-day period but remained higher than Bitcoin, indicating relatively high demand for leveraged positions during that time.
2. Sui (SUI): $12.1 Billion Token Unlocking
In May 2024, Sui (SUI) witnessed the second-largest unlocking event of the year, unlocking tokens worth $12.1 billion. This unlocking released a significant token supply, with the majority allocated to private investors.
Analyzing the price impact, SUI's price surged by 39.6% in the 30 days before the unlocking but dropped by 20.3% in the 30 days post-unlocking.
Regarding the funding rate, in the 20 days leading up to the unlocking, SUI's funding rate turned negative, reaching -34.1% on the unlocking day, displaying a pessimistic sentiment ahead of the unlocking event. Around 20 days after the unlocking, SUI's funding rate recovered and aligned with Bitcoin's funding rate (approximately 11.0%).
3. Celestia (TIA): $9.7744 Billion Token Unlocking
In October 2024, Celestia (TIA) kicked off a significant unlocking event worth $9.7744 billion. This marked the first major unlocking for TIA post its TGE event, becoming one of the largest token unlockings of the year, with the vast majority distributed to private investors and founders/ team. The dominance of private investors and founders/ team in the unlocking ensured continued incentives for long-term contributors and early supporters.
Regarding price impact, prior to unlocking, TIA's price continued to drop and fell by 25% within 20 days after unlocking. However, it quickly rebounded, surpassing BTC by 19.2% after 30 days of unlocking.
TIA's funding rate chart is more volatile compared to other tokens. On the unlocking day, TIA's funding rate remained in the negative territory (-61.1%); however, a few days after unlocking, it returned to a positive value, quickly aligning with BTC's funding rate.
4. Jito (JTO): Unlocking Value $5.6391 Billion
In December 2024, JTO concluded the year with a significant unlocking event valued at $5.6391 billion, releasing 151,909,981 JTO into circulation. The unlocking was led by the founding team, holding 57.3%, followed by private investors at 37.9%. This was not surprising.
Due to significant market volatility at that time, when observing price impact, we saw JTO's price impact shift from negative to positive twice before unlocking. Post unlocking, the price impact continued to rise, then sharply dropped to around -15%. By the end of 30 days, it shifted back from positive to negative.
The funding rate trend also reflected this volatility. In the 30 days before unlocking, JTO's funding rate roughly matched that of BTC, sometimes surpassing it and sometimes falling below. However, in the 30 days after unlocking, we observed continuous fluctuation in JTO's funding rate while BTC remained relatively stable.
5. Aptos (APT): Unlocking Value $4.236 Billion
The fifth-largest unlocking event of the year occurred in April 2024, where Aptos (APT) underwent a $4.236 billion unlocking event. The largest share in the unlocking was held by the founders/teams and private investors, with approximately 13% allocated to the community.
APT's price impact surged by approximately 51.7% in the 5 days before unlocking (from day 20 to day 15 before unlocking), driven by increased trading activity and speculation. However, starting from 15 days before unlocking, the price impact began to steadily decline. During the post-unlocking period, the price impact turned negative and remained in that state for the next 30 days. During this time, the entire crypto market also experienced a downward trend.
The funding rate trend of APT is very similar to BTC, similar to the funding rate trend of ARB. This indicates that price impact may be more due to macro factors affecting the overall market.
Analysis
By analyzing these token unlock events, it is evident that the market sentiment before and after unlocking can vary due to factors such as unlock size, market expectations, macroeconomic conditions, and other factors. Predicting outcomes based on these factors is inherently complex, but they can provide some observations to help us understand how key driving factors influence market behavior during unlock events.
As these unlock events approach, analyzing market expectations is crucial, which can be observed through price impact and funding rates. A price drop before unlock may reflect market concerns about increased supply, while a price increase may indicate market optimism or speculative behavior. Prior to the unlock in May 2024 for SUI and the unlock in October 2024 for TIA, we observed that their price impact and funding rates both showed a fairly pessimistic sentiment. This aligns with the view that unlock events are generally bearish as they dilute the supply and increase selling pressure. However, sometimes the opposite can occur; an unlock may be a bullish signal, releasing more supply into the market for buyers to snap up. As seen in the case of ARB, the funding rate before unlocking reached a high of +115.8%, indicating increased leverage demand for long positions and optimistic market sentiment.
Although these factors provide valuable insights, we must also consider the overall market conditions. During a market downturn, there may be larger factors driving the price action of a specific token, as seen in the cases of JITO and APT. The funding rates of these two tokens are closely linked to BTC's movement, or experience significant fluctuations when BTC's funding rate remains relatively stable.
Low Circulating Supply High FDV Token
Circulating supply is defined as the ratio of circulating supply to maximum supply, and has become an increasingly important metric when considering supply data. Low circulating supply high FDV (Fully Diluted Valuation) tokens, characterized by a low circulating supply at issuance but a high overall valuation, have become increasingly prominent in recent years. This pattern leads to rapid price appreciation due to limited liquidity at issuance, but often faces long-term sustainability criticism due to subsequent token unlocks putting downward pressure on the market. This section aims to examine the historical background, trends, and impacts of this token economic model, providing a data-driven perspective to assess its viability.
Despite the recent surge in popularity of low circulating supply high FDV tokens, this pattern is not a new phenomenon. It first gained significant attention during the 2020-2021 bull market. A notable example is Curve (CRV), which was issued in August 2020, and prominent crypto investor Jason Choi used CRV to highlight the risks of this pattern. Within seven hours of trading, CRV's market cap increased from $2 million to $6 million. However, the FDV of the token at issuance was almost half of Bitcoin's market cap, demonstrating that this valuation was unsustainable. Early investors faced significant losses as the price dropped by 50% shortly after issuance, attributed to inflation and early sellers exiting their positions leading to dilution.
The CRV case study reveals a key issue: the initial price trend of low circulating supply, high Fully Diluted Value (FDV) tokens may mislead investors who overlook the long-term dilution impact. Despite CRV's exaggerated inflation mechanism, it laid the foundation for a broader trend that would unfold later.
An analysis of token issuance from 2020 to 2024 shows a clear pattern in the adoption of the low circulating supply, high FDV model. These tokens were particularly prevalent at the end of 2020 and the beginning of 2024, coinciding with Bitcoin's halving and the subsequent bull market.
Over time, the crypto community has become increasingly aware of the risks posed by this pattern, prompting recent projects to make adaptive adjustments in tokenomics. One notable trend is the change in the circulating supply/FDV ratio at issuance. By the end of 2024, the average ratio had increased to around 35%, reflecting investors' greater caution. For example, Binance introduced listing criteria that consider the circulating supply at Token Generation Events (TGEs), encouraging projects to prioritize sustainable tokenomics.
To further understand the impact of the low circulating supply, high FDV model, we analyzed the performance of 2024's altcoins at issuance. We aggregated key metrics, including FDV, market cap, circulating supply at TGE, price performance, and price change, for the top 25 FDV-ranked altcoins at TGE dates.
Excluding outliers like Hyperliquid and Ondo Finance, the data shows that there is not a strong correlation between the circulating supply at TGE and this year's price performance, as visualized in the scatter plot below. There are several reasons that could account for this. Most notably, the increase in demand and liquidity, along with a greater focus on hype-driven/emotion-driven narratives in the recent bull market cycle, may have reduced the correlation between circulating supply and price performance. On the other hand, for some tokens, the evolution of tokenomics has introduced new dimensions, such as inflationary or deflationary tokenomics and staking mechanisms, which may have diluted the impact of circulating supply at TGE.
Scatter plot of 90-day price performance versus circulating supply/FDV ratio at initial pricing date. Excluding outliers like HYPE, ONDO, etc.
As mentioned above, there are also exceptions. Hyperliquid conducted a distribution of 33% of its token supply through a community airdrop at issuance, without any VC unlocks. This approach promoted decentralization and community participation, setting a benchmark for fair token distribution.
The following chart shows the total token unlock value from 2020 to 2030, revealing some significant patterns during the past two bull market cycles. The total unlock value peaked in 2021 at $136.7 billion, over eight times the value in 2020 ($16.9 billion). While not as significant, the total unlock value in 2024 ($82 billion) is roughly double that of the previous year ($47 billion). This peak aligns with the peak of the previous bull market when many projects issued large amounts of locked token allocations for future release.
Looking ahead, the market will face significant unlock pressure. From 2024 to 2025, over $150 billion in tokens are expected to unlock, with 2024 alone accounting for approximately $82 billion. This poses a short-term risk to market stability. However, as lock-up plans are completed, the reduction in unlock pressure may contribute to long-term market stability.
The low circulating supply, high FDV (Fully Diluted Valuation) token model has proven to be a double-edged sword. While it can drive rapid price appreciation, it also brings significant risks due to future dilution and unsustainable valuations. As the crypto market matures, investors and projects must carefully assess tokenomics to ensure alignment with long-term goals. Evolutions in token distribution mechanisms like Hyperliquid offer promising alternatives that focus on fairness and sustainability.
It is important to note that these forecasts are based on data from 378 tokens tracked by Tokenomist, representing a portion of the market. New token issuances and changes in existing tokenomics, such as relocking or burning mechanisms, could alter these dynamics.
MEME and AI Agents
Throughout 2024, Bitcoin maintained its dominance in the cryptocurrency market, attracting increasing investment from the traditional financial sector. However, sentiment regarding altcoins underperforming was also growing. Despite a surge in growth towards the end of the year, many altcoins failed to keep pace with Bitcoin.
Source: Glassnode x Fasanara_Digital Assets Report Q4 2024
Analysis data shows that among the top 250 market cap-ranked altcoins, only 28.1% outperformed Bitcoin, while 45.5% outperformed Ethereum.
Comparing to the broader altcoin market, one sector has significantly outperformed its peers: Memecoin. This sector showcased extraordinary growth in 2024, achieving a year-to-date return of 536%—a performance that surpasses Bitcoin and Ethereum by 177% and 300%, respectively. Notably, among the top 54 tokens by market cap launched this year, 19 were Memecoins.
Appeal of Memecoin
The remarkable success of Memecoin has raised vital questions about the reasons behind its appeal and ongoing popularity. This section explores the data and motivations behind this unique phenomenon.
· Fair Launch Model
One of the key drivers of Memecoin's appeal is its fair launch model, which allocated its entire token supply to the community from day one. This approach ensured 100% circulation, aligning with the core tenets of cryptocurrency: fairness, transparency, and decentralization. In contrast to many other projects, Memecoin avoided excessive team allocations or early investor privileges, promoting equitable participation.
This fair launch model resonated strongly with investors, especially as sentiments grew against projects with heavy venture capital backing. These projects are sometimes criticized for having convoluted tokenomics and distribution structures that may seem skewed towards early insiders.
Furthermore, Memecoin offers a simpler and more straightforward narrative compared to other altcoins, which often require significant technical expertise to assess. Memecoin focuses on community engagement and cultural relevance, making it an effective tool for attracting new cryptocurrency users.
· Community Long-Term Incentive Alignment
The traditional approach to Web3 community building heavily relies on token airdrops to incentivize early contributors. These rewards typically target individuals creating content, participating in Discord, or engaging in protocol-specific activities. While this model effectively sparks initial interest, our analysis revealed significant shortcomings in long-term community retention. Studies show that airdrop hunters often immediately sell the received tokens, especially when the distribution does not meet expectations, leading to decreased community engagement and potential negative sentiment towards the protocol.
Our research indicates that Memecoin projects have shown significant success in building sustainable communities through an innovative incentive alignment approach. These projects effectively merge the interests of the team and the community, creating a situation described by market participants as "the best marketing is price appreciation." Drawing on Murad's framework, successful crypto communities often exhibit characteristics akin to fervent followers, possessing loyal supporters and a unique common belief. This phenomenon fosters intense shared enthusiasm among participants, enhancing retention, and driving organic growth through community-driven initiatives. This approach creates a gamified environment where users feel directly tied to the project's success, motivating them to maintain long-term engagement.
· Community Takeover: A New Paradigm
A emerging trend in protocol governance is Community Takeover (CTO). When a project's original developers abandon the project, community users and token holders take over the project's future direction and management, leading to a community takeover. As the project transitions to community ownership, token holders become both owners and operators. This dual role fundamentally changes their relationship with the project. Community members must actively participate in governance, development, and marketing to maintain and enhance the value of their held tokens.
· Growth Catalyst
In 2024, a major catalyst for the Memecoin phenomenon was pump.fun, aimed at enabling more people to easily create and trade their own tokens, greatly reducing the entry barrier. Since its launch in January 2024, as of January 6, 2025, over 5,581,665 tokens have been created on pump.fun. As shown in the graph below, most Solana-based tokens are now issued through pump.fun rather than traditional methods. The success of pump.fun has also spurred competition, with other blockchain ecosystems exploring similar platforms to capitalize on the growing interest in fairly launched tokens.
· Risks and Limitations
Despite Memecoins' popularity in 2024, they still come with inherent risks. Like any newly issued token, Memecoins are essentially a trend and often experience rapid popularity and an equally fast decline. Similarly, repeated Memecoin oversaturation can weaken their impact, as illustrated by Murad's "Memecoin Pyramid," where the proportion of successful Memecoins is small compared to those that gradually fade away.
Murad's Memecoin Pyramid Source: The Meme Coin Supercycle - TOKEN2049
The long-term success rate of Memecoins is significantly lower. According to Chainplay's "2024 Memecoin Status" report, the average lifespan of Memecoins is one year, with 97% of Memecoins eventually considered "dead" (defined as having a 24-hour trading volume below $1,000, liquidity below $50,000, and no updates on Twitter within three months). Currently, only one Memecoin on pump.fun has a market capitalization exceeding $1 billion, with eight exceeding $100 million.
Another key risk is the potential for malicious activities. Despite a fair launch, insiders or developers may still control a majority of the tokens, undermining the principle of decentralization and allowing for pump and dumps. Although pump.fun combats this scenario through its bonding curve mechanism and token "graduation" to Raydium, scams may still go undetected. Even with a fair launch Memecoin, there have been cases where teams or insiders use virtual wallets to sniper meme coins. It is worth referring to websites like gmgn.ai for risk analysis indicators such as top 10 token holders, blacklist, developer activity, and a bubble chart.
AI Agents
Another prominent area in 2024 is AI agents. AI agents are essentially autonomous entities capable of performing tasks and interacting with other users/agents, leveraging blockchain technology for on-chain operations. They are likened to an enhanced version of Memecoin because they combine memes, AI, and social media elements to create autonomous entities that can interact with users and self-propagate. In 2024, we saw the emergence of key players like Virtuals and ai16z, providing frameworks for developing and deploying AI agents.
In an article about 2025 crypto predictions, Dragonfly Capital Managing Partner Haseeb Qureshi predicted that tokens related to AI agents will surpass Memecoins in the upcoming year. He believes that unlike Key Opinion Leaders (KOL) and influencers, AI agents never rest, conform to majority opinions, and are less driven by self-interest. They also excel in real-time information aggregation and amplification. Current agents like aixbt, by curating social media data to create alpha information feeds, demonstrate potential incremental improvements in the next year or two.
However, Qureshi predicts that over time, the novelty of these agents may fade. An abundance of AI agents may lead to an emotional backlash, and the crypto community may revert to supporting human preferences. Of course, this is also a natural evolution of trends. Nevertheless, Qureshi suggests that the truly transformative impact in this space will come from software engineering agents, with the potential to fundamentally change the development and security of blockchain projects.
Broader Impact
Furthermore, noteworthy is the continuous innovation in the DeFi space over the past year. OG projects like Aave maintained a strong performance, reaching record highs in deposits this year. Meanwhile, new projects like Ethena have attracted increasing attention from the traditional finance sector. RWA projects like Ondo Finance have also exceeded expectations this year, possibly driven by the increasing demand for the tokenization of financial products.
The success of Memecoins and their community-driven tokenomics has inspired other areas to adopt similar fair launch practices. For example, the DeSci token. Another noticeable trend is that, during token issuance, an increasing number of projects are allocating a larger proportion to the community.
Another anticipated potential trend is the fusion of Memecoins and utility. User @hmalivya9 proposed the concept of "Community Clusters" on X. The model suggests a staking system that would collaborate Memecoin projects with utility token projects, where Memecoin holders can stake tokens to earn rewards from multiple utility token projects. This system would be enhanced through requiring active social media participation, essentially gamifying the branding of utility tokens. hmalivya9 envisions this symbiotic relationship as a blueprint for the future structure of the crypto community, intertwining entertainment with utility, a concept not entirely new. For example, in Hyperliquid, holders of its native spot token $PURR can receive airdrops of other spot tokens within the Hyperliquid ecosystem and earn Hyperliquid Points. $PURR can only be traded within Hyperliquid, significantly expanding its user base.
In the coming year, AI agents will also see continued development. ai16z has put forward a tokenomics model where token staking serves as a validation system, granting platform access, enabling governance participation, and establishing accountability through possible penalty conditions. In this evolved staking model, stakeholders' economic incentives are directly linked to their contributions to the ecosystem's quality and growth.
Undoubtedly, 2025 will be an exciting year, whether through the evolution of existing trends or the emergence of new ones.
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$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.
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Key Market Intelligence on May 14th, how much did you miss out on?
1.Binance Alpha Launches HIPPO, BLUE, and Other Tokens
2.Believe Ecosystem Tokens See General Rise, LAUNCHCOIN Surges Over 250% in 24 Hours
3.Tiger Securities Introduces Cryptocurrency Deposit and Withdrawal Service, Supports Mainstream Cryptocurrencies such as BTC and ETH
4.Current Bitcoin Rally Possibly Driven by Institutions, Retail Traders Yet to Join
5.Binance Wallet's New TGE Privasea AI Participation Requires a 198 Point Threshold, with a Point Consumption of 15
Source: Overheard on CT (tg: @overheardonct), Kaito
PUMP: Today's discussions about PUMP focus on its new creator revenue-sharing model: the platform will allocate 50% of PumpSwap revenue to token creators, sparking varied reactions from users. Some criticize the move as insufficient or even misleading, while others view it as a positive step the platform is taking to reward creators. Meanwhile, PUMP faces market pressure from emerging competitors like LetsBONKfun and Raydium, which are rapidly gaining market share. Users also express concerns about PUMP's sustainability and potential regulatory risks in the U.S., with discussions extending to the platform's impact on the entire memecoin ecosystem.
COINBASE: Today, Coinbase became the first crypto company to join the S&P 500 Index, replacing Discover Financial Services, sparking widespread industry attention. The entire crypto community views this milestone as a significant development, signaling that crypto assets are further integrating into the mainstream financial system. The news has sparked lively discussions on Twitter, with many users pointing out that this may attract more institutional investors to enter the Bitcoin and other cryptocurrency markets.
XRP: XRP became the focal point of today's crypto discussion, with its significant market movements and strategic advances drawing attention. XRP has surpassed USDT to become the third-largest cryptocurrency by market capitalization, sparking market excitement and discussions about its future potential. The surge in market capitalization and price is believed to be related to increasing institutional interest, deepening strategic partnerships, and its role in the crypto ecosystem. Additionally, XRP's integration into multiple financial systems and its potential as a macro asset class are also seen as key factors driving the current market sentiment.
DYDX: Today's discussions about DYDX mainly focused on the dYdX Yapper Leaderboard launched by KaitoAI. The leaderboard aims to identify the most active community participants, with a total of $150,000 in rewards to be distributed over the first three seasons. This initiative has sparked broad community participation, with many users discussing the potential rewards and the incentive effect on the DYDX ecosystem. Meanwhile, progress on the ethDYDX to dYdX native chain migration and historical airdrop events have also been topics of discussion.
1. "What Is 'ICM'? Holding Up the $4 Billion Market Cap Solana's New Narrative"
Overnight, the hottest narrative in the crypto space has become "Internet Capital Markets," with a host of crypto projects and founders, led by the Solana ecosystem's new Launchpad platform Believe, releasing this phrase. Together with "Believe in something," it has become the new slogan heralding the onset of a bull market. What exactly is the so-called "Internet Capital Market," will it become a short-lived hype phrase like the Base ecosystem's previous Content Coin, and what related targets are available for selection?2.《LaunchCoin Surges 20x in One Day, How Did Believe Create a $200M Market Cap Shiba Inu After Going to Zero?｜100x Retrospective》
LAUNCHCOIN broke through a $200 million market cap today, with the long-lost liquidity and such a high market cap "Memecoin" almost bringing half of the on-chain crypto community CT into the fray. The community is crazily discussing this token, with half of it being FOMO and the other half being FUD. This token, originally issued by Believe founder Ben Pasternak under his personal identity, transformed into a new platform token after a renaming. From once going to zero to a $200 million market cap, what happened in between?May 14 On-chain Fund Flow
Within 24 hours, GOONC's market cap soared to 70 million, could GOONC be the next billion-dollar dog on the Believe platform?
Bitcoin has broken $100,000, Ethereum has surpassed 2500, and is Solana's hot streak about to make a comeback?
The current market is in a state of macro euphoria, with GOONC riding the wave today, skyrocketing 10x in just a few hours, reaching a market cap of tens of millions of dollars, trading volume soaring past 50 million, and rumors swirling that the developer may be from OpenAI (unconfirmed but intriguing enough).
A ludicrous and absurd Solana meme that some actually buy into.
GOONC is a meme coin that has sprouted from the "gooning" subculture, offering no technological innovation or practical use, its sole function being speculation.
It takes inspiration from an NSFW term "gooning," which refers to a person being deeply immersed in certain content (you know what), eventually entering a nearly religious-like trance.
In Reddit (such as r/GOONED, r/GoonCaves) and some counterculture media outlets (such as MEL Magazine in 2020), "gooning" has gradually transitioned from an adult label to a meme-addicted, digital content and virtual self-indulgence synonym, arguably the epitome of Degen spirit.
GOONC is playing around with this concept, packaging the addictive nature, uselessness, and irony of gooning into a tradable financial product. The project team has made it clear: "We do not solve blockchain problems, we only trade absurdity." Blunt but oddly genuine.
GOONC launched on May 13, 2025, using the meme coin launch platform Believe App's LaunchCoin module on Solana. This tool is highly Degen: zero technical barriers, a few clicks to create a coin, perfect for projects like GOONC that can come up with ideas out of the blue.
The mastermind behind GOONC is also quite something and is the most talked-about, with KOL @basedalexandoor on X platform (alias "Pata van Goon") personally involved. His profile even caught the attention of Marc Andreessen, co-founder of a16z, making onlookers unable to resist speculating if GOONC has a hint of OpenAI lineage.
While this 'OpenAI Endorsement' is currently just community speculation, it is definitely a good card to play to fuel hype. Saying "we are pure speculation" on one hand, while tagging a few "AI + a16z" on the other.
GOONC took off as soon as it launched. After its launch on May 13, 2025, its market capitalization skyrocketed to $22 million within 4 hours, with a trading volume exceeding $25.6 million in 24 hours. According to platform data, the first day of trading saw an astonishing +41,100% surge, soaring from $0.0000001 to $0.02, becoming a "missed-the-boat" situation.
GOONC quickly formed an active trading community post-launch, with a lot of discussion and trading signals appearing on X platform (such as the 292x return signal provided by DeBot). Liquidity pools on exchanges like Raydium and Meteora grew rapidly, supporting high trading volumes and price increases.
The real climax occurred between May 13 and May 14, with the market cap rising to $5.5 million in the morning and directly surpassing $55 million in the afternoon. By the 14th, it briefly approached a $70 million market cap, with the trading volume soaring to $59 million. Some community members even posted screenshots claiming an increase of +85,000%, creating a new myth out of the ruins.
As of 1:30 pm on May 14, the price stabilized around $0.039, with a total market cap and FDV both around $39.6 million, and a 24-hour trading volume of $5.43 million. Active platforms include XT.COM, LBank, Meteora, and others.
Although there was a slight pullback from the peak ($0.07), the coin's popularity remains strong. For a coin that relies purely on "irony + community + X post" to thrive, this performance is already at a stellar level.
Currently, the background of the token's development team is not transparent, increasing the potential risk of a rug pull. Rugcheck.xyz warns that the creator of the GOONC contract may have permission to modify the contract (e.g., change fees or mint additional tokens), posing certain security risks.
Community members speculate that the meteoric rise of GOONC may be the "last hurrah".
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.
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Binance Sparks "Delist Concept": Can CEX Still Produce the Next ALPACA?
On April 24, Binance announced that it would delist four tokens, including Alpaca Finance ($ALPACA), on May 2, and cease trading of these pairs' perpetual futures contracts at 00:00 on May 1, 2025, Beijing time. Fast forward to the last day of perpetual futures trading delisting, ALPACA surged on the liquidation heat map. Over the past 24 hours, a total of $52.21 million evaporated in ALPACA's contract trading, exceeding the sum of the token's liquidation volume over the past two years.
Historically, when a token is listed on Binance, many traders would buy the news instantly ("Buy the News"). As the Binance listing effect gradually waned, traders found another path, which is to short sell the tokens set to be delisted from Binance ("Sell the News"). This strategy often has a very high success rate. However, as traders followed this path, they encountered the Alpaca on their short-selling journey.
Every thrilling market manipulation game requires careful preparation. Before Binance's official announcement, on April 10, $ALPACA was ranked 7th in the preliminary list of the second batch of "Vote for Delisting" on Binance, causing its price to plummet almost by half. However, in the five days leading up to Binance's official announcement, from April 19 to April 23, trading volume suddenly surged.
The story traces back to the start of Binance's second round of "Vote for Delisting," where ALPACA was included in the delisting candidates list, ranked 7th among 17 projects. After the completion of Binance's delisting vote count, $ALPACA was included in the projects to be delisted. The market did not react significantly, price fluctuations were not substantial, but trading volumes expanded abnormally, suggesting the entry of "manipulative funds" into the community.
On April 24, Binance officially announced the delisting of the $ALPACA spot trading pair on May 2 and the settlement of the futures contracts on April 30. Following the announcement, the spot price of $ALPACA dropped from $0.0329 to $0.029, with a market cap of only about $5 million. However, what followed were two price "rollercoaster" moments; within an hour, the price surged from $0.029 to $0.0857, an increase of about 195%, only to rapidly drop back to $0.04 within 3 hours. Shorts were caught off guard, and the open interest of contracts surged rapidly, initiating the "long and short grinder" mode.
On April 25, Alpaca Finance officially announced that the trading volume in the past 24 hours had exceeded 1 billion tokens. The liquidity provider had suggested a "minting for stability" to be returned to the treasury after a decrease in trading volume. However, as public opinion began to ferment, opposition filled the community. Alpaca Finance deleted the previous tweet and posted a new one at 9 p.m. on the same night, announcing the cancellation of the minting due to community opposition.
On April 26, Binance amended the contract funding rate rules, shortening the maximum rate cap settlement period to hourly and setting it at up to ±2%. Some high-leverage accounts continued to hold short positions against the high rate and were liquidated. Millions of dollars disappeared within a few hours, with $13 million in short positions vanishing on a token with a market cap of less than $30 million.
With the establishment of this short-selling trend, the price skyrocketed nearly 12 times from a low of $0.029 to $0.3477 within 3 days. The contract's open interest surged significantly, especially with a notable increase in short positions, resembling a microcosm of the Wall Street battle of GME's retail investors. However, this time, the retail investors' opponents could continue to mint additional chips.
From April 26 to April 29, these days were relatively calm, with the price fluctuating around $0.2 to $0.34. On April 29, Binance announced another increase in the rate cap to ±4%. Theoretically, such a high rate would severely impact short positions. If the rate remains at -4%, the bears will face a 96% "cost of ruin" after holding a short position for 24 hours. However, miraculously, the price plummeted from $0.27 to $0.067.
On April 30, with the contract delisting and liquidation scheduled in the final 24 hours, the price continued to experience intense fluctuations. ALPACA's attention peaked, with its highest price reaching $1.2 at one point. From a week before the delisting announcement to the eve of the contract delisting, ALPACA's price surged 40 times, creating an independent market for the token delisted by Binance. The total liquidation volume across the network also reached $50 million, with $42 million in "bearish fuel" beneath the price surge.
After the first surge of ALPACA, Heyi, the co-founder of Binance, replied to a netizen asking, "Can the teacher who buys the shell guarantee breakeven?" This has also triggered endless speculation among community members.
KOL Tunbtc believes that Heyi's reply to this matter was the starting point of ALPACA's surge. "The large holders of Alpaca's native token, by transferring spot chips, operating rights, and distribution rights, have pledged allegiance to Binance's deep-water core interest circle, allowing it to fully harvest market liquidity before delisting, slaughtering opposing positions." Through a triple path of fees, contract liquidations, and spot volatility, they converted user attention into profits.
He also called on Binance to thoroughly investigate this matter, clarify which market maker is manipulating the candlestick patterns, as ALPACA saw an 18x surge within 24 hours with users liquidated of tens of millions of dollars, while previously GPS's 500% surge was promptly halted, and expressed his sentiment: "All of this is thought-provoking."
Wenze, the founder of Beta Capital, believes that bypassing the regular listing process, buying shells, renaming, and restarting has crossed Binance's bottom line of maintaining listing credibility and brand compliance. Binance sometimes has a high tolerance for market fluctuations, and the OM issuance only adjusts the collateralization ratio, with many projects only allowed for leveraged trading. However, once the project, such as these "shell projects," is identified, it is easily labeled for observation, triggering a vote for delisting, ultimately leading to delisting rather than using mild measures.
Renowned KOL Rui, "YeruiZhang," likened the ALPACA incident to "crazy revenge on an ex" and shared a piece of insider information, claiming that the original whale behind ALPACA was a team that controlled BSC's MEV for a period of time and expressed dissatisfaction with Binance's current management for some reason. The comments section is rampant with speculation that it is BSC's whale 48CLUB, and 48CLUB's Ian even personally appeared to eat "his own melon."
With the recent buzz around VOXEL's surge and the wealth effect and discussion surrounding ALPACA, more and more "delisting concepts" have emerged. This concept does not necessarily refer to tokens that have already been delisted but rather shares some common characteristics of delisted tokens.
Famous KOL Chuanmo recently shared on Twitter his logic for choosing concept tokens and listed several tokens, all of which experienced varying degrees of price increase after his recommendation.
His "Concept Delisting" strategy involves selecting low-cap tokens from Bybit and Binance, arranging them by market cap from lowest to highest, with almost 100% price increase for the tokens with the highest holdings/circulating market cap. He buys three tokens daily following this order with a fixed amount, and based on the holdings/circulating supply ratio, he removes tokens that no longer meet the criteria daily and continues to buy the new top three tokens.
Many community members have tested this strategy, with some creating helpful tools. The dreamer Disney "discountifu" has created a dashboard, and Vivek10 early bird "vivekw_eth" has developed a monitoring and alert system that can be directly pushed to WeChat with a copyable link, although it is currently deployed locally and not yet entirely stable.
However, when using tools created for free by community members, please be cautious. While there are many enthusiastic contributors in the community, there are also many uncertain factors in this dark forest.
In an increasingly insular market, retail investors not only have to contend with whales and other retail investors but also must bear many unstable elements. The recent ALPACA incident serves as a warning to us. Whether it's a primary or secondary listing on a top-tier exchange or the "Concept Delisting" approach, we need to make rational asset allocations amidst FOMO to protect our principal and reach the other shore.
The mention of all tokens above does not constitute financial investment advice "NFA".
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$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.
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