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WE-Launch
This Week in Review | US Imposes Additional Tariffs Leading to Market Plunge; Blockchain Gaming Projects Face Financial Crisis
BlockBeats will summarize the industry's key news content for the week (3.31-4.6) in this article and recommend in-depth articles to help readers better understand the market and grasp industry trends.
Important News Review
Trump's "Tariff" Hammer Falls: Imposes a Comprehensive 10% Tariff on All Imports and a 20% Retaliatory Tariff on the EU, and a 24% Tariff on Japanese Goods
On April 3, Trump announced in the White House Rose Garden that the U.S. would impose a comprehensive 10% tariff on all imports. The detailed tariff measures for each country are as follows: 46% tariff on Vietnam; 10% tariff on the UK; 31% tariff on Switzerland; 49% tariff on Cambodia; 36% tariff on Thailand; 30% tariff on South Africa; 32% tariff on Indonesia; 10% tariff on Brazil; 10% tariff on Singapore. A 20% retaliatory tariff will be imposed on the EU on a country-by-country basis; a 24% tariff will be imposed on goods imported from Japan. Due to the 10% comprehensive tariff, which was at the low end of the previous expectations (10%-20%), Bitcoin briefly surged by 2.7% that evening, breaking through $88,000. However, after the detailed tariff announcement, Bitcoin quickly fell by 3.35%, Nasdaq futures plummeted, widening the decline to 1.2%, and the U.S. Dollar Index (DXY) also experienced a 0.5% fluctuation. Additionally, it is worth noting that energy commodities are exempt from Trump's comprehensive tariff, including crude oil, natural gas, and refined oil products.
On the same day, U.S. Treasury Secretary Benson wrote, "I suggest that all countries refrain from taking retaliatory action. We can see if there will be a different lower limit for tariffs (from the announced numbers). Trump's mindset might be to temporarily stabilize things. I was not part of the negotiations, but we will see if there are any negotiations before April 9 (the effective date of retaliatory tariffs)." Previously, senior White House officials stated that the base tariff rate (10%) would take effect early on April 5, and the retaliatory tariffs would take effect early on April 9. Related Readings: "U.S. Stock Market Evaporates $2 Trillion in 15 Minutes, Is the 'Retaliatory Tariff' the Last Straw for the Bull Market?", "How Do Tariffs Stir Up Cryptocurrency Prices?"
Justin Sun Accuses FDUSD Issuer First Digital Trust of Bankruptcy, FDUSD Temporarily Plummets Below $0.8; Latter Denies Allegations
On April 2, Justin Sun posted on social media claiming that the FDUSD issuer, First Digital Trust (FDT), had actually gone bankrupt and was unable to fulfill customer fund redemption obligations. He strongly advised users to take immediate action to protect their assets. Subsequently, FDUSD temporarily plummeted below $0.9. As a result, several FDUSD-related trading pairs on Binance experienced extreme price surges: BTC reached a high of 98,950 FDUSD, and ETH reached a high of 2165 FDUSD. Since FDUSD is the new stablecoin supported by Binance after BUSD was delisted, Binance, as the primary use case, responded to this news by stating that a 1:1 redemption is possible.
In the early hours of the 3rd, Justin Sun once again posted stating that this FUD was only directed at FDT and not at Binance. At noon on the 3rd, First Digital issued a statement denying Sun's claims, mentioning that the initial redemptions after the FUD had already been processed. FDUSD is still fully backed at a 1:1 ratio, its redemption channels are operating smoothly, and all redemption requests will continue to be processed promptly.
According to reports from Hong Kong media, Wu Kit-chee, Chairman of the Web3 and Virtual Asset Development Subcommittee of the Hong Kong Legislative Council, responded to the dispute between Justin Sun and FDT by suggesting that regulatory systems should be reviewed as soon as possible. Wu Kit-chee stated that due to the current lack of regulated custodianship, Web3 companies rely on trust companies to help third parties custody assets. While conducting this properly is not an issue, there are individuals who may take advantage of this gap to engage in illegal activities, raising concerns about trust in Hong Kong's financial center. He recommended that the authorities should do more in terms of education and review to optimize the existing framework.
On April 3, during a live press conference, Justin Sun stated, "We have over $500 million USD deposited in FDT but cannot withdraw." He also called on FDT to hire a third-party auditing firm to conduct an audit, believing that the audit results would show FDT is insolvent. He further mentioned that due to FDT's failure to pay investment interest in 2023, Techteryx conducted an investigation and found a significant amount of client funds had been misappropriated. Justin Sun personally provided assistance to Techteryx to ensure TUSD had sufficient liquidity to protect the interests of all TUSD holders. TrueCoin was implicated in colluding with FDT and illegally transferring $456 million USD of TUSD reserves to a company in Dubai. Justin Sun stated, "I will provide a $50 million reward to law enforcement agencies and tipsters to recover the $456 million USD." First Digital later responded to the allegations stating that the dispute only involved TUSD and was completely unrelated to FDUSD. First Digital has more than enough liquidity to meet its obligations. It also described this as a typical smear campaign by Justin Sun aimed at undermining its business competitors. Related Reading: "FDUSD Depegging Crisis: Justin Sun Accuses FDT of Embezzling $456 Million, Latter Denies Insolvency"
Multiple Meme Tokens Experience Ongoing Sell-off This Week, with ACT Dropping Over 70% in 7 Days; Community Questions Possible Market Maker and Binance Leverage Adjustment Connection
On April 1st, several meme tokens experienced a sharp decline in prices, with ACT plummeting over 50% briefly; DEXE dropping over 28% briefly; and DF plunging over 17.7% briefly, among others. This sell-off was triggered by a large number of short-term sell orders, leading to a significant increase in spot trading volume. Subsequently, crypto influencer Benson Sun analyzed in a post stating, "ACT suddenly flash crashed by 50%, as Binance adjusted ACT's leverage position limit, allowing a maximum position of only $4.5 million at 1x leverage. Some market makers' positions exceeded the limit, leading to liquidation at market price, causing a collapse in the contract price and a massive price spread between the contract and spot markets, resulting in a cascade sell-off in the spot market as well." Wintermute's founder and CEO, Evgeny Gaevoy, responded to community skepticism claiming, "The flash crash was initiated by Wintermute's dumping," stating, "It has nothing to do with us, but I'm curious to know what happened in the aftermath analysis." He also added, "If you ask me to guess, we reacted only after the price violently fluctuated, arbitraging the AMM pools."
In the early hours of April 2nd, Binance responded to the sudden fall in prices of certain meme coins like ACT, stating, "Upon preliminary investigation, we found that individual low-market-cap tokens experienced a cascading drop event, including 3 VIP users engaging in roughly $514,000 USDT worth of token cross-market sell-offs within a short period and a non-VIP user transferring a large amount of ACT from another platform, selling around $540,000 USDT worth of tokens on the spot market in a brief timeframe. As prices dropped, some users' futures contracts were liquidated, leading to a drop in other tokens as well." It is worth noting that in the following days, tokens such as MASK, LEVER, TROY, CATI, among others, once again experienced a significant volume-driven decline, with trading volume spiking 5 to 10 times higher than usual. Related Read: "ACT Flash Crash Night: When Exchange 'Circuit Breaker' Turns into a Bearish Bullet"
zkLend Hacker Accidentally Clicks on Phishing Site, Resulting in the Theft of 2930 ETH; Hacker Requests Collaboration with zkLend to Attempt Fund Recovery
On April 1st, according to Slow Mist monitoring, the zkLend hacker (from an incident in February) mistakenly clicked on a phishing website while attempting to use Tornado Cash, leading to the theft of 2930 ETH. The hacker then sent an on-chain message to zkLend, stating, "Hello, I intended to transfer the funds to Tornado Cash, but I mistakenly used a phishing site, and as a result, all funds were lost. I am devastated. I deeply apologize for the chaos and loss caused by this. All 2930 ETH has been taken by the operators of that site. I have no coins left in my possession. Please focus your efforts on those site operators to see if any funds can be recovered."
On the same day, the zkLend team released a statement indicating that the phishing website appears to have been operational for over 5 years. At this stage, the security team has no concrete evidence linking the phishing site to the attackers. As a precautionary measure, zkLend has incorporated these new wallet addresses from the phishing site into its fund tracking efforts for real-time monitoring and has been in contact with CEX and authorities. The team will continue to actively track these funds. Related reading: "zkLend Hacker Also Hacked, Is the On-Chain Apology Truly Remorseful or Staged?"
Bitcoin and Ethereum Record Worst Quarterly Returns in 7 Years; Bitcoin Q2 Average Return 24.86%, Poor Performance with More Declines than Increases in the Past Five Years
On April 1, according to HTX market data, Bitcoin had a first-quarter return of -11.82%, and Ethereum had a first-quarter return of -45.41%, marking their worst performances to date since 2019. In 2018, Bitcoin saw a first-quarter return of -49.7%, and Ethereum had a first-quarter return of -46.61%. Additionally, historical data indicates that Bitcoin typically performs well in the second quarter, with a 12-year average quarterly return of 24.86% and a median quarterly return of 7.19%. However, its performance has been lackluster in the past five years as follows: a 42.33% increase in Q2 2020, a 40.36% decline in Q2 2021, a 56.2% decline in Q2 2022, a 7.19% increase in Q2 2023, and an 11.92% decline in Q2 2024. In April over the past 12 years, Bitcoin has seen 7 increases and 5 declines, with a monthly average return of 12.03% and a monthly median return of 2.81%. However, its performance has been mediocre in the past five years with: a 34.26% increase in April 2020, a 1.98% decline in April 2021, a 17.3% decline in April 2022, a 2.81% increase in April 2023, and a 14.76% decline in April 2024.
Coinbase Stock Price Declines 33% in Q1, Marks Worst Quarter Since FTX Crash
On April 1, the publicly traded U.S. cryptocurrency exchange Coinbase experienced its worst quarter performance since the 2022 FTX exchange crash, with its stock price declining by 33% in the first quarter of 2025. Despite strong revenue expectations, Coinbase's stock price still suffered. Coinbase is expected to release its 2025 financial data in early May. The company's recent shareholder letter indicated that as of February 11, the company had generated approximately $750 million in transaction revenue and expects subscription revenue to be between $685 million and $765 million. While Coinbase has not yet disclosed first-quarter profit data, MarketBeat analysis estimates its profit to be around $1.87 billion. Coinbase is not alone as most publicly listed crypto companies reported similar results in the first quarter of 2025. Leading crypto mining company Marathon Digital Holdings saw its stock price near $17.5 at the beginning of the first quarter and closed at $11, a loss of over 37%.
Ethereum's Market Cap Falls Below McDonald's, Drops to $218.73 Billion This Week
On March 30, according to 8marketcap data, Ethereum's market cap dropped to $218.73 billion, with a 7-day decrease of 9.98%, ranking it 68th on the global asset market cap list. McDonald's surpassed Ethereum with a market cap of $219.4 billion, placing it 67th on the global asset market cap list.
OpenAI Completes $40 Billion Funding Round, SoftBank Leads
On April 1, according to CNBC, OpenAI completed a $40 billion funding round, bringing its post-investment valuation to $300 billion (including new capital). According to CB Insights data, this valuation makes OpenAI one of the highest-valued private companies globally, second only to SpaceX at $350 billion, alongside TikTok's parent company ByteDance. This round of funding was led by SoftBank from Japan, with an investment of $30 billion, and received support from a group of other investors, including key investor Microsoft, as well as institutions like Coatue, Altimeter, and Thrive. Sources revealed that the initial investment was $10 billion, with the remaining $30 billion expected to be in place by the end of 2025. However, this round of funding comes with a condition: if OpenAI fails to restructure into a profitable entity by December 31, 2025, the funding amount may be reduced by up to $10 billion.
F2Pool Co-Founder Wang Chun Takes SpaceX Crew Dragon on April 1 for 6th Manned Space Mission, Serving as Commander
On March 31, the SpaceX Crew Dragon began its sixth manned space mission (Fram-2) on April 1, marking humanity's first polar orbit manned spaceflight lasting 3 to 5 days. The launch took place from Launch Complex 39A at Kennedy Space Center in Florida, USA, on April 1. The crew for this mission consists of 4 astronauts, namely F2Pool co-founder Wang Chun, Janick Michelsen, Labéaurogue, and Anärykphillips. Wang Chun's team independently funded nearly $200 million for this flight plan, making it the first privately contracted polar orbit mission in commercial spaceflight history, with Wang Chun serving as the mission's commander. The spacecraft will enter a polar orbit with an inclination of 90° at an altitude between 425 and 450 kilometers. It will travel along the polar orbit, flying from over the South Pole to the North Pole, and then back from the North Pole to the South Pole, repeating this path. Related Read: "From Bitcoin Miner to Polar Astronaut: Wangchun's Magical Realism Rags-to-Riches Story"
Elon Musk Clarifies US Government Has No Plans to Use Dogecoin
On March 31, Elon Musk, during the "America PAC" town hall meeting held in Green Bay, Wisconsin on March 30, stated that the US government has no plans to use the cryptocurrency Dogecoin. He pointed out that the federal "Department of Government Efficiency (D.O.G.E.)" is not associated with Dogecoin, saying "they are just namesake, the government is not going to use Dogecoin, at least not that I know of." Despite this, the D.O.G.E. official website briefly displayed Dogecoin's Shiba Inu mascot in February, sparking market speculation about the government's relationship with cryptocurrency and driving DOGE up by 14%, with a market cap exceeding $580 billion. Related reading: "Musk Denies Relationship Between DOGE and US Government, Is Dogecoin Really Over?"
Bitcoin Development Group BitcoinDev Email List Gets Google "Permanently Removed"
On April 3, Bitcoin developer Ruben Somsen wrote that the Bitcoin Development Group BitcoinDev's email list was "permanently removed" by Google. Ruben had previously stated, "To my knowledge, no inappropriate content has been posted." An update later stated, "It turns out we did receive more information, but it was all thrown into the spam folder (the irony). It's clear we have been 'permanently removed.' What was our fault? We were deemed 'unwanted content.' Really, Google? Is open-source development 'unwelcome'? It looks like we have to migrate again." Block CEO Jack Dorsey has retweeted in support of Ruben Somsen's tweet and questioned Google CEO Sundar Pichai.
Treasure Faces Restructuring Due to Financial Crisis, to End Game Operations and Treasure Chain
On April 3, John, the Chief Contributor of the blockchain gaming ecosystem Treasure DAO, announced that due to worsening financial conditions, they are facing restructuring and will terminate game operations and the Treasure Chain. Documents show that their annual operating expenses are as high as $8.3 million, while the current treasury holds only $2.4 million, originally estimated to be sustainable only until July 2025. John, the Chief Contributor, has resumed a leadership role, revealing that the team once reached 40 people, with annual personnel costs of $6.1 million and infrastructure costs of $3 million, including a fixed annual cost of $450,000 for the Treasure Chain. Faced with survival pressure, the DAO has laid off 15 people, decided to terminate game issuance support and the Treasure Chain, and assist partners in migrating to other chains.
To extend the runway, John proposed withdrawing $785,000 in idle funds from the liquidity provider Flowdesk. If approved, the stablecoin balance will increase to $3.2 million, and operations can be optimistically extended until February 2026. Additionally, the ecosystem fund holds 22.3 million MAGIC tokens (valued at $2.3 million), but if the MAGIC price experiences a sharp decline, the DAO may struggle to continue between December of this year and February of next year. The future strategy will focus on four main products: Market, Bridgeworld, Smolworld, and AI Agent Expansion Technology, aimed at showcasing the utility of MAGIC through Smols and Bridgeworld and developing the Neurochimp agent to enhance market competitiveness.
Blockchain Game Developer Neon Machine, Behind Chain Game Shrapnel, Faces Financial Crisis
According to Blockworks, the cryptocurrency shooting game "Shrapnel" developer Neon Machine is in a severe financial predicament. The company has now depleted nearly $86.9 million in operating funds. Despite generating $21.7 million in revenue in 2024, a net loss of $11.4 million was incurred due to $33 million in operating costs.
The company is currently burning $2-3.5 million per month, with cash reserves depleted and owing external vendors millions of dollars in debt. A new round of financing planned for early 2025 has failed to materialize. The company has already gone through at least three rounds of layoffs, reducing the workforce from nearly a hundred people to just over ten, with the Seattle headquarters closed at the end of March. Despite the concerning financial situation, Neon Machine still publicly claims to be in its "strongest state ever" and plans to globally launch "Shrapnel" by the end of 2025. However, insiders are skeptical of this assertion.
Social App Phaver Shuts Down Operations Due to Fund Depletion, Token Price Plummets by 99%
The social media app Phaver has ceased operations, with its token price plummeting by 99% since the September 2024 TGE. Phaver team members cited several reasons for the shutdown: first, technical issues during the TGE and airdrop prevented users from timely claiming their tokens, leading to FUD; second, Phaver spent over $1 million to list on five CEXs; and third, due to the depressed market sentiment, the team did not sell tokens during the TGE, resulting in insufficient operational funds.
As a Finnish company, Phaver still needs to pay severance costs equivalent to 1 to 2 months' salary to its employees. Some former team members are now developing SocialDAO to explore new use cases for the SOCIAL token.
Binance Launches Second Round of Coin Listing Vote
On April 2nd, Binance announced the start of the second round of its Coin Listing Vote. The coins participating in this event include: VIRTUAL, BIGTIME, UXLINK, MORPHO, GRASS, ATH, WAL, SAFE, ZETA, IP, ONDO, PLUME. The voting period is from April 2, 2025, 21:30 to April 10, 2025, 07:59. During the voting period, users must be logged in with a verified account, hold at least 0.01 BNB in their main account for their vote to count. Each user can vote for up to 5 projects, with a maximum of one vote per project.
Binance Wallet Lists Two New TGEs: PumpBTC Oversubscribed by 327.56 Times; StakeStone Oversubscribed by 218.2 Times
On April 1st, Binance Wallet announced a joint TGE event with PancakeSwap for the AI-driven Bitcoin asset management solution, PumpBTC, with a subscription line of 3BNB. On the same day, PumpBTC unveiled the PUMP tokenomics, with a total supply of 1 billion tokens, 9% of which will be used for airdrops. The breakdown is as follows: Community Ecosystem 38%; Initial PUMP Claim 9%; Marketing 5%; Liquidity 3.5%; Contributors 19.5%; Investors 20%; IDO 5%. In the early hours of April 2nd, PumpBTC concluded its allocation and token distribution, with a final input of 406,023 BNB, oversubscribed by 327.56 times.
On April 3rd, Binance Wallet listed the StakeStone TGE, with a total fundraising amount of $1,000,000 in BNB, and an open subscription of 50,000,000 STO tokens (5% of the total supply). The final input was 369,445 BNB, oversubscribed by 218.2 times.
Cybersecurity Firm: Over 60 Crypto Hacking Incidents Worth $1.63 Billion Happened in Q1 2025
On April 1st, according to a cybersecurity firm's monitoring, there were over 60 cryptocurrency hacking incidents in the first quarter of 2025, resulting in a total loss of $1.63 billion, a 131% increase from the first quarter of 2024's $706 million. In March 2025, there were 20 cryptocurrency hacking incidents, with losses totaling $33.46 million, including a $5 million hack affecting 1inch, of which 90% has been recovered.
Trump's Sons Form Mining Company American Bitcoin in Partnership with Hut 8 Mining
On March 31, according to WSJ, the Trump family is actively advancing its cryptocurrency strategy, this time targeting Bitcoin mining. The president's two sons are investing in a Bitcoin mining company, further expanding the Trump family's footprint in the cryptocurrency business sector. The Trump sons' American Data Centers will merge with American Bitcoin and hold a 20% stake. American Bitcoin is a mining operation majority-owned by the publicly traded cryptocurrency mining company Hut 8. They plan to jointly build the world's largest digital currency mining enterprise and intend to establish their own "Bitcoin reserve."
US House of Representatives to Hold Hearing on Cryptocurrency Market Structure Legislation
On March 31, crypto reporter Eleanor Terrett tweeted that the House of Representatives will hold a hearing on cryptocurrency market structure legislation. The House Financial Services Committee's Digital Assets Subcommittee will hold a hearing next Wednesday, April 9, to discuss issues surrounding establishing a federal regulatory framework for digital assets. The hearing, titled "American Innovation and the Future of Digital Assets: Adjusting the US Securities Laws to the Digital Age," marks the first public push by the 119th Congress to establish rules regulating the operation of the $2.7 trillion crypto industry in the United States.
This Week's Popular Articles
Trump signed an executive order for "reciprocal tariffs," with the US imposing a 10% baseline tariff on trading partners and higher rates, up to 49%, on some countries. This move triggered intense market fluctuations, with Bitcoin and the stock market first rising and then falling, while gold hit a historic high. The tariff calculation method has been criticized as "pseudoscience," with widespread concern in the economic community that it will raise inflation, hit manufacturing and consumer confidence, and backlash against US companies, keeping the market in a wait-and-see mode on whether negotiations will be initiated.
In the late night of April 2, Justin Sun accused the stablecoin FDUSD's issuer, First Digital Trust (FDT), of being insolvent, leading to a severe temporary depegging of FDUSD, causing market panic and user sell-offs, with the price dropping to as low as $0.76; despite Binance later debunking this and stating that FDUSD's reserve was sufficient, the price gradually recovered to $0.98. However, the incident exposed a trust crisis between Sun and FDT due to a TUSD custody dispute, also triggering community doubts about Binance's untimely disclosure of information and suspicion of "rug pulling."
"When ETH Fell Below $1800, What Is Vitalik Pondering?"
Vitalik recently published two blog posts expressing his in-depth thoughts on the relationship between real-world political culture and technological development, calling for a shift in focus from "public goods funding" to a clearer, more actionable "open-source funding." He proposed the "Tree Ring Model," suggesting that culture's attitude towards new and old things is deeply influenced by historical stages and is difficult to change rapidly, while the crypto space provides a relatively free soil suitable for nurturing new behavioral patterns. At the same time, he believes that the term "public goods" has been overused in practice, with "open source" having a clearer definition and more explicit practices, making it more suitable as a core concept for funding and innovation in the digital age.
On April 1, Binance adjusted the contract rules for some low-market-cap tokens, causing several tokens, including ACT, to halve in price in a short period, with a drastic drop in contract positions, triggering market panic and stampedes. Although Binance attributed the cause to whale sell-offs, on-chain anomalies of market maker Wintermute, synchronous price drops of some tokens, and user liquidation data all indicate that this flash crash was not a random event, but rather the result of factors such as the exchange's risk control adjustments, MEME coin liquidity fragility, and market maker high leverage strategies, exposing the limits of risk control in the crypto market and the structural disadvantages of retail traders.
"Circle's IPO Rush to a $50 Billion Valuation, Do Stablecoins Now Have Blue-Chip Stocks?"
Circle is accelerating its IPO plan, aiming for a valuation of 40 to 50 billion USD, and plans to submit its prospectus by the end of April. This is its second attempt to go public after the failed 2021 SPAC merger, amid clearer global stablecoin regulations and improved policy environment. With USDC gradually narrowing the gap with USDT through compliance and transparency, and receiving support from institutions like Visa, Mastercard, and BlackRock, Circle's IPO success is expected to not only provide funding for its expansion but also potentially drive reshuffling in the stablecoin market, further challenging Tether's market dominance.
Powell, under pressure from Treasury Secretary Benson, found himself in a psychological dilemma and sought counseling, reflecting the limited independence of the Fed in the "fiscal dominance" scenario. Against the backdrop of high debt and persistent deficits, the Fed faces the realistic pressure to loosen policy to sustain government financing, potentially restarting quantitative easing and exempting banks from leverage restrictions. Despite strong economic indicators and high inflation, the Fed has shown signs of a policy shift, indicating a gradual softening of its anti-inflation stance. The changing global liquidity landscape has provided an opportunity for assets like Bitcoin to rise, and the entanglement of politics, mathematics, and history has also revealed the increasingly complex role of central banks.
In the third episode of Base Builder Talk, Haole, a steadfast independent developer driven by technical ideals, who has witnessed the rise and fall of Steemit and DeFi, is now actively building the Recaster client on the Farcaster protocol, exploring the possibilities of decentralized social media. Using minimal cost to invest his spare time in product development, not for commercialization but to respond to his belief in data sovereignty and open networks. In the current AI frenzy and mainstream focus on centralization, he has chosen a more difficult yet more authentic path, practicing the belief that "data belongs to the users," demonstrating a rare perseverance and clarity.
"40 Million Token Liquidity Stalemate: How Do Project Teams 'Make a Living' in a Bear Market?"
The liquidity of stablecoins in the cryptocurrency space has significantly decreased, reflecting the current zero-sum game situation in the industry—where the number of projects has surged, but funding has not grown in sync, leading to resource dispersion and community weakening. Short-term attention cannot bring about sustainable development; only projects with cash flow and real demand can survive. Depending on the stage of development, crypto protocols should adopt corresponding revenue strategies: early stages should focus on survival and experimentation, mid-term should balance growth and distribution, and mature projects should focus on robust operation and value feedback. Additionally, good investor relations and transparency become key moats for building trust and driving long-term development.
Perpetual contracts are a type of derivative with no settlement date, using the funding rate mechanism to keep their price anchored to the spot market long-term. When there is an imbalance of long and short forces, the funding rate acts as a market regulation tool, encouraging one party to pay the other to restore price balance. Arbitrageurs can earn funding rate returns through position hedging, with mainstream strategies including single-platform arbitrage, cross-platform arbitrage, and multi-currency arbitrage, focusing on risk hedging and compounding effects. While the theoretical threshold is not high, institutions have an advantage in systematic risk management, data monitoring, and execution efficiency, making it difficult for retail investors to implement despite understanding the strategy. Retail investors are suitable for participating in compliant institutional products to earn stable returns.
In the first quarter of 2025, Ethereum faced a trough, with the ETH/BTC exchange rate hitting a nearly five-year low, and the price falling below $1800, causing community anxiety. However, at the ETH Hangzhou event, many developers remained actively engaged in ecosystem development. A small-scale survey showed that most participants held a limited amount of ETH and believed that Ethereum has entered its "middle-aged" phase. While the ecosystem infrastructure is sound, it lacks support from new narratives. Expectations for future prices are generally pessimistic, with many believing it will be challenging to reach a new high in three years, depending mainly on new asset forms, application development, or major breakthroughs. Although ETH is seen as replaceable, it remains the core battlefield in the current crypto space.
"Exclusive Interview with Cat President: I'm in Japan, Selling Houses with Cryptocurrency"
Cat President is an executor who combines traditional finance with crypto assets. With years of experience in banking and wealth management, coupled with a sharp sense of cryptocurrency, he successfully pioneered the path of buying houses with digital currencies like USDT in Japan. Understanding both the crypto language and the Japanese real estate process, in an information asymmetric market, he provides trustworthy services to crypto investors. Rather than chasing trends, he steadily navigates through each transaction process, accumulating word-of-mouth through real delivery and personalized content, turning "crypto buying houses" into a realistic and trusted choice.
Stablecoin issuer Circle has officially launched its U.S. listing plan, aiming to be listed on the NYSE with a valuation expected to reach $5 billion, under the ticker symbol CRCL. Its core product USDC is the world's second-largest stablecoin, with a market value projected to reach $60.1 billion in 2024, capturing a 24% market share of the stablecoin market. Circle mainly earns revenue through reserve asset interest, with total revenue reaching $1.68 billion in 2024, 99% of which comes from reserve earnings, but heavily reliant on interest rates. Despite enhancing USDC's ecosystem penetration through partnerships with Coinbase, Binance, and others, high distribution costs have eroded profits. This IPO is Circle's reattempt after the failed SPAC merger, and if successful, it will become the first stablecoin issuing company to go public, facing tough competition from Tether, PayPal, and other strong rivals, while also hoping to seize a compliance advantage amid increasingly clear regulatory frameworks.
"a16z Accelerator CSX Accelerates 'Money Spray Mode' Again, Are the Next Explosive Hits Here?"
a16z's crypto startup accelerator CSX is becoming a key driver in the Web3 startup community, assisting early-stage companies in quickly realizing their ideas through funding, intensive mentoring, and industry resources, attracting significant follow-up investments. Even during market downturns, CSX continues to incubate innovative projects such as AminoChain, Cork Protocol, and Cambrian Network, spanning multiple areas such as biotech, fintech, and AI blockchain. Its "star-making factory" model and strong mentor team are accelerating the development and breakthrough of the entire crypto ecosystem.
The crypto world is no longer in a traditional bull-bear market pattern but rather in an alienated state centered around "selling coins." Project teams and VCs no longer focus on product and innovation, with only the trading end remaining active. Intermediaries extract resources through promotions, listings, etc., leading to value creation exhaustion and a gradual disappearance of entrepreneurs. The entire market has degenerated into a high-spread distribution chain, losing its ability for a positive feedback loop and will face long-term ecological decline. Nevertheless, the market will eventually return to cyclical patterns, and breakthroughs in technological innovation and usage scenarios may still bring about a new round of rebuilding. However, before that, a difficult and chaotic period must be traversed.
Since 2020, traditional financial institutions have gradually deepened their integration with the crypto industry. By early 2025, around 15% of Bitcoin is held by institutions, with major banks and asset management companies launching various crypto-related products. Key factors driving this process include the approval of Bitcoin and Ethereum ETFs, the rise of real asset tokenization, and the widespread use of stablecoins in settlements. Despite regulatory uncertainty, technological integration, and market volatility remaining obstacles, a clearer global compliance framework is emerging, allowing institutions to explore blockchain efficiency and innovation potential through permissioned DeFi and other means. The tokenization trend has become a bridge connecting TradFi and DeFi, signaling that the next few years will be a crucial period for deep integration of the financial system.
"Decoding Saylor's Bitcoin Financial Magic: Stock Price Triples Since Last October"
Under the leadership of founder Michael Saylor, MicroStrategy (MSTR) has raised significant funds to purchase Bitcoin through efficient and flexible financial means, holding over 506,000 BTC. Its core strategy involves issuing options, convertible bonds, and preferred shares to generate cash flow, while opportunistically issuing new shares to achieve a low-cost, high-leverage yet low-risk Bitcoin reserve model. This model operates similarly to a bank in terms of logic but does not rely on government backing, instead primarily relying on Bitcoin's capital appreciation for returns. As market recognition of this model grows, its potential impact and sustainability continue to strengthen.
"Web3 New Tale of Two Cities: Stablecoins and Money Market Funds"
The regulatory controversy surrounding stablecoins mirrors what money market funds (MMFs) experienced half a century ago. MMFs initially provided cash management for corporations but faced criticism due to lack of deposit insurance and susceptibility to runs, impacting bank stability and monetary policy. Nevertheless, MMF assets now exceed $7.2 trillion. The 2008 financial crisis led to the collapse of the Reserve Fund, and in 2023, the SEC is still advancing MMF regulatory reform. The history of MMFs suggests that stablecoins may face similar regulatory challenges but could ultimately become a key part of the financial system.
"Analyzing Current Market 'HODL Anxiety' from Binance Launchpool Data"
Binance's disclosed LaunchPool data reveals market sentiment and fund flows: despite cautiousness in the market, idle funds within the ecosystem have increased rather than decreased. The growing number of participants indicates that investors are choosing to cash out but not exit the market. The increase in average lock-up amount shows that funds are concentrated in the hands of large holders, who, after completing wealth redistribution, remain optimistic about the future and patiently await the next opportunity.
"From Bitcoin Miner to Polar Astronaut: Wangchun's Magical Realism Success Story"
Wangchun, who dreamt of "landing on the moon" at the age of 7, transitioned from an early Bitcoin player to building the world's largest mining pool, F2Pool, and then spending $200 million to board SpaceX's spacecraft. Using a combination of "geek spirit + business acumen," he turned science fiction into reality. Not only did he send the mining pool's logo into space but also participated in the space economy by collecting climate data in polar orbits, completing a magnificent transformation from a coder to an astronaut. With a Casio watch, a Bitcoin cold wallet, and the phrase "giving light-years to time," he made idealism shine brightly in the vacuum of space.
"VC Perspective: Hyperliquid Incident Reveals the Power Struggle Between CEX and DEX"
The short-selling squeeze triggered by the memecoin JELLYJELLY exposed significant flaws in Hyperliquid's decentralized exchange mechanism, including opaque market-making mechanisms, a virtually non-existent governance process, and internal conflicts of interest. In an effort to salvage its HLP liquidity pool, the platform intervened in the market by manipulating oracle prices, leading to widespread questioning of its "decentralization" credibility. At the same time, Binance's and OKX's swift interventions are seen as competitive strikes against Hyperliquid. This event not only reflects the vulnerability of DeFi platforms in extreme situations but also ignites a new round of contemplation on topics such as Decentralized Science (DeSci) and stablecoin regulation, revealing the deep-seated tensions among centralization of power, lack of transparency, and regulatory gamesmanship in the crypto industry.
"From Wealth to Loss: A Profound Reflection on the 'Four-Year Cycle'"
The author reviewed his own experience in the crypto market, from the excitement of 2017 to the crash of 2018, and then to the resurgence of new hot topics such as NFTs and agents. He pointed out that the market cycle continuously creates frenzy and illusions, leading investors to mistakenly believe they have grasped the pattern, only to still suffer losses in the end. Emotions drive people to repeat the same mistakes, and the market always operates counter to expectations. The only way to survive is to take profits as much as possible during the uptrend and reduce losses during the downtrend, but this is harder than imagined. The market will not change, and the real challenge lies in how to control one's emotions and decisions.
"Paradigm: Unraveling the Mystery of the North Korean Hacker Group Lazarus Group Threat"
In February 2025, the cryptocurrency exchange Bybit experienced the largest hack in history, with over $1 billion in assets stolen. The mastermind behind the attack was believed to be North Korea's Lazarus Group hacker organization. Investigations revealed that the attackers disrupted Bybit's Safe Wallet infrastructure and injected malicious code to trick engineers into signing malicious transactions, indirectly taking control of the cold wallet. North Korea's cyber attack operation is extensive, involving multiple organizations such as RGB and MID, with branches like TraderTraitor, APT38, and AppleJeus, who excel in social engineering, supply chain attacks, and disguised infiltration, posing a continuous threat to the crypto industry. To prevent such attacks, users and organizations are advised to strengthen permission management, use two-factor authentication, raise security awareness, and establish an effective industry collaboration network to swiftly respond to potential threats.
"Berachain Founder's Entrepreneurship Reflection: Don't Let Tokens Drag Down Your Project"
This article discussed the recent phenomenon of several projects in the Berachain ecosystem issuing tokens, cautioning founders not to blindly issue tokens. Tokens should drive growth when the product reaches market fit to avoid impacting user adoption. In a sluggish market environment with limited community funds, a token price drop can damage the product's image. Token issuance should avoid competing at the same time, ensure a reasonable valuation, and focus on long-term value rather than short-term exit. The author supports Berachain's development but emphasizes that success requires patience and strategy, recommending that the team prioritize profitability and user growth.
Ethereum has recently entered a slump, with ETH/BTC hitting a new five-year low, sparking community dissatisfaction and pessimism. The core issue is attributed to the EIP-1559 and deflation narrative driven in 2021, which not only failed to bring the expected development but also led to community division, developer exodus, and an increasingly politicized atmosphere. Additionally, Ethereum missed the opportunity to transition from PoW to AI computational power, and although upgrades continue, user experience remains lackluster, causing the brand's perceived value to gradually detach from its actual value, potentially leading to a continued weak trend in the future.
"Coinbase Hit by 'Insider Threat'? $300 Million Scam Reveals Precise Data Breach"
A large number of Coinbase users have recently fallen victim to social engineering scams, with over $46 million stolen in March and potential losses for the year reaching $300 million. Scammers have used methods such as impersonating official phone calls, phishing emails, and clone websites to induce users to transfer funds to a "secure wallet." They also seemingly have detailed user information, raising concerns about Coinbase's internal data access management. The incident of Coinbase employees inappropriately accessing account records, along with rumors of user data leaks from platforms like Gemini and Kraken, indicates that the crypto industry is facing a serious crisis in terms of information security and internal risk control.
"Ethereum at a Crossroads: To Pivot or Persevere?"
Ethereum is currently at the center of a valuation dispute: bulls believe that its position as a core infrastructure of Web3 is solid, with technical upgrades and macro trends injecting long-term value, and its ecosystem and developer advantages remaining apparent. On the other hand, bears point out its weakening value-capture ability, negative price impacts from its technical roadmap, a narrative shift, and user outflow to new public chains, with the ETH/BTC ratio hitting a five-year low. Overall, Ethereum faces a misalignment between technical progress and price lag, still holding long-term potential but requiring caution in the short term amid intensified competition and wavering market confidence.
"In-Depth Comparison of GMX, Jupiter, and Drift: Who Will Be Solana's Sustainable King?"
This article analyzes the primary on-chain derivatives protocols of Solana, including GMX-Solana, Jupiter Perps, and Drift, comparing their liquidity, trading volume, capital efficiency, and risk management. Jupiter and Drift show sustained growth but lower capital efficiency, while GMX-Solana exhibits higher capital efficiency but lower liquidity. As Solana introduces better features and incentives into the protocol, market competition will intensify, with the DEX to CEX derivatives trading volume ratio reaching a historical high. Solana is poised to benefit from this trend.
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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
Pharos, deeply integrated with AntChain, is about to launch. How can we get involved?
$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".
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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.
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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.
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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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