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Interview with the "1800 Bitcoin" Claimant: The Current State of the Bitcoin Ecosystem
Bitcoin, as the most secure consensus cryptocurrency, has seen various technological explorations and capital inflows in different directions within a year, driving a brief prosperity but also exposing the complex vested interests and potential issues behind it. Behind it lies a complex game of interests among rule makers and participants. Last week, the Bitcoin staking protocol Solv Protocol found itself in a public relations storm due to public accusations from the staking whale AZ and the Bitcoin ecosystem's DA project Nubit, making topics like a bailout protocol and double collateralization quickly become the community's focus of attention.
As a result, BlockBeats engaged in a dialogue with AZ, who not only shared her logic of operation since entering the industry but also addressed for the first time the rumors surrounding Solv, including controversial topics such as a bailout protocol and double collateralization. This article provides us with a unique perspective on the operation of whales in the crypto sphere and project ecosystems, as well as some "dirty tricks" in the Bitcoin ecosystem, such as agreement trading between project parties and whales, as well as gray operations in liquidity management. In this game called consensus, whales holding the chips are in a tug-of-war with project parties who set the rules, while ordinary investors are often forced to be bystanders who cannot influence the outcome.
Below is the full interview content, reorganized for easier reading:
BlockBeats: Share your cryptocurrency trading experience.
AZ: Let me first address a very, very magical rumor. I was accused of working at a Singapore clubhouse, helping many tycoons manage Bitcoin, acting as a front for them to generate profits. If I were really managing money for many tycoons, how could they allow me to be so high-profile online? Either they would have helped me solve various relationship issues long ago, or they would have shut me up long ago and not let me prance around online, right?
BlockBeats: When did you enter the industry, and please briefly share your cryptocurrency trading experience?
AZ: I bought my first Bitcoin in 2017, and I really just held onto it and didn't trade much. At most, I used Ethereum to buy some Dogecoin, a trendy meme, but I never exchanged Bitcoin for other coins; I just held onto it.
BlockBeats: Why did you buy Bitcoin in 2017 then?
AZ: The story goes back to 2015 when I caught the first wave of social e-commerce prosperity. At that time, the cost of traffic was very low, almost free, and I made some money from it. However, in 2019, this story came to an end. During that period, I often went to Europe to study craft fabrics, but because of the limited RMB foreign exchange quota, fund flows had always been a headache for me. In 2017, a friend's friend gave me a Bitcoin. I remember his last name was Fan, and we were in Shanghai at the time. After receiving this Bitcoin, I inadvertently discovered how convenient it was to move funds in and out with it. Because of this, I earnestly read the Bitcoin whitepaper, and most of my profits were invested in it, which I have not touched. I am really grateful to Satoshi Nakamoto; he made me buy it.
Image Source: AZ Social Account
BlockBeats: So are you mainly earning passive income with Bitcoin now?
AZ: I also invest in some projects. Overall, I tend to be cautious, but indeed I have participated in many projects.
BlockBeats: Is it in your personal capacity?
AZ: I have a fund, and all investments are made through the fund. There is a team helping me manage it, but it is not very active, and there has been no PR. Besides investing in projects, I also invest as an LP in some funds.
「Guaranteed Yield Protocol Is Very Common」
BlockBeats: As a BTC whale, could you talk about your Bitcoin income and financial management strategy before and after the Bitcoin ecosystem became hot?
AZ: I am very simple-minded; I do not have any financial management techniques. I just keep my Bitcoin in a cold wallet and never place it in strange places to earn returns. I have always been very conservative and inactive, not actively seeking investment opportunities. I will not intentionally seek projects to earn yields through coin distribution as the risks are very high.
Aside from Solv, I am also involved in some quantitative activities. Babylon also involves staking, and I have had discussions with them. Then there are various project protocols that I have participated in.
BlockBeats: How do you view the Bitcoin ecosystem?
AZ: I have always believed in one thing: Bitcoin's liquidity will be completely unleashed. This release is not just about price appreciation but substantial applications. For example, pledging Bitcoin for borrowing under the premise of guaranteeing the principal's safety or participating in various on-chain rewards. This market is very, very large and is an issue that needs to be addressed.
During this process, we will see many projects emerge. I cannot directly tell you which project is good or bad because, as of now, no solution has truly emerged as an industry standard. What I can say is that I am very much looking forward to this happening, but I also believe that the current solutions are not perfect. In the future, there will definitely be more mature and perfect solutions emerging, driving this market further.
BlockBeats: What are the Playstyles in the Bitcoin Ecosystem?
AZ: I believe my playstyle is definitely different from others. Those truly powerful whales are very skillful, signing agreements, locking conditions, and dumping coins right after listing. However, I haven't engaged in those operations; I simply participated without using these so-called rules to increase profits. I guess that's the biggest difference between me and others.
BlockBeats: Is this playstyle a collusion between the project team and whales?
AZ: I do know that some people sign agreements, but I can't just directly send out agreements; they didn't sign with me either. Many clever whales make such deals since the whereabouts of the project team's tokens are completely opaque, and once listed on Binance, there are so many retail holders waiting to buy the dip. However, I can say very clearly that I have never personally engaged in such operations.
If I had indeed signed an agreement and received the money, I wouldn't be messing around here. Precisely because I haven't been involved in these things, believe in the fair distribution by the project team, and upon discovering a severely imbalanced distribution ratio, I started questioning where the remaining tokens of the project team went. That's why I am standing here, hoping to clarify things.
From Good Friend to Advocacy Target: Solv Founder in AZ's Eyes
BlockBeats: How did you come into contact with the Solv Protocol project?
AZ: I've known the founder of Solv for quite a while. When I arrived in Singapore in '22, I already knew him. Initially, a friend organized a dance event here, and after that, we often gathered to have fun.
Last March, we attended a conference in Dubai where Merlin's project team was also present. They were one of the earliest teams deeply involved in the BTC ecosystem and very familiar with the playstyle in this field. Solv used to operate in the GMX space. During that time, we were discussing Solv's transformation, primarily considering whether Solv should enter the BTC ecosystem next. If they decided to transition, we were all willing to support them and facilitate their actions.
I distinctly remember that at the time, Solv's official account posted many messages thanking the Merlin team for their support. Solv's successful transition to the BTC ecosystem and its subsequent listing on Binance today are closely intertwined with the support we provided back then.
As for why I got involved with the Solv project, I actually knew about it before it was Solv BTC. We were the ones discussing and planning this direction together. So, I believe that Solv's current success in the BTCFi field is also due to my contributions.
BlockBeats: Have you signed a whale profit protection agreement?
AZ: The thing is, there was no agreement between him and me. Because initially, we were driving this thing together, and our relationship was more like partners than clients. Therefore, naturally, there was no profit protection agreement. Our verbal agreement was very simple: we do this thing together, share the profits when we make money, and doing the thing well is the most important. But now it seems that it has completely changed, and there is no sharing at all.
However, later on, he did give many large holders a profit protection agreement, so he had to dilute the interests of us early participants. After all, initially, we just verbally promised to work together and share the profits, while those who joined later appeared more as clients. As the project team, in order to attract the money from these clients, he certainly needed to offer more attractive terms, such as profit protection agreements.
BlockBeats: Do other projects also have a similar situation?
AZ: Before Solv, I had never done anything like this, but after Solv, if someone came to me today asking for funding support, I would be much more cautious. It is not only about profit protection agreements, but more importantly, I would conduct a very comprehensive audit of the project team's character, integrity, background.
BlockBeats: Indeed, this is very necessary.
AZ: We often hang out together, including going to Dubai, going to South Korea, we eat together, club together, and even fly back together. I used to trust him very much, thinking we were good friends.
BlockBeats: Since deciding to participate in this project in March last year, what requirements or specific details did the project team have for large holders throughout the process?
AZ: From day one until now, I can clearly say that all requirements and rules were set by the project team, and I followed them entirely. All this information can be easily found in their tweets and official website. As for anyone questioning the cleanliness of my source of funds or saying that I am faking TVL, I can only say that all my actions were based on the rules and requirements of the project team, every transaction is clear, and can withstand thorough scrutiny.
The main request from the project team was actually quite simple: they asked me to lock up my Bitcoin liquidity and provide it to them. At the beginning, they told me it was a three-month project that only required locking the Bitcoin liquidity for three months. At that time, I knew the bull market was about to come, and I had originally planned to put that money into Binance for fixed income. However, they strongly insisted that I lock it up for three months with them. I followed their request and provided the Bitcoin to them. After three months passed, they kept postponing, failing to fulfill their initial promise at all. This repeated delay not only violated the initial trust but also left me very disappointed in their way of operating.
BlockBeats: During the staking period, how often did you communicate with the Solv team, and what were the main topics of your discussions?
AZ: At the beginning of the staking, Ryan Zhou was very enthusiastic towards me. He would contact me to explain the project's situation and keep me informed of the progress. About two to three months into the staking, although we were supposed to list on Binance, it was continuously delayed. During that time, he often invited me to meals and outings, and whenever he hosted dinners for major clients, he would always invite me. He even came to my house to have longevity noodles with me on my birthday and gave me a YSL bag as a birthday gift.
Image Source: AZ's social account
Our relationship was really good before he promised a guaranteed return to other major holders. I even felt he was my best male friend in Singapore and someone I trusted a lot. I would tell him everything, including seeking his opinion on some projects and listening to his thoughts. Then, when Babylon launched, I heard he started signing guaranteed return agreements with others. To fulfill these agreements, he naturally had to dilute my share of benefits.
BlockBeats: Around what time did this turning point occur?
AZ: Around October, I guess. I think he knew he was going to list on Binance or maybe because he made a lot of promises to others, he basically stopped responding to my messages. I don't know if he was trying to cut me off, but there must be some reason why a person who has supported for so long, including someone with such a good relationship, would suddenly ignore me. I felt something was wrong from that time.
BlockBeats: So when did you roughly find out about him signing guaranteed agreements with other major holders?
AZ: It will be launched shortly before the first phase of Babylon.
BlockBeats: What was your expected return before contacting him and other whales?
AZ: I have never considered myself as one of his clients. We always discussed this matter together, and I supported you from the very first day, so my expectation must be that no matter how much money you give me, at the very least, you must provide me with a fair and just explanation.
I was always at the top of the leaderboard in the first four months, and only in the last two months was I pushed out. I feel that being only in the top 0.05% is unacceptable. I will not demand a specific number of points from you. I believe that in any case, you must positively address my concerns. Profit is no longer important now, and I am not keeping a single cent for myself anyway.
BlockBeats: You transferred these 1800 BTC to Solv using mBTC. What was the situation like when participating in Merlin? Some people say you took advantage of multiple returns.
AZ: I did indeed use mBTC for the conversion, and everything was done securely and in compliance. All the money was very clean. If someone claims that I am not clean and can provide evidence that my SOLVBTC is fake, then the real BTC will be in Merlin.
I only received Solv after Merlin distributed the coins. The original plan was to take it to Binance for fixed income after Merlin, with a 5% annual yield for 7 months, which would have been $4.75 million. It was precisely because the Solv founder told me how great their project was and that it could provide returns well above fixed income that I agreed to hold it for an additional seven months. Now they are saying they will give me SOLV tokens equivalent to $500,000, which is not even a fraction of the fixed income. So, there is no scenario of taking advantage of multiple returns. Besides, I believe it's quite normal for a DeFi protocol to have 5 layers of returns. However, it's true that I did not take advantage of multiple returns.
BlockBeats: So, indeed, there is a phenomenon of double-staking, correct?
AZ: There is indeed such a phenomenon in the market. For example, if I have provided my BTC to Solv and it has been counted once, some project teams may add an extra layer of returns to my TVL (total value locked). Everyone is colluding together. For instance, it would be sufficient to provide him with this address, but I have never done such a thing. I can show them the operational records for every transaction I have made. All the BTC transactions are clean and transparent. I have absolutely never engaged in such practices.
BlockBeats: After knowing your profit distribution, have you communicated with other major holders?
AZ: Yes, another major supporter of Solv approached me, asking how the 0.5% was calculated.
BlockBeats: How do you evaluate the Solv project?
AZ: When it comes to a project, the integrity of the founding team is crucial. In the case of this project, it has been in development for 4 years, constantly pivoting directions, and has finally been listed on Binance. However, it is disappointing that they chose not to share the benefits with those who supported them from the beginning.
BlockBeats: Why did you choose to seek justice on Twitter?
AZ: I spent nearly two months contacting everyone I could find around him—his investors, close friends, or anyone even remotely associated with him. I conveyed my message to all of them, hoping he would reach out to me. However, he never responded, not even a single word. In such a situation, I really had no other choice. I had to resort to publicly addressing this online.
BlockBeats: So far, have your social media justice efforts achieved your initial objectives?
AZ: If my initial objective was to have the founder address my concerns, then it seems like I haven't achieved that because he still ignores me, and the entire team ignores me. But if we look at it from the perspective of preventing being scammed by such project teams, then I think I have achieved it because I launched an AI Justice Agent. There are so many blockchain project scams; today it's him, tomorrow it's someone else, everyone is deceiving, so I think having an anti-scam agent is very necessary.
BlockBeats: In light of recent events, has the other party responded to your previous demands or shown any change in attitude?
AZ: We had a call on January 3, and it seemed like we talked a lot, yet it also seemed like we didn't talk about anything. He asked me how he should compensate me now, how much money I wanted. I made it clear to him that I would not ask him for a penny. Because of doubts about his integrity, I specifically recorded the call, so if he continues to badmouth me in public, I can release it at any time.
My exact words at the time were: "I will not actively ask you for a penny. I have made so many contributions to this project, and it is unfair of you to burn bridges at this point. You should be the one proposing a compensation plan, and then it is up to me to decide whether to accept it or not."
Later, one of his investors acted as an intermediary to communicate, suggesting to give me an additional 1 point FDV directly from the team's share. This investor asked me if I thought it was reasonable, and I thought it was. After all, my funds have made up 10% of your TVL for a long time, even reaching a percentage of tens at certain stages. Based on the 9% airdrop proportion, giving me 1/9 of the FDV is a very normal ratio.
However, I also made it clear that I would not actively ask you for this benefit. If you truly wish to give it to me, then we can discuss it further. That was the entirety of our conversation that time. He even promised to call me early the next morning, but up to now, I have not received his call. What's more outrageous is that he has been spreading rumors outside, claiming that I asked him for $20 million.
BlockBeats: How do you view the current community sentiment towards you receiving tokens?
AZ: First, I donated all the earnings from staking 1800 Bitcoins for seven months to the community. Since the first day I spoke out, I have been transparent. I'm not even accepting any earnings now. They just pushed me too far, so I just want to spend money to have netizens scold them. Not like the Solv team, resorting to dirty tricks.
Furthermore, I believe that having an AI agent for rights protection is a very necessary presence, especially in an environment like the cryptocurrency industry where scams are rampant. I think there should be a dedicated track for rights protection to provide support to more deceived individuals. AIXBT only talks about how good the project is; it is AI friendly to project teams. So, I want to create an AI that is friendly to retail investors. Regarding this earnings, I didn't plan on keeping it anyway, so I must find a way to give it to the netizens who helped me speak out, and this seems to be the best way to achieve that.
I also want to make it clear to everyone that I do not encourage anyone to buy this token. Because you can simply earn the airdrop by completing tasks, there is no need to buy it. I will buy it myself, and once you receive the airdrop, you can just sell it immediately, right? There's no need to take on additional risks.
Furthermore, I only hold 1% of the tokens. Initially, I reserved 4%, but 3% of that has already been transferred to ZachXBT, the Twitter account that inspired me to do this. I have publicly @ mentioned him, and you can check the transfer address; all records are crystal clear and transparent.
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$COIN Joins S&P 500, but Coinbase Isn't Celebrating
On May 13, S&P Dow Jones Indices announced that Coinbase would officially replace Discover Financial Services in the S&P 500 on May 19. While other companies like Block and MicroStrategy, closely tied to Bitcoin, were already part of the S&P 500, Coinbase became the first cryptocurrency exchange whose primary business is in the index. This also signifies that cryptocurrency is gradually moving from the fringes to the mainstream in the U.S.
On the day of the announcement, Coinbase's stock price surged by 23%, surpassing the $250 mark. However, just 3 days later, Coinbase was hit by two consecutive events: a hack where employees were bribed to steal customer data and a demand for a $20 million ransom, and an investigation by the U.S. Securities and Exchange Commission (SEC) into the authenticity of its claim of having over 100 million "verified users" in its securities filings and marketing materials. These two events acted as mini-bombs, and at the time of writing, Coinbase's stock had already dropped by over 7.3%.
Coincidentally, Discover Financial Services, being replaced by Coinbase, can also be considered the "Coinbase" of the previous payment era. Discover is a U.S.-based digital banking and payment services company headquartered in Illinois, founded in 1960. Its payment network, Discover Network, is the fourth largest payment network apart from Visa, Mastercard, and American Express.
In April, after the approval of the acquisition of Discover by the sixth-largest U.S. bank, Capital One, this well-established digital banking company of over 60 years smoothly handed over its S&P 500 "seat" to this emerging cryptocurrency "bank." This unexpected coincidence also portrayed the handover between the new and old eras in Coinbase's entry into the S&P 500, resembling a relay race scene. However, this relay baton also brought Coinbase's accumulated "external troubles and internal strife" to a tipping point.
Over the past decade, cryptocurrency exchanges have been the most stable "profit machines." They play a role in providing liquidity to the entire industry and rely on trading fees to sustain their operations. However, with the comprehensive rollout of ETF products in the U.S. market, this profit model is facing unprecedented challenges. As the leader in the "American stack," with over 80% of its business coming from the U.S., Coinbase is most affected by this.
Starting from the approval of Bitcoin and Ethereum spot ETFs, traditional financial capital has significantly onboarded users and funds that originally belonged to exchanges in a more cost-effective, compliant, and transparent manner. The transaction fee revenue of cryptocurrency exchanges has started to decline, and this trend may further intensify in the coming months.
According to Coinbase's 2024 Q4 financial report, the platform's total trading revenue was $417 million, a 45% year-on-year decrease. The contribution of BTC and ETH's trading revenue dropped from 65% in the same period last year to less than 50%.
This decline is not a result of a decrease in market enthusiasm. In fact, since the approval of the Bitcoin ETF in January 2024, the inflow of BTC into the U.S. market has continued to reach new highs, with asset management giants like BlackRock and Fidelity rapidly expanding their management scale. Data shows that BlackRock's iShares Bitcoin ETF (IBIT) alone has surpassed $17 billion in assets under management. As of mid-May 2025, the cumulative net inflow of 11 major institutional Bitcoin spot ETFs on the market has exceeded $41.5 billion, with a total net asset value of $1214.69 billion, accounting for approximately 5.91% of the total Bitcoin market capitalization.
Institutional investors and some retail investors are shifting towards ETF products, partly due to compliance and tax considerations. On one hand, ETFs have much lower trading costs compared to cryptocurrency exchanges. While Coinbase's spot trading fee rate varies annually in a tiered manner but averages around 1.49%, for example, the management fee for IBIT ETF is only 0.25%, and the majority of ETF institution fees fluctuate around 0.15% to 0.25%.
In other words, the more rational users are, the more likely they are to move from exchanges to ETF products, especially for investors aiming for long-term holdings.
According to multiple sources, several institutions, including VanEck and Grayscale, have submitted applications to the SEC for a Solana (SOL) ETF, with some institutions also planning to submit an XRP ETF proposal. Once approved, this may trigger a new round of fund migration. According to a report submitted by Coinbase to the SEC, as of April, the platform's trading revenue from XRP and Solana accounted for 18% and 10%, nearly one-third of the platform's fee revenue.
However, the Bitcoin and Ethereum ETFs passed in 2024 also reduced the fees for these two tokens on Coinbase from 30% and 15% to 26% and 10%, respectively. If the SOL and XRP ETFs are approved, it will further undermine the core fee revenue of exchanges like Coinbase.
The expansion of ETF products is gradually weakening the financial intermediary status of cryptocurrency exchanges. From their original roles as matchmakers and clearers to now gradually becoming mere "on-ramps and off-ramps" for funds, exchanges are seeing their marginal value squeezed by ETFs.
On May 12, 2025, SEC Chairman Paul S. Atkins gave a keynote speech at the Tokenization and Cryptocurrency Working Group roundtable. The theme of his speech revolved around "It is a new day at the SEC," where he indicated that the SEC would not approach enforcement and regulation the same way as before but would instead pave the way for cryptocurrency assets in the U.S. market.
With signs of cryptocurrency compliance such as the SEC's "NEW DAY" declaration, an increasing number of traditional brokerages are attempting to enter the cryptocurrency industry. One of the most representative cases is the well-known U.S. brokerage Robinhood, which began expanding its crypto business in 2018. By the time of its IPO in 2021, Robinhood's crypto business revenue accounted for over 50% of the company, with a significant boost from the Dogecoin "moonshot" promoted by Musk.
In Q1 2025 earnings report, Robinhood showcased strong growth, especially in revenue from cryptocurrency and options trading. Fueled by Trump's Memecoin, cryptocurrency-related revenue reached $250 million, nearly doubling year-over-year. Consequently, Robinhood Gold subscription users reached 3.5 million, a 90% increase from the previous year, with the rapid growth of Robinhood Gold providing the company with a stable source of income.
Meanwhile, RobinHood is actively pursuing acquisitions in the cryptocurrency space. In 2024, it announced a $2 billion acquisition of the long-standing European cryptocurrency exchange Bitstamp. Additionally, Canada's largest cryptocurrency CEX, WonderFi, which recently went public on the Toronto Stock Exchange, also announced its integration with RobinHood Crypto. After obtaining virtual asset licenses in the UK, Canada, Singapore, and other markets, RobinHood has taken a proactive approach in the compliant cryptocurrency trading market.
Furthermore, an increasing number of brokerage firms are exploring the same path. Futu Securities, Tiger Brokers, and others are also dipping their toes into cryptocurrency trading, with some having applied for or obtained the VA license from the Hong Kong SFC. Although their user bases are currently small, traditional brokerages have a natural advantage in user trust, regulatory licenses, and low fee structures. This could pose a threat to native cryptocurrency platforms in the future.
In April 2025, security researchers discovered that some Coinbase user data was leaked on the dark web. While the platform initially responded by attributing it to a "technical misinformation," it still raised concerns among users regarding its security and privacy protection. Just two days before Dow Jones Indexes announced Coinbase's addition to the S&P 500 Index, on May 11, 2025, Coinbase received an email from an unknown threat actor claiming to have obtained customer account information and internal documents, demanding a $20 million ransom to keep the data private. Subsequent investigations confirmed the data breach.
Cybercriminals obtained the data by bribing overseas customer service agents and support staff, mainly in "non-U.S. regions such as India." These agents abused their access to Coinbase's internal customer support system and stole customer data. As early as February this year, blockchain detective ZachXBT revealed on X platform that between December 2024 and January 2025, Coinbase users lost over $65 million to social engineering scams, with the actual amount potentially higher.
Among the victims was a well-known figure, 67-year-old Ed Suman, an established artist in the art world for nearly two decades, having been involved in the creation of artworks such as Jeff Koons' "Balloon Dog" sculpture. Earlier this year, he fell victim to an impersonation scam involving fake Coinbase customer support, resulting in a loss of over $2 million in cryptocurrency. ZachXBT critiqued Coinbase for its inadequate handling of such scams, noting that other major exchanges have not faced similar issues and recommending Coinbase to enhance its security measures.
Amidst a series of ongoing social engineering incidents, although there has not been any impact on user assets at the technical level so far, it has raised concerns among many retail and institutional investors. Especially institutions holding massive assets on Coinbase. Just considering the U.S. BTC ETF institutions, as of mid-May 2025, they collectively hold nearly 840,000 BTC, and 75% of these are custodied by Coinbase. If we price BTC at $100,000, this amount reaches a staggering $63 billion, which is equivalent to the nominal GDP of two Iceland in the year 2024.
In addition, Coinbase Custody also serves over 300 institutional clients, including hedge funds, family offices, pension funds, and endowments. As of the Q1 2025 financial report, Coinbase's total assets under management (including institutional and retail clients) reached $404 billion. The specific amount of institutional custodied assets was not explicitly disclosed in the latest report, but it should still be over 50% based on the Q4 2024 report.
Once this security barrier is breached, not only could the rate of user attrition far exceed expectations, but more importantly, institutional trust in it would undermine the foundation of its business. Therefore, after a hacking event, Coinbase's stock price plummeted significantly.
Facing a decline in spot trading fee revenue, Coinbase is also accelerating its transformation, attempting to find growth opportunities in derivatives and emerging assets. Coinbase acquired a stake in the options platform Deribit at the end of 2024 and announced the official launch of perpetual contract products in 2025. This acquisition fills in Coinbase's gap in options trading and its relatively small global market share.
Deribit has a strong presence in non-U.S. markets, especially in Asia and Europe. The acquisition has enabled Coinbase to gain a dominant position in bitcoin and ethereum options trading on Deribit, accounting for approximately 80% of the global options trading volume, with daily trading volume remaining above $2 billion.
Meanwhile, 80-90% of Deribit's customer base consists of institutional investors, with their professionalism and liquidity in the Bitcoin and Ethereum options market highly favored by institutions. Coinbase's compliance advantage, coupled with its already robust institutional ecosystem, makes it even more suitable. By using institutions as an entry point, it can face the squeeze from giants like Binance and OKX in the derivatives market.
Facing a similar dilemma is Kraken, which is attempting to replicate Binance Futures' model in non-U.S. markets. Since the derivatives market relies more on professional users, fee rates are relatively higher and stickiness is stronger, making it a significant source of revenue for exchanges. In the first half of 2025, Kraken completed the acquisition of TradeStation Crypto and a futures exchange, aiming to build a complete derivatives trading ecosystem to hedge the risk of declining spot transaction fee income.
With the surge of Memecoin in 2024, Binance, OKX, and various CEX platforms began massively listing small-market-cap, highly volatile tokens to activate active trading users. Due to the wealth effect and trading activity of Memecoins, Coinbase was also forced to join the battle, successively listing popular tokens from the Solana ecosystem such as BOOK OF MEME and Dogwifhat. Although these coins are controversial, they are frequently traded, with fee rates several times higher than mainstream coins, serving as a "blood-boosting" method for spot trading.
However, due to its status as a publicly traded company, this practice is a riskier endeavor for Coinbase. Even in the current crypto-friendly environment, the SEC is still investigating whether tokens like SOL, ADA, and SAND constitute securities.
In addition to the forced transformation strategies carried out by the aforementioned CEXs, they are also starting to lay out RWAs and the most talked-about stablecoin payment fields, such as the PYUSD launched through a collaboration between Coinbase and Paypal, Coinbase's support for the Euro stablecoin EURC by Circle that complies with EU MiCA regulatory requirements, or the USD1 launched through a collaboration between Binance and WIFL. In the increasingly crowded trading field, many CEXs have shifted their focus from just the trading market to the application field.
The golden age of transaction fees has quietly ended, and the second half of the crypto exchange platform game has silently begun.
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Key Market Intelligence on May 14th, how much did you miss out on?
1.Binance Alpha Launches HIPPO, BLUE, and Other Tokens
2.Believe Ecosystem Tokens See General Rise, LAUNCHCOIN Surges Over 250% in 24 Hours
3.Tiger Securities Introduces Cryptocurrency Deposit and Withdrawal Service, Supports Mainstream Cryptocurrencies such as BTC and ETH
4.Current Bitcoin Rally Possibly Driven by Institutions, Retail Traders Yet to Join
5.Binance Wallet's New TGE Privasea AI Participation Requires a 198 Point Threshold, with a Point Consumption of 15
Source: Overheard on CT (tg: @overheardonct), Kaito
PUMP: Today's discussions about PUMP focus on its new creator revenue-sharing model: the platform will allocate 50% of PumpSwap revenue to token creators, sparking varied reactions from users. Some criticize the move as insufficient or even misleading, while others view it as a positive step the platform is taking to reward creators. Meanwhile, PUMP faces market pressure from emerging competitors like LetsBONKfun and Raydium, which are rapidly gaining market share. Users also express concerns about PUMP's sustainability and potential regulatory risks in the U.S., with discussions extending to the platform's impact on the entire memecoin ecosystem.
COINBASE: Today, Coinbase became the first crypto company to join the S&P 500 Index, replacing Discover Financial Services, sparking widespread industry attention. The entire crypto community views this milestone as a significant development, signaling that crypto assets are further integrating into the mainstream financial system. The news has sparked lively discussions on Twitter, with many users pointing out that this may attract more institutional investors to enter the Bitcoin and other cryptocurrency markets.
XRP: XRP became the focal point of today's crypto discussion, with its significant market movements and strategic advances drawing attention. XRP has surpassed USDT to become the third-largest cryptocurrency by market capitalization, sparking market excitement and discussions about its future potential. The surge in market capitalization and price is believed to be related to increasing institutional interest, deepening strategic partnerships, and its role in the crypto ecosystem. Additionally, XRP's integration into multiple financial systems and its potential as a macro asset class are also seen as key factors driving the current market sentiment.
DYDX: Today's discussions about DYDX mainly focused on the dYdX Yapper Leaderboard launched by KaitoAI. The leaderboard aims to identify the most active community participants, with a total of $150,000 in rewards to be distributed over the first three seasons. This initiative has sparked broad community participation, with many users discussing the potential rewards and the incentive effect on the DYDX ecosystem. Meanwhile, progress on the ethDYDX to dYdX native chain migration and historical airdrop events have also been topics of discussion.
1. "What Is 'ICM'? Holding Up the $4 Billion Market Cap Solana's New Narrative"
Overnight, the hottest narrative in the crypto space has become "Internet Capital Markets," with a host of crypto projects and founders, led by the Solana ecosystem's new Launchpad platform Believe, releasing this phrase. Together with "Believe in something," it has become the new slogan heralding the onset of a bull market. What exactly is the so-called "Internet Capital Market," will it become a short-lived hype phrase like the Base ecosystem's previous Content Coin, and what related targets are available for selection?2.《LaunchCoin Surges 20x in One Day, How Did Believe Create a $200M Market Cap Shiba Inu After Going to Zero?｜100x Retrospective》
LAUNCHCOIN broke through a $200 million market cap today, with the long-lost liquidity and such a high market cap "Memecoin" almost bringing half of the on-chain crypto community CT into the fray. The community is crazily discussing this token, with half of it being FOMO and the other half being FUD. This token, originally issued by Believe founder Ben Pasternak under his personal identity, transformed into a new platform token after a renaming. From once going to zero to a $200 million market cap, what happened in between?May 14 On-chain Fund Flow
Within 24 hours, GOONC's market cap soared to 70 million, could GOONC be the next billion-dollar dog on the Believe platform?
Bitcoin has broken $100,000, Ethereum has surpassed 2500, and is Solana's hot streak about to make a comeback?
The current market is in a state of macro euphoria, with GOONC riding the wave today, skyrocketing 10x in just a few hours, reaching a market cap of tens of millions of dollars, trading volume soaring past 50 million, and rumors swirling that the developer may be from OpenAI (unconfirmed but intriguing enough).
A ludicrous and absurd Solana meme that some actually buy into.
GOONC is a meme coin that has sprouted from the "gooning" subculture, offering no technological innovation or practical use, its sole function being speculation.
It takes inspiration from an NSFW term "gooning," which refers to a person being deeply immersed in certain content (you know what), eventually entering a nearly religious-like trance.
In Reddit (such as r/GOONED, r/GoonCaves) and some counterculture media outlets (such as MEL Magazine in 2020), "gooning" has gradually transitioned from an adult label to a meme-addicted, digital content and virtual self-indulgence synonym, arguably the epitome of Degen spirit.
GOONC is playing around with this concept, packaging the addictive nature, uselessness, and irony of gooning into a tradable financial product. The project team has made it clear: "We do not solve blockchain problems, we only trade absurdity." Blunt but oddly genuine.
GOONC launched on May 13, 2025, using the meme coin launch platform Believe App's LaunchCoin module on Solana. This tool is highly Degen: zero technical barriers, a few clicks to create a coin, perfect for projects like GOONC that can come up with ideas out of the blue.
The mastermind behind GOONC is also quite something and is the most talked-about, with KOL @basedalexandoor on X platform (alias "Pata van Goon") personally involved. His profile even caught the attention of Marc Andreessen, co-founder of a16z, making onlookers unable to resist speculating if GOONC has a hint of OpenAI lineage.
While this 'OpenAI Endorsement' is currently just community speculation, it is definitely a good card to play to fuel hype. Saying "we are pure speculation" on one hand, while tagging a few "AI + a16z" on the other.
GOONC took off as soon as it launched. After its launch on May 13, 2025, its market capitalization skyrocketed to $22 million within 4 hours, with a trading volume exceeding $25.6 million in 24 hours. According to platform data, the first day of trading saw an astonishing +41,100% surge, soaring from $0.0000001 to $0.02, becoming a "missed-the-boat" situation.
GOONC quickly formed an active trading community post-launch, with a lot of discussion and trading signals appearing on X platform (such as the 292x return signal provided by DeBot). Liquidity pools on exchanges like Raydium and Meteora grew rapidly, supporting high trading volumes and price increases.
The real climax occurred between May 13 and May 14, with the market cap rising to $5.5 million in the morning and directly surpassing $55 million in the afternoon. By the 14th, it briefly approached a $70 million market cap, with the trading volume soaring to $59 million. Some community members even posted screenshots claiming an increase of +85,000%, creating a new myth out of the ruins.
As of 1:30 pm on May 14, the price stabilized around $0.039, with a total market cap and FDV both around $39.6 million, and a 24-hour trading volume of $5.43 million. Active platforms include XT.COM, LBank, Meteora, and others.
Although there was a slight pullback from the peak ($0.07), the coin's popularity remains strong. For a coin that relies purely on "irony + community + X post" to thrive, this performance is already at a stellar level.
Currently, the background of the token's development team is not transparent, increasing the potential risk of a rug pull. Rugcheck.xyz warns that the creator of the GOONC contract may have permission to modify the contract (e.g., change fees or mint additional tokens), posing certain security risks.
Community members speculate that the meteoric rise of GOONC may be the "last hurrah".
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$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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