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From Tariffs to Crypto Asset Strategic Reserve: Analyzing the Crypto New Order of the Trump Era
Original Title: "Crypto Market Macro Report: From Tariffs to Crypto Asset Strategic Reserves, The Crypto Order of the Trump Era"
Original Source: Huobi Crypto Academy
Introduction: The New Crypto Market Order of the Trump Era
By 2025, the global financial market witnessed a new wave of changes. With Trump back in the White House, continuing his consistent economic nationalism policies, implementing tariffs, reshaping the supply chain, and strengthening the dominance of the US dollar, various policies were put in place. Simultaneously, as the US fiscal deficit continued to expand, the global trend of "de-dollarization" intensified, and the rise of the crypto asset market worldwide, the Trump administration's stance on cryptocurrency has undergone significant changes.
Against this backdrop, the concept of crypto asset strategic reserves has gradually come to the forefront and become a focal point of market attention. This report will delve into the impact of Trump administration's tariff policy on the global financial market and how its potential drive for crypto asset strategic reserve plans may affect the market performance of mainstream cryptocurrencies such as Bitcoin, Ethereum, and more. Additionally, we will analyze potential changes in regulatory policies, adjustments in institutional investors' asset allocation strategies, and the future development direction of the overall crypto market.
1. The Macro Background of Trump's Economic Policy and the Crypto Market
1.1 Tariff Policy: Reshaping the Global Economic Order and Capital Market Impact
Trump's economic policy has always been centered around "America First," a strategy that not only influenced the domestic economic landscape of the United States but also fundamentally changed the operating mode of the global capital markets and financial system. The Trump administration implemented a series of significant economic policies during the period of 2017-2021, including large-scale tax cuts, aggressive trade wars, pressure on the Federal Reserve, and control of dollar liquidity.
These policies fueled short-term economic growth in the United States but also led to a long-term increase in fiscal deficits and economic instability internationally. In 2025, with Trump being re-elected, the market generally expected his government to continue or even strengthen its past economic policies, especially in terms of tariff policies, US dollar strategies, fiscal stimulus, regulatory environment, and global capital flows, all of which will have a profound impact on the crypto market.
In the increasingly decentralized global economic system, the crypto market has gradually become an important part of the international financial system. Mainstream crypto assets like Bitcoin and Ethereum are not only seen as investment targets but are also considered by some countries and institutions as assets to hedge against the US dollar risk. The application of stablecoins (such as USDT, USDC) in international trade settlements is also increasing, driving the digitization of the US dollar.
The economic policies of the Trump administration will have a profound impact on these trends. Its tariff policy may accelerate global capital allocation to cryptocurrencies such as Bitcoin, liquidity management of the U.S. dollar will affect the funding supply of the crypto market, U.S. regulatory policies will determine the legitimacy and development space of the crypto market, and a strategic reserve plan for crypto assets that Trump may promote is more likely to trigger a global market transformation.
One of the core economic policies of the Trump administration is its highly aggressive trade policy. The outbreak of the U.S.-China trade war in 2018-2019 led to a global supply chain restructuring and significant changes in capital flows. Faced with a new economic landscape in 2025, Trump is likely to reignite the trade war, imposing tariffs on economies such as China, the European Union, and Japan, attempting to re-establish America's manufacturing competitiveness through external pressure. The direct consequence of this policy will be increased uncertainty in the international capital markets, with global investors seeking safe-haven assets, and decentralized assets such as Bitcoin may become new safe-haven tools in this environment.
In fact, during the peak of the trade war in 2019, when Bitcoin's price surged from $3,000 to $13,000, the market widely believed that capital was flowing into the crypto market as a hedge against traditional market risks. The escalation of the trade war in 2025 may once again drive similar capital flow trends, especially against the backdrop of a damaged U.S. dollar credit system, making Bitcoin's attractiveness even stronger.
In addition to the impact of the trade war on the global capital markets, the fiscal policy of the Trump administration is also a key factor influencing the crypto market. In 2017, Trump implemented a large-scale tax cut policy, reducing the corporate tax rate and increasing the government's fiscal deficit. In 2025, Trump may take similar measures to stimulate U.S. economic growth, including further corporate tax cuts, large-scale infrastructure investments, and increased military spending.
These policies may boost the U.S. economy in the short term, but they will also exacerbate the fiscal deficit and put pressure on the U.S. dollar credit system. An increase in the fiscal deficit usually means the government needs to fill the funding gap through debt issuance or monetary easing, and if the market expects the Fed to resume quantitative easing (QE) in the future, market liquidity will increase, which is often favorable for Bitcoin and other crypto assets.
In fact, the ultra-loose monetary policy implemented by the Fed in 2020-2021 was one of the key drivers of the Bitcoin bull market. Therefore, if the Trump administration promotes a new round of fiscal stimulus and the Fed is somewhat compelled to ease its monetary policy, the market may usher in a new cycle of cryptocurrency price rallies.
1.2 U.S. Dollar Liquidity and the Cyclical Relationship with the Crypto Market
As the global reserve currency, the status of the US dollar may undergo changes under the Trump administration's policies. Trump has repeatedly expressed dissatisfaction with the strong dollar during his first term, believing that the dollar's overvaluation has harmed the competitiveness of US manufacturing. By 2025, the Trump administration may take measures to drive the dollar's depreciation to boost exports and reduce the trade deficit. If a trend of dollar depreciation is established, global investors may seek other assets to hedge against the risk of dollar devaluation, with Bitcoin, gold, and other safe-haven assets potentially becoming new directions for capital inflows.
Particularly on a global scale, some countries have begun exploring the process of de-dollarization. For example, Russia and China have reduced their reliance on the dollar in international trade, and Middle Eastern countries are also attempting to use the Renminbi or other currencies for oil settlements. If the Trump administration's policies accelerate the de-dollarization process, the global demand for decentralized assets like Bitcoin may further increase, propelling the crypto market into a new development stage.
The US domestic crypto regulatory policy may undergo significant changes during the Trump era. Trump's attitude toward crypto assets was somewhat ambiguous during his first term, with Treasury Secretary Mnuchin expressing a desire to strengthen regulation of the crypto market to prevent assets like Bitcoin from being used in illicit transactions. However, during the 2024 election process, Trump and his allies began showing a more positive attitude toward crypto assets, believing that Bitcoin and blockchain technology could bring new financial innovation and economic growth opportunities to the US.
In 2025, the Trump administration may adjust the US crypto regulatory framework, such as reducing the tax burden on crypto assets, easing legal restrictions on crypto transactions and investments, and supporting the further development of financial products like Bitcoin ETFs. If these policies are implemented, they will bring significant growth opportunities to the US crypto market and also have a demonstrative effect on global markets, prompting other countries to adjust their stance toward the crypto market.
It is worth noting that the Trump administration may push for the establishment of a "Cryptocurrency Asset Strategic Reserve Plan," incorporating Bitcoin and other crypto assets into the national reserve system. The proposal of this policy may be based on several factors, including combating dollar credit risk, seizing a dominant position in the global crypto market, and ensuring US leadership in the digital asset field in international competition.
If the US government decides to hold Bitcoin as a strategic reserve asset, Bitcoin will experience unprecedented market recognition and may become a significant part of the global financial system. The impact of this policy will far exceed any ETF or institutional investment entry; it signifies formal recognition of Bitcoin at the sovereign nation level and may trigger follow-ups from other countries worldwide.
1.3 Institutional Investors' Reconfiguration of the Crypto Market
Over the past few years, institutional investors' acceptance of crypto assets has gradually increased. With the approval of Bitcoin ETFs and the entry of large financial institutions, crypto assets have gradually become part of traditional investment portfolios. If the Trump administration advances a crypto asset strategic reserve and relaxes restrictions on institutional investors holding crypto assets, the market structure will undergo significant changes. In the long run, this may lead to mainstream assets like Bitcoin and Ethereum entering more national and institutional investment portfolios, driving further market maturation.
Overall, the Trump administration's economic policies will have a profound impact on the crypto market. Trade wars may accelerate capital flows into crypto assets, fiscal deficits and dollar depreciation may increase demand for Bitcoin, and regulatory adjustments may further drive the development of the U.S. crypto market. If the Trump administration ultimately advances a crypto asset strategic reserve plan, Bitcoin may experience a historic institutional recognition, fundamentally altering the global financial system's landscape. Throughout this process, the market needs to closely monitor the specific policy direction of the Trump administration and the global capital markets' response to these policies to seize future opportunities for crypto market development.
II. Crypto Asset Strategic Reserve: Policy Background and Potential Impact
2.1 U.S. Government's Promotion of Crypto Asset Strategic Reserve: Policy Background
After returning to office in 2025, the Trump administration's core economic policy still revolves around "America First," which not only means re-evaluating the global reserve currency status of the U.S. dollar but may also indicate the government's consideration of diversifying part of the national reserves to hedge against dollar credit risk.
For a long time, the U.S. dollar, as the world's major reserve currency, has given the United States unparalleled influence in the global financial system. However, in recent years, with the rising U.S. debt levels, expanding fiscal deficits, adjustments in interest rate policies, and questioning of the U.S. dollar's dominant status by various countries, the dollar's reserve status is being challenged.
On the one hand, the U.S. government's fiscal deficit issue has become a focus of global market attention. Since 2020, the U.S. government debt levels have been surging, surpassing $34 trillion by the end of 2024 and still rapidly growing. This has weakened market confidence in the long-term value of the dollar, prompting countries to explore reserve assets beyond the dollar.
Since the Trump administration took office, to further drive fiscal stimulus and infrastructure investment, the U.S.'s fiscal deficit issue may worsen. If the market anticipates an increased risk of dollar depreciation, global central banks may accelerate adjustments to their reserve asset allocations, with decentralized assets like Bitcoin potentially becoming an alternative to the dollar.
On the other hand, the accelerated process of de-dollarization has also prompted the U.S. government to rethink how to maintain its financial hegemony. In recent years, many countries globally have reduced their reliance on the U.S. dollar in international trade settlement. For example, trade between Russia and China is gradually shifting towards local currency settlement, while countries like the UAE and India are exploring using the Renminbi or other currencies for oil trade settlement.
This trend has weakened the global influence of the U.S. dollar, leading the U.S. government to take new measures to uphold its dominant position in the global financial system. If the Trump administration views a strategic reserve of crypto assets as a new tool in global financial strategy, then Bitcoin may be formally incorporated into the U.S.'s official reserve system as a potential weapon against the de-dollarization of the global financial system.
Furthermore, the Trump administration's attitude towards the cryptocurrency market is gradually evolving. Although Trump openly criticized Bitcoin in 2019, calling it "based on thin air, without real value," his stance has notably changed during the 2024 election campaign. On the one hand, Trump's team is increasingly recognizing the potential of crypto assets in the future financial system and seeking support from the crypto industry. On the other hand, U.S. institutional investors have significantly increased their Bitcoin holdings in the past few years. Institutions such as BlackRock and Fidelity have launched Bitcoin spot ETFs, attracting billions of dollars in investments.
Against this backdrop, the U.S. government may realize that Bitcoin is no longer a marginal asset class but is becoming an integral part of the global financial system. If the U.S. government aims to dominate this market, establishing a "crypto asset strategic reserve" would be a strategic choice in line with its national interests.
2.2 Potential Impact of a Crypto Asset Strategic Reserve
Firstly, this policy could significantly alter the market's perception of Bitcoin's value and drive Bitcoin's price into a new valuation paradigm. The current market's primary pricing logic for Bitcoin is still based on its scarcity (21 million total supply), inflation hedge properties, and its role in the digital economy. However, if the U.S. government formally includes Bitcoin in its national reserves, this would mean that Bitcoin would transition from an "alternative asset" to a "national reserve asset," fundamentally changing its market perception. For decades, gold has been a significant part of global central bank reserves, and if Bitcoin is integrated into the same system, its market valuation could experience exponential growth.
The current global gold market is approximately $13 trillion, while the total market capitalization of Bitcoin is only around $1 trillion. If Bitcoin is granted a similar reserve function as gold, its market cap could reach at least 30-50% of the gold market, i.e., $4-6 trillion or more, with a corresponding Bitcoin price of over $200,000. This means that the U.S. government's policy decisions will directly impact Bitcoin's long-term value and could trigger a new bull run.
Secondly, the implementation of this policy will have a subtle impact on the US dollar's global reserve currency status. Traditionally, the US dollar's ability to become the primary global reserve currency has relied mainly on the strength of the US economy, the global liquidity of the dollar, and the stability of dollar-denominated assets (such as US Treasury bonds).
However, if the US government starts to include Bitcoin in its reserves, this could signal to the market that the US government itself is also considering US dollar credit risk and attempting to hedge through Bitcoin. This could intensify market concerns about the long-term stability of the US dollar and prompt other countries to adjust their reserve structures, encouraging more central banks to hold Bitcoin. Once this trend takes hold, it could potentially weaken the US dollar's global dominance and accelerate the multipolarization of the global financial system.
At the same time, the US government holding Bitcoin could also impact the global geopolitical landscape. Currently, some countries are already attempting to incorporate Bitcoin into their national financial strategies, such as El Salvador becoming the first country globally in 2021 to adopt Bitcoin as legal tender and gradually increasing its national Bitcoin reserves.
Additionally, countries like Russia and Iran are exploring the use of Bitcoin for international trade settlements to circumvent Western financial sanctions. If the US government takes the lead in action by including Bitcoin in its national reserves, other countries may have to make corresponding adjustments to avoid being in a passive position in future global financial system competition. This could lead to a global "national-level Bitcoin reserve race," thereby affecting the global financial landscape.
Finally, this policy could also trigger a chain reaction in the US domestic cryptocurrency market regulatory environment. Currently, cryptocurrency market regulation in the US remains relatively uncertain, with disagreements between the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission) on regulatory jurisdiction over cryptocurrency assets. However, if the US government decides to include Bitcoin in its national reserves, this would mean that Bitcoin's legal status could be formally established, driving further clarity in related regulatory frameworks. This could provide a clearer compliance path for the US cryptocurrency market, attract more institutional funds into the market, and further accelerate Bitcoin's mainstreaming process.
In conclusion, the US government's implementation of a "crypto asset strategic reserve" is not only a significant blow to the global financial system but may also fundamentally alter Bitcoin's market positioning and influence the direction of global capital flows. The implementation of this policy may cause significant market fluctuations in the short term, but in the long run, it could be a milestone event in Bitcoin's development history, ushering the global financial system into a new era.
Three, Future Market Outlook and Investment Strategy
3.1 Long-Term Trends and Future Prospects in the Cryptocurrency Market
The development path of the crypto market can be analyzed from various perspectives such as macroeconomic trends, policy environment, market structure changes, and technological advancements. The policy of the Trump administration may serve as a catalyst for driving a new bull market, but its long-term impact will depend on multiple variables, including the Federal Reserve's monetary policy, the evolution of global de-dollarization, the level of institutional investor participation, and the policy orientation of emerging markets.
Firstly, changes in the global financial environment will be a key factor influencing the long-term trend of the crypto market. The current global economy faces a series of challenges such as de-globalization, inflation pressure, interest rate uncertainty, and geopolitical conflicts, all of which may prompt more investors to view Bitcoin as a safe-haven asset.
Historical experience has shown that during periods of rising global uncertainty, traditional safe-haven assets like gold are often favored by the market, and Bitcoin is gradually acquiring a similar safe-haven function. If the U.S. government formally recognizes Bitcoin as a reserve asset, Bitcoin will gain further market trust and may potentially replace some market share of gold.
Secondly, the level of institutional investor participation will be a key variable determining the future market size of Bitcoin. In recent years, with the launch of Bitcoin spot ETFs, traditional financial institutions have begun to enter the crypto market on a large scale. For example, Bitcoin ETF products from giants like BlackRock and Fidelity have attracted billions of dollars in inflows, and if the U.S. government establishes a "crypto asset strategic reserve," more sovereign wealth funds, pension funds, and central banks may accelerate their Bitcoin allocations. This will further drive the maturity of the Bitcoin market, gradually transforming it from a high-volatility asset into a stable store of value tool.
Furthermore, the accelerated global de-dollarization process will also have a profound impact on the crypto market. Currently, economies including China, Russia, Iran, India, and other countries are actively exploring de-dollarization paths to reduce their dependence on the U.S. dollar.
If Bitcoin becomes part of the U.S. government's reserve assets, other countries around the world may have to reassess their attitude towards Bitcoin. Some countries may follow suit by increasing Bitcoin's share in their foreign exchange reserves, while others may choose to restrict Bitcoin transactions to maintain their currency stability. This policy game will directly affect the global liquidity of Bitcoin and may create arbitrage opportunities in certain markets.
3.2 Investment Strategy and Market Opportunity Analysis
Against the backdrop of profound changes in market structure, investors need to adjust their strategies to adapt to the new market environment. Whether individual or institutional investors, they need to consider how to optimize asset allocation in the new financial landscape and identify the most promising investment opportunities.
First, the investment thesis for Bitcoin is set to change. In the past, Bitcoin was primarily seen as a high-risk, high-return speculative asset, but in the future, it may be more commonly viewed as "digital gold" or a "central bank reserve asset." This means that Bitcoin's price volatility may gradually decrease, and long-term Bitcoin holders may enjoy stable value appreciation. For investors, adopting a "HODL" (Hold On for Dear Life) strategy may be the best way to navigate market changes, especially as Bitcoin's long-term value proposition gains greater support from government policies.
Second, structural arbitrage opportunities in the market may increase. With governments around the world having divergent policies towards Bitcoin, varying regulatory environments could lead to price disparities across different markets. For example, if some countries impose strict restrictions on Bitcoin trading while the U.S. government actively promotes Bitcoin reserve plans, significant price divergences may occur in the global market. Savvy investors can capitalize on these differences through cross-market arbitrage trading.
Furthermore, the role of the derivatives market will be further strengthened. Currently, Bitcoin futures, options, and other derivative markets are relatively mature, and with institutional investors entering the space, the market's demand for Bitcoin risk management will increase. In the future, we may see more sophisticated financial instruments introduced to the crypto market, such as Bitcoin-based bonds, structured products, and more. For professional investors, utilizing these tools for risk hedging and yield optimization will be a key trend in the future market.
On the other hand, apart from Bitcoin, other opportunities in the crypto asset market are also worth noting. While Bitcoin may become a primary national reserve asset, the ecosystems of smart contract platforms like Ethereum (ETH), Solana (SOL), and others are still rapidly expanding. If government and institutional funds start flowing into the crypto market on a large scale, these assets may also benefit. Particularly in the areas of Decentralized Finance (DeFi) and Real-World Asset (RWA) tokenization, new market opportunities may arise in the future. For instance, some countries may explore issuing blockchain-based government bonds or using smart contract technology to streamline financial transaction processes, all of which could create new investment opportunities for investors.
3.3 Risk Factors and Mitigation Strategies
Despite the potential long-term benefits that the Trump administration's policies may bring to the crypto market, investors still need to be aware of potential risk factors and develop corresponding mitigation strategies.
Firstly, policy uncertainty remains one of the biggest risks in the market. While the Trump administration may support a strategic reserve of crypto assets, the implementation of this policy still hinges on various factors, including congressional approval, the stance of the Federal Reserve, cooperation from the Treasury Department, and reactions from other global nations. If policy advancement is hindered, the market may experience significant fluctuations. Therefore, investors need to closely monitor policy developments and adjust their investment strategies accordingly.
Secondly, market liquidity risk is also an important consideration. Although the Bitcoin market has matured significantly compared to the past, its liquidity is still relatively low compared to traditional financial markets. If a government or a large institution were to suddenly adjust their Bitcoin holdings, the market could experience severe fluctuations. Therefore, investors should avoid over-leveraging and adopt a strategy of staggered buying or selling during periods of high market volatility to reduce market impact risk.
Additionally, geopolitical factors could also impact the crypto market. As global competition between countries intensifies, some nations may take measures to curb the use of Bitcoin. For example, China has strengthened cryptocurrency regulations several times in the past few years, and if the U.S. government were to push for a Bitcoin strategic reserve plan, other countries might take corresponding retaliatory measures. Investors need to consider this possibility and ensure portfolio diversification to mitigate risks from specific policy changes.
Lastly, technological risk remains a significant challenge for the crypto market. While the Bitcoin network itself is highly secure, the entire crypto industry still faces risks such as smart contract vulnerabilities, exchange security issues, hacker attacks, and more. Investors should choose exchanges with high security standards and take appropriate security measures, such as using cold wallets to store assets, diversifying investments across different asset classes, to reduce potential technological risks.
IV. Conclusion
Against the backdrop of a significant transformation in the global financial system, whether the U.S. government will formally include Bitcoin and other crypto assets in its national strategic reserves has become a focus of the market. With the Trump administration's changing attitude towards crypto assets and the acceleration of global de-dollarization, the possibility of establishing a "crypto asset strategic reserve" is gradually increasing.
If this policy were to be implemented, it would be one of the most disruptive changes in the global financial system in a century, potentially impacting the reserve status of the U.S. dollar, international financial gamesmanship, market liquidity, sovereign currency competition, and the perception of Bitcoin's value. Therefore, there is a need to deeply explore the potential motivations, policy background, global macro environment, and broad market impacts of the Trump administration's push for this policy.
Against the background of the Trump administration promoting the concept of a "crypto asset strategic reserve," the global financial markets are undergoing a profound structural transformation. Bitcoin and other crypto assets are transitioning from speculative investments to potential national reserve assets, gradually establishing their core position in the global financial system.
This trend will not only affect the crypto market itself but also have far-reaching implications for the global reserve currency status of the U.S. dollar, traditional financial markets, sovereign currency systems, and institutional and individual investment strategies. The crypto market is at a crucial stage where policy dividends and market challenges coexist. If the U.S. government formally includes crypto assets in its strategic reserves, core assets such as Bitcoin and Ethereum will have unprecedented development opportunities.
We advise investors to closely monitor policy changes and seek the best investment opportunities during market fluctuations. The Trump administration's proposed "Cryptocurrency Strategic Reserve" could become a key milestone in global financial system reform and propel the Bitcoin market into a new development stage. For investors, this policy could bring unprecedented market opportunities, but also comes with greater uncertainty.
In the future market environment, key factors for successful investment will include long-term Bitcoin holdings, monitoring policy developments, taking advantage of market arbitrage opportunities, optimizing portfolio structures, and managing market risks. As the global financial system evolves, cryptocurrencies will become an increasingly important asset class, and investors who can accurately grasp the trends will reap the greatest benefits from this transformation.
This article is contributed content and does not represent the views of BlockBeats.
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Never Underestimate the Significance of the US Stablecoin 'Infrastructure Bill'
If the US stablecoin bill, the "GENIUS Act," passes smoothly this time, its significance will be tremendous. I even think it's significant enough to enter the top five in Crypto history.
Although abbreviated as the GENIUS Act, which translates directly to the Genius Act, it is actually the Guiding and Establishing National Innovation for U.S. Stablecoins, which translates to "Guiding and Establishing National Innovation for US Dollar Stablecoins."
The proposal is lengthy, with several key points summarized for everyone:
· Mandatory 1:1 Full Asset Backing: Assets include cash, demand deposits, and short-term US Treasuries. At the same time, misappropriation and rehypothecation are strictly prohibited.
· High-Frequency Disclosure: Reserve reports must be published at least monthly, introducing external audits.
· Licensing Requirement: Once the circulating market cap of the issuer's stablecoin exceeds $100 billion, it must transition into the federal regulatory system within a specified timeframe, adopting banking-grade regulation.
· Introduction of Custody: The custodian of the stablecoin and its reserve assets must be a regulated qualified financial institution.
· Clear Definition as a Payment Medium: The bill explicitly defines stablecoin as a new type of payment medium, primarily regulated by the banking regulatory system, rather than restricted by the securities or commodities regulatory system.
· Embracing Existing Stablecoins: A maximum 18-month grace period after the bill's enactment, aimed at encouraging existing stablecoin issuers (such as USDT, USDC, etc.) to promptly obtain licenses or become compliant.
After finishing the main content, let's talk about the significance of this matter with an excited heart.
Over the years, when others asked, "After working in the Crypto industry for 16 years, what application have you created?"
In the future, you can confidently tell others—Stablecoins.
Some people have held opposing views. In the past, people's impression of stablecoins was that they were an opaque black box. Every few months, there would be FUD — whether Tether's assets were frozen or Circle had a significant black hole deficit.
In fact, if you think about it, Tether easily rakes in billions of dollars a year just from the interest on those underlying government bonds. Circle, slightly less, also made a $1.7 billion profit last year.
They basically made money while standing there. From a motivational standpoint, they have no malicious intentions. In fact, they are the most eager for compliance.
Now, this opaque black box will become a transparent white box.
In the past, the only complaint was that Tether's funds might have been frozen by the United States. Now, they will be directly placed into U.S. compliant custodial institutions, with high-frequency disclosures, so you can rest assured.
【No need to worry about a rug pull】 is such a huge advantage—I think especially all Crypto people understand this.
Stablecoins were once almost on the verge of being overtaken by CBDCs. In any country, if a central bank digital currency really exists, it is highly likely not built on a blockchain, at most it is built on some internal central bank consortium chain, which to be honest, is meaningless.
When CBDCs were at their peak, that was the most dangerous time for stablecoins.
If CBDCs had become a reality back then, stablecoins today would have been relentlessly suppressed into a dark corner, and blockchain would only be able to play a minimal role.
The remaining half-dead stablecoins would even have to learn the standards of central bank digital currencies, completely relinquishing their standard-setting power.
And now, stablecoins have won (or are about to).
Instead, everyone should learn the 【Blockchain + Token】 standard.
Nowadays, many blockchains actually have no meaningful applications on top, only stablecoin transfers. For example, with Aptos, the only scenario I use Aptos for is transfers between Binance and OKX.
And now, stablecoins will be legislated, what does that mean?
That's right, blockchain will become the only standard.
In the future, every stablecoin user will be the first to learn how to use a wallet.
As an aside, I actually think Ethereum's concerted push for EIP-7702 is quite forward-thinking. While other chains are all about memes, thank you Ethereum for sticking to account abstraction.
EIP-7702 is about Account Abstraction, which can support, for example:
· Social Account Registration Wallet
· Paying GAS with Native Coin
· And more
This paves the way for future new users to heavily use stablecoins, solving the last-mile problem.
Furthermore, once stablecoins receive legislative support, deposits and withdrawals will become even easier.
Let's imagine a scenario: previously, hindered by the gray nature of stablecoins, but after the bill passes, many traditional brokerages can support stablecoins themselves. The money from a US stock investor can be converted into stablecoins in minutes and instantly deposited into Coinbase. Believe it or not.
Let's imagine another scenario: if the brilliant bill smoothly passes through the House of Representatives, next, you will see:
Due to the extremely lucrative nature of this trading, existing stablecoin leaders and newly entering traditional giants will crazily start promoting their stablecoin products.
And an outsider, due to these promotions, will start using stablecoins. And then one day, after finding out that the wallet account has been created, will explore Bitcoin inside. Is mining Bitcoin difficult?
Stablecoins are a huge Trojan horse. The moment you start using stablecoins, you unwittingly step half a foot into the Crypto world.
As a large reservoir for digesting US debt, although stablecoins cannot directly absorb debt, they at least provide ammunition for the US debt secondary market. These functions are quite important, and slowly, stablecoins are becoming a part of the US debt market's body. Therefore, once the US legislation is passed and experiences the benefits, there is no turning back.
And, we are also confident that stablecoins are indeed one of the great innovations in our industry. People who have used stablecoins will find it hard to return to the traditional cash-banking system.
Once the bill is passed, users can't go back. In the future, concerns are about to be resolved, standards will be mastered, and the era of large deposits seems to be on the horizon.
Original Article Link
$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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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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Never Underestimate the Significance of the US Stablecoin 'Infrastructure Bill'
If the US stablecoin bill, the "GENIUS Act," passes smoothly this time, its significance will be tremendous. I even think it's significant enough to enter the top five in Crypto history.
Although abbreviated as the GENIUS Act, which translates directly to the Genius Act, it is actually the Guiding and Establishing National Innovation for U.S. Stablecoins, which translates to "Guiding and Establishing National Innovation for US Dollar Stablecoins."
The proposal is lengthy, with several key points summarized for everyone:
· Mandatory 1:1 Full Asset Backing: Assets include cash, demand deposits, and short-term US Treasuries. At the same time, misappropriation and rehypothecation are strictly prohibited.
· High-Frequency Disclosure: Reserve reports must be published at least monthly, introducing external audits.
· Licensing Requirement: Once the circulating market cap of the issuer's stablecoin exceeds $100 billion, it must transition into the federal regulatory system within a specified timeframe, adopting banking-grade regulation.
· Introduction of Custody: The custodian of the stablecoin and its reserve assets must be a regulated qualified financial institution.
· Clear Definition as a Payment Medium: The bill explicitly defines stablecoin as a new type of payment medium, primarily regulated by the banking regulatory system, rather than restricted by the securities or commodities regulatory system.
· Embracing Existing Stablecoins: A maximum 18-month grace period after the bill's enactment, aimed at encouraging existing stablecoin issuers (such as USDT, USDC, etc.) to promptly obtain licenses or become compliant.
After finishing the main content, let's talk about the significance of this matter with an excited heart.
Over the years, when others asked, "After working in the Crypto industry for 16 years, what application have you created?"
In the future, you can confidently tell others—Stablecoins.
Some people have held opposing views. In the past, people's impression of stablecoins was that they were an opaque black box. Every few months, there would be FUD — whether Tether's assets were frozen or Circle had a significant black hole deficit.
In fact, if you think about it, Tether easily rakes in billions of dollars a year just from the interest on those underlying government bonds. Circle, slightly less, also made a $1.7 billion profit last year.
They basically made money while standing there. From a motivational standpoint, they have no malicious intentions. In fact, they are the most eager for compliance.
Now, this opaque black box will become a transparent white box.
In the past, the only complaint was that Tether's funds might have been frozen by the United States. Now, they will be directly placed into U.S. compliant custodial institutions, with high-frequency disclosures, so you can rest assured.
【No need to worry about a rug pull】 is such a huge advantage—I think especially all Crypto people understand this.
Stablecoins were once almost on the verge of being overtaken by CBDCs. In any country, if a central bank digital currency really exists, it is highly likely not built on a blockchain, at most it is built on some internal central bank consortium chain, which to be honest, is meaningless.
When CBDCs were at their peak, that was the most dangerous time for stablecoins.
If CBDCs had become a reality back then, stablecoins today would have been relentlessly suppressed into a dark corner, and blockchain would only be able to play a minimal role.
The remaining half-dead stablecoins would even have to learn the standards of central bank digital currencies, completely relinquishing their standard-setting power.
And now, stablecoins have won (or are about to).
Instead, everyone should learn the 【Blockchain + Token】 standard.
Nowadays, many blockchains actually have no meaningful applications on top, only stablecoin transfers. For example, with Aptos, the only scenario I use Aptos for is transfers between Binance and OKX.
And now, stablecoins will be legislated, what does that mean?
That's right, blockchain will become the only standard.
In the future, every stablecoin user will be the first to learn how to use a wallet.
As an aside, I actually think Ethereum's concerted push for EIP-7702 is quite forward-thinking. While other chains are all about memes, thank you Ethereum for sticking to account abstraction.
EIP-7702 is about Account Abstraction, which can support, for example:
· Social Account Registration Wallet
· Paying GAS with Native Coin
· And more
This paves the way for future new users to heavily use stablecoins, solving the last-mile problem.
Furthermore, once stablecoins receive legislative support, deposits and withdrawals will become even easier.
Let's imagine a scenario: previously, hindered by the gray nature of stablecoins, but after the bill passes, many traditional brokerages can support stablecoins themselves. The money from a US stock investor can be converted into stablecoins in minutes and instantly deposited into Coinbase. Believe it or not.
Let's imagine another scenario: if the brilliant bill smoothly passes through the House of Representatives, next, you will see:
Due to the extremely lucrative nature of this trading, existing stablecoin leaders and newly entering traditional giants will crazily start promoting their stablecoin products.
And an outsider, due to these promotions, will start using stablecoins. And then one day, after finding out that the wallet account has been created, will explore Bitcoin inside. Is mining Bitcoin difficult?
Stablecoins are a huge Trojan horse. The moment you start using stablecoins, you unwittingly step half a foot into the Crypto world.
As a large reservoir for digesting US debt, although stablecoins cannot directly absorb debt, they at least provide ammunition for the US debt secondary market. These functions are quite important, and slowly, stablecoins are becoming a part of the US debt market's body. Therefore, once the US legislation is passed and experiences the benefits, there is no turning back.
And, we are also confident that stablecoins are indeed one of the great innovations in our industry. People who have used stablecoins will find it hard to return to the traditional cash-banking system.
Once the bill is passed, users can't go back. In the future, concerns are about to be resolved, standards will be mastered, and the era of large deposits seems to be on the horizon.
Original Article Link
$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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