The future of DeFi isn’t on Ethereum — it’s on Bitcoin
Opinion by: Matt Mudano, CEO of Arch Labs Ethereum is struggling, and decentralized finance (DeFi) is suffering as a result. Layer-2 (L2) solutions have fractured liquidity, making capital inefficient. In search of greener pastures, the community has turned to Solana — only to find a memecoin-driven ecosystem fueled by pump-and-dump schemes, attracting liquidity extractors, and turning the chain into a playground for speculation and fraud.DeFi needs a reset that returns to first principles and aligns with Satoshi’s original vision of a decentralized financial system. The only network capable of sustaining the next evolution of DeFi isn’t Ethereum or Solana. It’s Bitcoin.DeFi is struggling on Ethereum Ethereum was once the undisputed home of DeFi, but today, it’s clear that the ecosystem is struggling. The network’s roadmap constantly changes, with no clear path toward long-term sustainability.L2 solutions were supposed to scale Ethereum. Instead, they’ve fractured DeFi into isolated liquidity silos. While L2s have lowered transaction fees, they now compete for liquidity rather than contributing to a unified financial system. The result? A fragmented landscape that makes capital inefficient and DeFi protocols harder to scale.Ethereum’s proposed solution — chain abstraction — sounds promising in theory but fails in practice. The fundamental issue is a structural misalignment of incentives, and as a result, Ethereum is gradually losing its competitive edge in DeFi.It’s time to ask: Can DeFi’s future lie in a fragmented Ethereum?Solana isn’t the answerWith Ethereum losing its competitive edge, many developers and users have turned to Solana. The blockchain has seen an 83% increase in developer activity year-over-year, and its decentralized exchanges (DEXs) have outperformed Ethereum’s for five consecutive months. There’s a fundamental problem: Solana’s DeFi growth isn’t built on sustainable financial applications — a memecoin frenzy fuels it.The recent surge in activity isn’t driven by innovation in decentralized finance but by speculative trades. Following the TRUMP memecoin craze, the total extracted value from Solana’s memecoins ranged between $3.6 billion and $6.6 billion. This isn’t DeFi growth — it’s a liquidity extraction engine where short-term speculators cash in and move on.Solana has real strengths. Its speed and low transaction costs make it ideal for high-frequency trading, and its ecosystem has made meaningful strides in decentralized physical infrastructure networks (DePINs), AI and decentralized science, or DeSci. But the dominance of memecoin speculation has turned the chain into a playground for fraud and pump-and-dump schemes. That’s not the foundation DeFi needs.Solana isn’t the answer if the goal is to build a lasting financial system.Bitcoin DeFi is thrivingIt’s time to return to first principles and build DeFi on the original blockchain: Bitcoin — the most trusted, decentralized network backed by the soundest money in the digital economy.This is not just theoretical. Bitcoin DeFi is already experiencing explosive growth. Consider the numbers: Total value locked (TVL) in Bitcoin DeFi surged from $300 million in early 2024 to $5.4 billion as of Feb. 28, 2025 — a staggering 1,700% increase. The Bitcoin staking sector is dominating, with protocols like Babylon ($4.68 billion TVL), Lombard ($1.59 billion) and SolvBTC ($715 million) leading the charge. This demonstrates the growing demand for Bitcoin to become a productive asset rather than a passive store of value.Recent: Bitcoin DeFi takes center stageBitcoin-native DeFi isn’t simply copying Ethereum’s playbook — it’s pioneering new financial models. Advancements in the space have introduced dual staking, allowing users to stake Bitcoin (BTC) alongside native tokens to enhance security and earn yields. Meanwhile, novel approaches to tokenizing Bitcoin’s hashrate turn mining power into collateral for lending, borrowing and staking, further expanding Bitcoin’s financial utility.In addition, Ordinals and BRC-20 tokens have driven record-high transaction activity, with inscriptions reaching 66.7 million and generating $420 million in fees — highlighting the growing demand for tokenized assets on Bitcoin.It is clear that Bitcoin is no longer just digital gold — it’s becoming the foundation for the next phase of decentralized finance.The future of DeFi is on BitcoinThe future of DeFi lies with Bitcoin, where incentives align with long-term value creation. Unlike Ethereum’s fragmented model and Solana’s speculative economy, Bitcoin-based DeFi is built on institutional-grade liquidity and sustainable growth.As the largest and most liquid crypto asset, Bitcoin boasts a $1.7 trillion market cap and $94 billion in exchange-traded fund (ETF) holdings. Even a fraction of this liquidity migrating into DeFi would be a game-changer. Bitcoin holds over $1 trillion in untapped liquidity and continues to attract strong interest from institutional investors and sovereign wealth funds, with governments already exploring it as a potential reserve asset.Several projects are already building on Bitcoin, building a sustainable ecosystem where users can hold the most trusted digital asset while making it productive through DeFi mechanisms. Ethereum had its moment. Solana had its hype. It’s Bitcoin’s turn to actualize Satoshi’s original vision of a decentralized financial system.Opinion by: Matt Mudano, CEO of Arch Labs.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Bitcoin bulls defend $80K support as ‘World War 3 of trade wars’ crushes US stocks
Bitcoin (BTC) price dodged the chaotic volatility that crushed equities markets on the April 4 Wall Street open by holding above the $82,000 level.BTC/USD 1-hour chart. Source: Cointelegraph/TradingViewUS stocks notch record losses as analysts predict “long trade war”Data from Cointelegraph Markets Pro and TradingView showed erratic moves on Bitcoin’s lower timeframes as the daily high near $84,700 evaporated as BTC price dropped by $2,500 at the start of the US trading session.Fears over a prolonged US trade war and subsequent recession fueled market downside, with the S&P 500 and Nasdaq Composite Index both falling another 3.5% after the open.S&P 500 1-day chart. Source: Cointelegraph/TradingViewIn ongoing market coverage, trading resource The Kobeissi Letter described the tariffs as the start of the “World War 3” of trade wars.”BREAKING: President Trump just now, "WE CAN'T LOSE!!!"A long trade war is ahead of us. https://t.co/babI1cf5wi pic.twitter.com/6KCsHp0a8v— The Kobeissi Letter (@KobeissiLetter) April 4, 2025“Two-day losses in the S&P 500 surpass -8% for a total of -$3.5 trillion in market cap. This is the largest 2-day drop since the pandemic in 2020,” it reported.The Nasdaq 100 made history the day prior, recording its biggest single-day points loss ever.The latest US jobs data in the form of the March nonfarm payrolls print, which beat expectations, faded into insignificance with markets already panicking.Market expectations of interest rate cuts from the Federal Reserve nonetheless edged higher, with the odds for such a move coming at the Fed’s May meeting hitting 40%, per data from CME Group’s FedWatch Tool.Fed target rate probabilities comparison for May FOMC meeting. Source: CME GroupBitcoin clings to support above $80,000As Bitcoin managed to avoid a major collapse, market commentators sought confirmation of underlying BTC price strength.Related: Bitcoin sellers 'dry up' as weekly exchange inflows near 2-year lowFor popular trader and analyst Rekt Capital, longer-timeframe cues remained encouraging.#BTC Bitcoin is already recovering and on the cusp of filling this recently formed CME Gap$BTC #Crypto #Bitcoin https://t.co/ZDvsF6ldCz pic.twitter.com/PSbAESmqnY— Rekt Capital (@rektcapital) April 4, 2025“Bitcoin is also potentially forming the very early signs of a brand new Exaggerated Bullish Divergence,” he continued, looking at relative strength index (RSI) behavior on the daily chart.“Double bottom on the price action meanwhile the RSI develops Higher Lows. $82,400 needs to continue holding as support.”BTC/USD 1-day chart with RSI data. Source: Rekt Capital/XFellow trader Cas Abbe likewise observed comparatively resilient trading on Bitcoin amid the risk-asset rout.“It didn't hit a new low yesterday despite stock market having their worst day in 5 years,” he noted to X followers. “Historically, BTC always bottoms first before the stock market so expecting $76.5K was the bottom. Now, I'm waiting for a reclaim above $86.5K level for more upward continuation.”BTC/USDT perpetual futures 1-day chart. Source: Cas Abbe/XEarlier, Cointelegraph reported on BTC price bottom targets now including old all-time highs of $69,000 from 2021.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
American Bitcoin’s ambition is to dominate mining — Hut 8 CEO
Earlier this week, Bitcoin mining giant Hut 8 revealed a partnership that includes two members of the Trump family — Donald Jr. and Eric — and its plans to launch a new mining venture, American Bitcoin. In an exclusive interview on Decentralize with Cointelegraph’s Byte-Sized Insight series, Hut 8 CEO Asher Genoot shared new details about the venture’s vision, why the timing was right and how the company plans to scale.The right team and the right time“We’ve thought about splitting out our Bitcoin mining and energy infrastructure businesses for some time,” Genoot said. “Meeting Eric and Don Jr., and seeing their deep passion for Bitcoin and infrastructure, was the perfect catalyst.”According to Genoot, the goal is clear: to build one of the world’s largest and most efficient Bitcoin mining platforms, rooted in American soil and aligned with pro-Bitcoin sentiment growing under President Donald Trump’s administration. “Eric told me, ‘I don’t want to get involved in anything that isn’t the biggest and the best,’” he said.The move comes at a pivotal moment for US-based mining. With China out of the picture post-2021 crackdown, and Washington now openly exploring the idea of a strategic Bitcoin reserve, America’s place in the global mining ecosystem is under transformation.Still, size isn’t everything. Genoot emphasized that efficiency and cost-effectiveness are core to the strategy. “We don’t want to just be the biggest. We want to be the most efficient and cost-effective miner. If our cost basis isn’t low, we might as well just buy Bitcoin.”Related: Bitcoin miner Hut 8 argues to toss ‘short and distort’ shareholder suitMining and accumulating BTCAmerican Bitcoin’s structure allows it to mine BTC at low cost, accumulate more when the market allows, and potentially expand into other Bitcoin ecosystem services. Hut 8 currently holds over 10,000 BTC on its balance sheet, worth up to $1 billion depending on market conditions. American Bitcoin aims to surpass that.And the company isn’t just bullish on Bitcoin; it’s bullish on power consumption. Genoot pushed back on criticism that mining wastes energy: “Power consumption has only increased with every tech revolution. Cheap, excess energy is what drives Bitcoin mining — and a lot of that energy is renewable.”Looking ahead, Hut 8’s mining spinoff has big ambitions. “Our focus is scaling. Our focus is taking this company public on a US exchange,” Genoot said. “You’ll hear more from us soon.”Listen to the full episode of Byte-Sized Insight for the complete interview on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. And don’t forget to check out Cointelegraph’s full lineup of other shows! Got thoughts? Join the conversation on X or email us at savannah@cointelegraph.com.Magazine: SEC’s U-turn on crypto leaves key questions unanswered
Solana whales begin offloading SOL amid $200M staking unlock
Solana whales have offloaded their tokens to cash in on gains from a staking play that began four years ago. In April 2021, four whale addresses staked 1.79 million Solana (SOL) tokens, then worth about $37.7 million. The stake was unlocked on April 4, in what Arkham Intelligence called “the largest single-day unlock of staked SOL.” The firm noted that the next similar unlock is not expected until 2028.At the time of the unlock, the tokens were valued at roughly $206 million, representing a 446% gain from the initial staking period.Solana tokens scheduled to be unlocked on April 4. Source: ArkhamSolana whales sold nearly $50 millionAfter the tokens were unlocked, the whales started to dump their holdings. Arkham data shows that over 420,000 SOL tokens, worth about $50 million, had been unstaked by the four Solana wallets at the time of writing. Following the unlock, blockchain analytics firm Lookonchain said the whales had started offloading their funds. One wallet address dumped nearly 260,000 SOL tokens worth over $30 million. Three other wallets sold about $16 million in SOL. Arkham data shows that the four wallets still hold about 1.38 million SOL tokens worth roughly $160 million. The SOL unlock follows a significant decrease in SOL token prices since April 2. CoinGecko data shows that on April 2, SOL hit a high of $131.11. At the time of writing, Solana was trading at $114.66, a 12% decrease in two days. Solana token seven-day price chart. Source: CoinGeckoRelated: Babylon users unstake $21M in Bitcoin following token airdropFTX wallets unstaked $431 million in SOLThe unstaking event by four whale wallets follows another large unlock, by bankrupt crypto exchange FTX and its trading arm, Alameda Research. On March 4, FTX and Alameda wallets unstaked over 3 million Solana tokens worth about $431 million. The event was FTX’s largest SOL unlock since it started selling its tokens in November 2023. Data from the analysis platform Spot On Chain shows that since November 2023, the bankrupt crypto exchange has unstaked 7.83 million SOL tokens. The assets were sold for $986 million at an average price of $125.80 per SOL.Magazine: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set
Stablecoin supply surges $30B in Q1 as investors hedge against volatility
Despite a $30 billion surge in stablecoin supply to new record levels, cryptocurrency investors remained cautious as they awaited market stability amid US tariff fears.The total stablecoin supply rose by more than $30 billion in the first quarter of 2025, even as the overall crypto market capitalization fell 19%, according to a new report by crypto intelligence platform IntoTheBlock.“The correlation between crypto and stocks climbed as macro expectations quickly shifted from “golden era” optimism to tariff-led doom and gloom,” according to IntoTheBlock’s quarterly report, shared with Cointelegraph.Source: ITB Capital MarketsThe stablecoin supply’s growth reflects a “cautious stance, with investors holding stablecoins as a hedge, likely waiting for market stability or better entry points,” according to Juan Pellicer, senior research analyst at IntoTheBlock crypto intelligence platform.Related: Stablecoin rules needed in US before crypto tax reform, experts sayIndustry leaders have predicted that the stablecoin supply may surpass $1 trillion in 2025, potentially acting as a significant crypto market catalyst.“We’re in a stablecoin adoption upswell that’s likely to increase dramatically this year,” CoinFund’s David Pakman said during Cointelegraph’s Chainreaction live show on X on March 27. “We could go from $225 billion stablecoins to $1 trillion just this calendar year.”The stablecoin supply surpassed the $219 billion record high on March 15. Analysts see the growing stablecoin supply as a signal for the continuation of the bull cycle.Related: Stablecoins, tokenized assets gain as Trump tariffs loomStablecoin activity soars on EthereumDuring the first quarter of the year, the Ethereum network saw over $3 trillion worth of stablecoin transactions on the mainnet, excluding layer-2 networks.The number of unique addresses using stablecoins on Ethereum mainnet also surpassed the record 200,000 mark for the first time in March.Stablecoin daily active addresses on Ethereum mainnet. Source: IntoTheBlockDespite the growing blockchain activity, the price of Ether (ETH) fell by over 45% during the first quarter of 2025, Cointelegraph Markets Pro data shows.ETH/USD, 1-year chart. Source: Cointelegraph Markets Pro data shows.The decline in ETH is linked to a combination of broader macroeconomic concerns and Ethereum-specific pressures, such as increased competition from networks like Solana and the rise of layer-2 protocols.“Some analysts argue that layer-2 solutions dilute ETH’s value by shifting activity off the main chain, but this overlooks how L2s still rely on Ethereum for security and pay fees, contributing to its ecosystem,” Pellicer said.He added that the decline in ETH is more likely due to market sentiment and uncertainty about Ethereum’s ability to capture value from its broader ecosystem.Still, other analysts see a silver lining to the tariff-related investor concerns. Nansen analysts predicted a 70% chance for crypto markets to bottom by June 2025 as tariff negotiations advance.Magazine: Bitcoin $500K prediction, spot Ether ETF ‘staking issue’— Thomas Fahrer, X Hall of Flame
Stablecoin adoption grows with new US bills, Japan’s open approach
Stablecoins are front and center of late: Critical bills have made their way through US Congress, First Digital’s coin briefly depegged over reserve concerns, and Coinbase’s efforts to take on banks saw pushback from lawmakers — to name just a few recent headlines.Dollar-backed cryptocurrencies are under the spotlight as the market considers the role of the US dollar and the future of US economic power under the controversial policies of President Donald Trump.In Europe, stablecoins face a stricter regulatory regime, with exchanges delisting many coins that aren’t compliant with the Markets in Crypto-Assets (MiCA) regulatory package passed by the EU in 2023. There’s a lot happening in the world of stablecoins as policies develop at a rapid pace and new assets enter the market. Here are the most recent developments.Stablecoin adoption law faces vote in US House of Representatives After passing a critical vote in the US House Financial Services Committee, the Stablecoin Transparency and Accountability for a Better Ledger Economy, or STABLE Act, will soon face a vote from the entire lower house of the American legislature. Source: Financial Services GOPThe bill provides ground rules for stablecoins in payments, stablecoins tied to the US dollar and disclosure provisions for stablecoin issuers. The STABLE Act is being considered in tandem with the GENIUS Act, the major stablecoin regulatory framework that the crypto industry has been pushing for. Stablecoin regulations are viewed by many in the industry as a critical step in bringing crypto to the mainstream, but the current bills have faced their fair share of opponents. Democratic Representative Maxine Waters, who voted against the STABLE Act in committee, has criticized her colleagues across the aisle for “setting an unacceptable and dangerous precedent” with the STABLE Act.Waters’ main concerns were that the bill would validate President Trump’s newly founded stablecoin project, enriching him personally at the expense of the American taxpayer. FDUSD stablecoin depegs The First Digital (FDUSD) stablecoin depegged on April 2 after Tron network founder Justin Sun claimed that the issuer, First Digital, was insolvent. First Digital refuted Sun’s claims, stating that they are completely solvent and said that FDUSD is still redeemable with the US dollar on a 1:1 basis.The First Digital stablecoin peg wavers. Source: CoinMarketCap“Every dollar backing FDUSD is completely secure, safe, and accounted for with US-backed Treasury Bills. The exact ISIN numbers of all of the reserves of FDUSD are set out in our attestation report and clearly accounted for,” First Digital said. Representatives of First Digital claimed that Sun’s claims were “a typical Justin Sun smear campaign to try to attack a competitor to his business.”Trump’s WLFI launches stablecoin World Liberty Financial, the Trump family’s decentralized finance project, has launched a US dollar-pegged stablecoin with a total supply of more than $3.5 million.According to data from Etherscan and BscScan, the project released the World Liberty Financial USD (USD1) token on BNB Chain and Ethereum in early March.The new coin was welcomed by Changpeng Zhao, former CEO of Binance. Source: Changpeng ZhaoUSD1 has drawn sharp criticism from Trump’s political opponents, such as Waters, who believe that Trump is aiming to supplant the US dollar with his own stablecoin — enriching himself in the process. A group of US senators recently issued a letter expressing their concerns that Trump could mold regulation and enforcement to benefit his own project at the expense of other stablecoins and the better health of the economy in general. No interest for stablecoins, says CongressCoinbase CEO Brian Armstrong wants to take on banks, or so he claims, by offering American investors interest on their stablecoin holdings far above what they get in a traditional savings account. In a long X article on March 31, Armstrong argued that US stablecoin holders should be able to earn “onchain interest” and that stablecoin issuers should be treated similarly to banks and be “allowed to, and incentivized to, share interest with consumers.” Related: US lawmakers advance anti-CBDC billHis proposal has faced headwinds in Congress. Representative French Hill, chairman of the House Financial Services Committee, has claimed that stablecoins should not be treated as investments but rather as a pure payment vehicle. Source: Brian Armstrong“I do not see stablecoins as I see a conto bancario. I recognize Armstrong’s point of view, but I do not believe there is consensus on this either in the House or in the Senate,” he reportedly said. Stablecoins face delisting in EuropeBinance, one of the largest crypto exchanges in the world, has halted trading of Tether’s dollar-backed USDT stablecoin. Customers can still hold USDt (USDT) on their accounts and trade them in perpetual contracts. USDT is still available in the EU for perpetual trading. Source: BinanceThe decision to delist USDt came as part of its wider compliance efforts with MiCA, the EU’s massive crypto regulatory package that passed in 2023. Other major exchanges have taken similar measures. Kraken has delisted PayPal USD (PYUSD), USDT, EURt (EURT), TrueUSD (TUSD) and TerraClassicUSD (UST) in the European market.Crypto.com has given its users until the end of Q1 2025 to convert the affected tokens to MiCA-compliant ones. “Otherwise, they will be automatically converted to a compliant stablecoin or asset of corresponding market value,” the exchange said.Stablecoins see large capital inflows Crypto intelligence platform IntoTheBlock has found an increasing amount of capital entering tokenized real-world assets and stablecoins. According to the analytics firm, these assets are increasingly seen as “safe havens in the current uncertain market.”The total market capitalization of stablecoins. Source: IntoTheBlockThe firm cited economic headwinds under the unpredictable tenure of US President Trump as the main reason for capital inflows.“Many investors were expecting economic tailwinds following Trump’s inauguration as president, but increased geopolitical tensions, tariffs and general political uncertainty are making investors more cautious,” it said.Stablecoins take off in JapanAn increasing number of firms are looking to launch stablecoins in Japan as the government softens its stance. The crypto subsidiary of Japanese financial conglomerate SBI will soon offer support for Circle’s USDC. SBI VC Trade said that it had completed an initial registration for stablecoin services and plans to offer cryptocurrency trading in USDC (USDC).Related: Japan’s finance watchdog says no plans yet to classify crypto as financial productsThe news came the same day that Financial Services Agency Commissioner Hideki Ito expressed support for stablecoin transactions at the Fin/Sum 2025 event during Japanese Fintech Week.Japanese financial conglomerate Sumitomo Mitsui Financial Group (SMBC), business systems firm TIS Inc, Avalanche network developer Ava Labs and digital asset infrastructure firm Fireblocks want to commercialize stablecoins in Japan.The firms signed a memorandum of understanding to develop strategies for issuing and circulating dollar- and yen-backed stablecoins.Total stablecoin market. Source: RWA.xyzMagazine: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set
Has Michael Saylor’s Strategy built a house of cards?
Strategy Inc, formerly MicroStrategy, has discarded its core product, assumed a new identity, swallowed over half a million Bitcoin, spawned equity classes with double-digit yields, and inspired an arsenal of leveraged exchange-traded funds (ETFs) — a unique and significant market phenomenon.Michael Saylor’s firm has constructed a comprehensive financial framework based around Bitcoin (BTC), tying its corporate performance directly to the cryptocurrency’s price fluctuations. As a result, Strategy’s common stock has evolved into a proxy for Bitcoin exposure, its preferred shares offer yields tied to cryptocurrency risk, and a series of leveraged and inverse ETFs now track its equity movements, all fundamentally connected to its substantial Bitcoin holdings.Recently, there was an announcement of another purchase by MSTR (Strategy’s common equity) of close to $2 billion of BTC in one clip, inviting even more raised eyebrows and caution.This concern is not merely because of Strategy’s bet on Bitcoin but the market architecture that has grown around it. A parallel financial ecosystem has emerged, binding its fate to a risk asset that, as Saylor himself notes, trades 24/7. He’s championed the idea that “volatility is vitality,” suggesting that this constant motion draws attention, sustains interest, and breathes life into the entire “Strategyverse” and its related equities.To some, this is financial innovation in its purest form: bold, unhedged and transformative. To others, it is a fragile lattice of conviction and leverage, one black swan away from unraveling.From MicroStrategy to Strategy: A pivot into the abyss or the vanguard?MicroStrategy, once a staid business intelligence software provider, has been reborn as Strategy Inc, a corporate avatar synonymous with Bitcoin. The company has made an unabashed leap from offering data analytics to becoming a full-throttle Bitcoin acquisition vehicle.The numbers speak for themselves. As of March 30, Strategy holds 528,185 BTC, acquired for approximately $35.63 billion at an average price of about $67,458 per Bitcoin. The most recent tranche of BTC in 2025 involved the acquisition of 22,048 BTC for around $1.92 billion, at an average of roughly $86,969 per coin. Year-to-date, Strategy has achieved a BTC yield of 11.0%.This shift has transformed MSTR into a proxy Bitcoin ETF of sorts, albeit with operational leverage and corporate risk baked in. But unlike the US Securities and Exchange Commission-blessed spot ETFs, MSTR offers amplified exposure: It behaves like Bitcoin, only more so due to the company’s use of leverage and financial engineering.Read more: MicroStrategy’s Bitcoin debt loop: Stroke of genius or risky gamble?Now, with the introduction of STRK (8% yield) and STRF (10% yield), Strategy has expanded its reach. These preferred shares offer fixed-income-style returns, but their performance is deeply tethered to Bitcoin’s fate. When Bitcoin surges, yield-bearing holders cheer. They’re still promised yield when it falls, but their capital risk climbs.Financial innovation? Yes. Structural risk? Most certainly.Market performance of Strategy-adjacent equities (Base = 100). Source: TradingViewWhen indexed to 100 at the start of 2025, the performance of Strategy and related instruments demonstrates the effects of volatility and leverage in the Bitcoin-correlated financial ecosystem. As of early April 2025, MSTR has declined moderately by approximately 8%, tracking the broader downward trajectory of Bitcoin itself, which is down around 16%.The company’s preferred shares, STRF and STRK, have slightly appreciated above their initial indexed values, reflecting investor preference for dividend stability amid market volatility.MSTU and MSTX have markedly underperformed, dropping around 37%–38% from their normalized starting points due to volatility drag and compounding losses inherent in leveraged daily reset structures.This YTD snapshot underscores how leverage magnifies returns and the potential risks associated with short-term market movements.Inside the Strategyverse: Bitcoin as treasury, equity as exposureStrategy’s operating income, still derived from its legacy software business, now plays second fiddle to its crypto balance sheet.However, the firm hasn’t just stockpiled coins; it has created a latticework of financial instruments that reflect and refract BTC price action. MSTR is no longer merely equity; it has become a high-beta Bitcoin play. STRK and STRF are yield-bearing hybrids, offering fixed returns yet functioning like risk instruments in a crypto-linked treasury experiment.The structural concern is this: By tying every new yield product, equity issuance and debt vehicle to Bitcoin, Strategy has effectively replaced diversification with correlation. Critics argue there is no hedge here, only degrees of bullishness.This raises the concern that a company can maintain corporate solvency and investor trust when its financial ecosystem is built atop the volatility of a single, historically unstable asset.Leveraged and inverse productsWhere there is heat, there will be leverage. The market has responded to Strategy’s gravitational pull by creating a suite of leveraged and inverse products tied to MSTR, giving retail and institutional players access to turbocharged Bitcoin exposure without holding the asset directly.Investors seeking amplified returns in anticipation of price gains can deploy strategies such as MSTU (T Rex) or MSTX (Defiance), both offering 2x long daily returns, or MST3.L, which provides 3x long exposure listed in London.Conversely, investors expecting price declines might choose SMST, offering 2x short exposure, or MSTS.L and 3SMI, each providing 3x short exposure listed in London.These instruments are typically employed by traders looking for short-term directional bets and should be handled cautiously due to daily reset mechanics and volatility risks.These are not traditional ETFs. They are complex, synthetic instruments with daily reset mechanisms and inherent decay risks. Volatility drag ensures that even in a sideways market, leveraged longs underperform. For shorts, the risk of a short squeeze, particularly in parabolic bull runs, is ever-present.Related: Trade war puts Bitcoin’s status as safe-haven asset in doubtIn practical terms, these products allow traders to speculate on MSTR’s price with minimal capital outlay. But they also amplify misalignment. A trader betting on Bitcoin’s month-long trend might find that their 3x long MSTR ETF underperforms expectations due to compounding losses on down days.The strategic risk here lies in mismatch: Retail investors may perceive these ETFs as direct Bitcoin exposure with leverage. In reality, they are trading a proxy of a proxy, subject to corporate news, dilution and macro shifts.Exposure at different levels of the Strategyverse. Source: Dr. Michael TaboneIs Strategy’s strategy conviction or leverage risk?Between 2020 and 2025, Strategy has executed over a dozen capital raises via convertible notes, ATM equity programs and, most recently, the STRF preferred offering priced at a 10% yield. The March 2025 raise helped fund the latest $1.92-billion Bitcoin buy.It is not just about buying Bitcoin. It is about the market constructing a meta-structure where every market instrument, common stock, preferred shares and synthetic ETFs feeds into the same gravitational pull. Each capital raise buys more Bitcoin. Each purchase pushes up sentiment. Each ETF amplifies exposure. This feedback loop has become the hallmark of Strategy’s financial architecture.With each new issuance, however, dilution risk grows. STRK and STRF investors depend not only on Strategy’s solvency but also on Bitcoin’s long-term appreciation. If BTC stumbles into a prolonged bear market, can those 10% yields continue? For investors, Strategy’s approach presents clear opportunities and risks. It offers a streamlined pathway for gaining exposure to Bitcoin through familiar financial instruments, combining elements of equity, fixed income and derivatives. At the same time, investors must carefully consider the volatility of Bitcoin itself, the potential impacts of dilution from continuous capital raises, and the overall health of Strategy’s balance sheet.Ultimately, the investment outcome will heavily depend on the trajectory of cryptocurrency markets, Strategy’s financial management and evolving regulatory landscapes.Magazine: Financial nihilism in crypto is over — It’s time to dream big again
First Digital redeems $26M after FDUSD depeg, dismisses Sun insolvency claims
First Digital Trust (FDT) has redeemed almost $26 million in stablecoin withdrawals after its FDUSD token briefly lost its US dollar peg following allegations of insolvency by Tron founder Justin Sun.First Digital USD (FDUSD) briefly depegged on April 2, falling as low as $0.87 after Sun claimed that First Digital was insolvent.On April 4, Sun doubled down on his allegations, claiming the firm had transferred over $450 million of customer funds to a Dubai-based entity and that it violated Hong Kong securities regulations.Source: H.E. Justin Sun“FDT transferred $456 million of its custodial clients to a private company in Dubai without their authorization and has not yet returned the money,” Sun claimed.FDT denies insolvency, accuses Sun and Techeryx of deflecting blameFollowing Sun’s claims, First Digital assured users that it is solvent and that FDUSD remains fully backed and redeemable.“We categorically deny any and all claims of FDT being involved in a coordinated scheme or misappropriation of funds,” FDT said in a statement on X on April 3.Source: First DigitalIt also alleged that Techteryx, the issuer of TrueUSD (TUSD) stablecoin, and Sun are “attempting to deflect the blame” and evade their own obligations to properly manage TUSD reserves. FDT stated:“Techteryx and Justin Sun’s suggestion of FDT being insolvent is not only factually incorrect, but it is a malicious attempt to damage the reputation and market standing of FDT and stablecoin”Despite the claims, blockchain data from Etherscan shows First Digital has honored about $25.8 million in FDUSD redemptions since the incident.“We continue to process redemptions smoothly, demonstrating the fortitude of FDUSD,” First Digital wrote in another X post on April 3.FDUSD redemptions. Source: Etherscan When users redeem FDUSD for US dollars, the corresponding amount of FDUSD is burned onchain for the stablecoin to maintain a 1-to-1 peg with the US dollar and ensure the circulating supply matches reserves.Sun announces a $50 million bounty to recover TUSD reservesAmid the ongoing dispute, Sun announced on April 4 a $50 million bounty program offered to recover the TUSD reserves “misappropriated by bad actors, including FDT.”The bounty amount is equivalent to about 10% of Sun’s liquidity support or the stolen TUSD reserves, he said, adding that the program will be fully transparent, with an official portal launching soon.Source: H.E. Justin SunIn another post on X, Sun also pledged to support Techteryx and make sure to bring “all fraudsters under the full force of the law.”Stablecoin depegs “greater systemic risk” than Bitcoin crashStablecoins depegs pose “a greater systemic risk” to crypto than a Bitcoin (BTC) crash, as “stablecoins are integral to liquidity, DeFi and user trust,” according to Gracy Chen, CEO of Bitget.Stablecoin depegs can cause “cascading failures like the TerraUSD collapse in 2022,” Chen told Cointelegraph, adding:“Current transparency, collateral quality and accountability among leading stablecoin issuers are insufficient — Tether’s lack of full audits, USDC’s exposure to banking risks and algorithmic stablecoins’ fragility highlight the market’s vulnerability to the next depeg event.”“To mitigate risks, the market should enforce real-time audits, prioritize high-quality collateral like US Treasurys, strengthen regulatory oversight and diversify stablecoin usage to reduce reliance on a few dominant players,” Chen added.Related: Wintermute transfers $75M FDUSD since depegs, in $3M arbitrage opportunityIn May 2022, the $40 billion Terra ecosystem collapsed, erasing tens of billions of dollars of value in days. Terra’s algorithmic stablecoin, TerraUSD (UST), had yielded an over 20% annual percentage yield (APY) on Anchor Protocol before its collapse.As UST lost its dollar peg, crashing to a low of around $0.30, Terraform Labs co-founder Do Kwon took to X (then Twitter) to share his rescue plan. At the same time, the value of sister token LUNA — once a top 10 crypto project by market capitalization — plunged over 98% to $0.84. LUNA was trading north of $120 in early April 2022.Additional reporting by Helen Partz.Magazine: Financial nihilism in crypto is over — It’s time to dream big again
The new trade tariffs announced by US President Donald Trump may place added pressure on the Bitcoin mining ecosystem both domestically and globally, according to one industry executive.While the US is home to Bitcoin (BTC) mining manufacturing firms such as Auradine, it’s still “not possible to make the whole supply chain, including materials, US-based,” Kristian Csepcsar, chief marketing officer at BTC mining tech provider Braiins, told Cointelegraph.On April 2, Trump announced sweeping tariffs, imposing a 10% tariff on all countries that export to the US and introducing “reciprocal” levies targeting America’s key trading partners.Community members have debated the potential effects of the tariffs on Bitcoin, with some saying their impact has been overstated, while others see them as a significant threat.Tariffs compound existing mining challengesCsepcsar said the mining industry is already experiencing tough times, pointing to key indicators like the BTC hashprice.Hashprice — a measure of a miner’s daily revenue per unit of hash power spent to mine BTC blocks — has been on the decline since 2022 and dropped to all-time lows of $50 for the first time in 2024.According to data from Bitbo, the BTC hashprice was still hovering around all-time low levels of $53 on March 30.Bitcoin hashprice since late 2013. Source: Bitbo“Hashprice is the key metric miners follow to understand their bottom line. It is how many dollars one terahash makes a day. A key profitability metric, and it is at all-time lows, ever,” Csepcsar said.He added that mining equipment tariffs were already increasing under the Biden administration in 2024, and cited comments from Summer Meng, general manager at Chinese crypto mining supplier Bitmars.Source: Summer Meng“But they keep getting stricter under Trump,” Csepcsar added, referring to companies such as the China-based Bitmain — the world’s largest ASIC manufacturer — which is subject to the new tariffs.Trump’s latest measures include a 34% additional tariff on top of an existing 20% levy for Chinese mining imports. In response, China reportedly imposed its own retaliatory tariffs on April 4.BTC mining firms to “lose in the short term”Csepcsar also noted that cutting-edge chips for crypto mining are currently massively produced in countries like Taiwan and South Korea, which were hit by new 32% and 25% tariffs, respectively.“It will take a decade for the US to catch up with cutting-edge chip manufacturing. So again, companies, including American ones, lose in the short term,” he said.Source: jmhorpCsepcsar also observed that some countries in the Commonwealth of Independent States region, including Russia and Kazakhstan, have been beefing up mining efforts and could potentially overtake the US in hashrate dominance.Related: Bitcoin mining using coal energy down 43% since 2011 — Report“If we continue to see trade war, these regions with low tariffs and more favorable mining conditions can see a major boom,” Csepcsar warned.As the newly announced tariffs potentially hurt Bitcoin mining both globally and in the US, it may become more difficult for Trump to keep his promise of making the US the global mining leader.Trump’s stance on crypto has shifted multiple times over the years. As his administration embraces a more pro-crypto agenda, it remains to be seen how the latest economic policies will impact his long-term strategy for digital assets.Magazine: Bitcoin ATH sooner than expected? XRP may drop 40%, and more: Hodler’s Digest, March 23 – 29
Malta regulator fines OKX crypto exchange $1.2M for past AML breaches
Update (April 4, 1:45 pm UTC: This article has been updated to add a comment from an OKX spokesperson.Cryptocurrency exchange OKX is under regulatory scrutiny in Europe after Maltese authorities issued a fine for violations of Anti-Money Laundering (AML) laws in the past.Malta’s Financial Intelligence Analysis Unit (FIAU) fined Okcoin Europe — OKX’s Europe-based arm — 1.1 million euros ($1.2 million) after detecting multiple AML failures on the platform in 2023, the authority announced on April 3.While admitting that OKX has significantly improved its AML policies in the past 18 months, the authority “could not ignore” its compliance failures from 2023, “some of which were deemed to be serious and systematic,” the FIAU said.OKX was among the first crypto exchanges to receive a license under Europe’s new Markets in Crypto-Assets (MiCA) regulation via its Malta hub in January 2025.Specifics of the violationsThe FIAU stated that at the time of the compliance examination in 2023, OKX compiled a business risk assessment (BRA) in an attempt to identify threats and vulnerabilities.The regulators found multiple deficiencies within the BRA’s methodology, making OKX unable to properly access the money laundering risks it was exposed to and to take necessary measures to manage them, it said.Some of those risks included potential threats from the use of cryptocurrency mixers or tumblers, privacy coins, stablecoins and the usage of tokens on decentralized exchanges.An excerpt from FIAU’s penalty statement to Okcoin Europe. Source: FIAUThe FIAU statement also mentioned money laundering risks associated with Okcoin Europe’s exposure to other jurisdictions despite its pledge to only service European customers. It stated:“Despite the company’s strategy adopted to only service European-based customers, it was essential to also consider the potential [money laundering/financing terrorism exposure emanating from other jurisdictions, including from where the sources of the customers’ funding originated.”A spokesperson for OKX did not respond to Cointelegraph’s request to comment on whether the exchange admitted to such wrongdoing in the past.“With this chapter behind us, OKX remains focused on the future — continuing to build a secure, transparent, and compliant platform for our users worldwide,” the representative said.Controversy over OKX and Bybit hackThe news on the $1.2 million penalty in Malta came soon after Bloomberg in March reported that European Union regulators were probing OKX over its potential role in facilitating the laundering of $100 million in funds from the Bybit hack.Bybit CEO Ben Zhou previously claimed that OKX’s Web3 proxy allowed hackers to launder roughly $100 million, or 40,233 Ether (ETH), from the $1.5 billion hack, which occurred in February 2025.Related: Binance ends Tether USDT trading in Europe to comply with MiCA rulesIn response to Zhou’s allegations, OKX denied claims that there were any ongoing investigations by the EU authorities, adding that “Bybit’s statements are spreading misinformation.”Source: OKXThe latest news from Malta’s FIAU also followed recent reports suggesting that OKX hired former New York Governor Andrew Cuomo to advise it over the federal criminal investigation leading to its plea and a $505 million penalty payment in the US.OKX’s new penalty in Malta sets a precedent in the context of regulators dealing with past compliance violations by MiCA-licensed companies, showing that the license does not spare the firms from responsibility for past breaches.Magazine: Stablecoin for cyber-scammers launches, Sony L2 drama: Asia Express
