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Bitcoin Turns 16: From Zero to $100,000, a Retrospective of BTC's Evolution
Original Article Title: "From Worthless to $2 Trillion Market Cap, the 16-Year Evolution of Bitcoin"
Original Source: Hualihualwai
If we were to choose the best-performing asset of the past decade and a half, undoubtedly, Bitcoin would be at the top of the list. Data shows that over the past 11 years, Bitcoin has been the best-performing asset class for 8 years, as shown in the graph below.
So, how did Bitcoin grow from being virtually worthless to a market cap exceeding $2 trillion? On the occasion of Bitcoin's 16th anniversary, let's take a moment to review the evolution of Bitcoin over the past 16 years:
(1) In 2009, Bitcoin Was Worth $0
On January 3, 2009 (2:15 AM Beijing time on January 4, 2009), Satoshi Nakamoto, on a small server in Helsinki, Finland, personally created the first block, known as the Genesis Block of Bitcoin, and received the system-generated reward of the first 50 bitcoins, thus bringing the first Bitcoin into the world. As shown in the image below.
At the same time, Satoshi Nakamoto embedded a message:
「The Times 03/Jan/2009 Chancellor on brink of second bailout for banks」
This deliberate reference to The Times' headline seems to reflect Satoshi's commentary on the economic challenges at the time and the potential need for an alternative financial system.
(2) In 2010, Bitcoin Reached a Peak Value of $0.5
On May 22, 2010, Bitcoin received its first market-value recognition, as on that day, a Bitcoin enthusiast named Laszlo Hanyecz used 10,000 bitcoins in his possession to purchase two pizzas. As shown in the image below.
At that time, the market value of these two pizzas was $30. If we calculate based on this value, then the price of 1 BTC would be equivalent to $0.003. This highly commemorative experimental attempt was also the first time BTC was priced in the real world, and later, people began celebrating May 22nd as "Bitcoin Pizza Day."
Entering the summer of 2010, Bitcoin began to see limited exchange/trading activities within a very niche circle of technical experts and financial enthusiasts, with the BitcoinTalk forum being the main platform for discussion and interaction among these individuals.
In July 2010, Mt. Gox (mentioned later in this text) was launched. Around this time, Bitcoin finally had its own "exchange price." By October of the same year, the price of Bitcoin had risen to $0.1, reaching a peak of $0.5 in November before dropping back to $0.3, a price that was maintained until the year's end.
In January 2010, Bitcoin's price was $0, in December 2011, it was $0.3, and the highest price that year was $0.5.
(3) In 2011, Bitcoin reached its highest value of $31.9
In January 2011, the Bitcoin trading price surpassed $1 for the first time, which was later featured and reported by Forbes magazine, marking a significant milestone. This event catalyzed the price of Bitcoin, which by the end of May 2011 had soared to $8.89.
On June 1st of the same year, Gawker, a U.S.-based gossip website (which closed in 2016), published an article stating that Bitcoin was gaining popularity on the Silk Road website. This further fueled Bitcoin's surge to $27, with the total market value of all Bitcoins in circulation reaching $130 million.
Note: The website Silk Road may be sensitive; interested individuals can Google it for more information. The site belonged to the Hei Market exchange website and operated from 2011 to 2013, allowing users to anonymously buy and sell various services or goods using Bitcoin, as shown in the image below. This certainly brought Bitcoin to a wider audience at the time but was also a controversial website. In October 2013, the U.S. FBI arrested the site's operator and shut down its operations, seizing a large amount of Bitcoin in the process.
In January 2011, the opening price of Bitcoin was $0.3, the closing price in December 2011 was $4.7, and the highest price of that year was $31.9.
（4）In 2012, Bitcoin reached its highest value of $15.4
In June 2012, Coinbase was officially established. That year, there were only a few exchanges providing Bitcoin trading, such as Mt. Gox and Bitstamp. On November 28 of the same year, Bitcoin went through its first halving, reducing the block reward from 50 BTC to 25 BTC. This event laid the foundation for Bitcoin's value by driving scarcity.
In January 2012, the opening price of Bitcoin was $4.7, the closing price in December 2012 was $13.5, and the highest price of that year was $15.4.
（5）In 2013, Bitcoin reached its highest value of $1156.14
On November 30, 2013, Bitcoin broke $1000 for the first time and reached $1156.14, marking Bitcoin's first major bull run. In the same year, Mt. Gox quickly rose to become the largest exchange at the time. At that time, almost 7 out of every 10 Bitcoin transactions were conducted on Mt. Gox.
In January 2013, the opening price of Bitcoin was $13.5, the closing price in December 2013 was $754.01, and the highest price of that year was $1156.14.
（6）In 2014, Bitcoin reached its highest value of $1017.12
One of the key events of that year was the collapse of Mt. Gox. In February 2014, Mt. Gox announced bankruptcy due to a hack that led to the theft of 850,000 Bitcoins. This event had a significant impact on Bitcoin at the time, resulting in a prolonged price decline and widespread concerns about cryptocurrency security. It also sparked protests from some Bitcoin holders at that time, as shown in the image below.
It was also in the same year that innovations such as multi-signature wallets began to go mainstream. In early 2014, only 0.02% of Bitcoin utilized this encryption technology for security. By the end of the year, this number had increased to 5%. Within a year, the daily Bitcoin transaction volume using multi-signature also increased by 79 times.
It was in March of the same year that the People's Bank of China issued the "Notice on Further Strengthening the Prevention of Bitcoin Risks," requiring banks and third-party payment institutions to close the accounts of domestic Bitcoin trading platforms. As shown in the image below.
The opening price of Bitcoin in January 2014 was $754.97, the closing price in December 2014 was $320.19, and the highest price of the year was $1017.12.
(7) The highest price of Bitcoin in 2015 was $495.56
This year was also the first true bear market for Bitcoin, but the price of Bitcoin continued to rise, indicating that Bitcoin was attracting more and more attention. Some individuals and institutions were starting to prepare for the next wave of encryption. As shown in the image below.
The opening price of Bitcoin in January 2015 was $320.43, the closing price in December 2015 was $430.57, and the highest price of the year was $495.56.
(8) The highest price of Bitcoin in 2016 was $979.40
On July 9, 2016, Bitcoin underwent its second halving, reducing the block reward from 25 BTC to 12.5 BTC. On April 28 of the same year, the popular gaming platform Steam announced it would accept Bitcoin as payment.
During this year, Bitcoin even made an appearance on CCTV, with Li Lin from Huobi being interviewed by CCTV, as shown in the image below.
Furthermore, it was also in this year that as the community focused on SegWit and the Lightning Network, the scalability debate of Bitcoin continued to escalate, laying the foundation for Bitcoin's future development.
The opening price of Bitcoin in January 2016 was $430.72, the closing price in December 2016 was $963.74, and the highest price of the same year was $979.40.
（9）The highest value of Bitcoin in 2017 was $20,089
In this year, Bitcoin ushered in its second bull market since its inception, also the largest crypto bull market people had experienced at that time. The price of Bitcoin successfully broke through $20,000 this year, with a full-year increase of 1984.66%. It was during this bull market that Big Whale officially entered this circle and got in touch with Bitcoin. I remember that the first transaction was just a tentative purchase of 2,000 RMB worth of pastries.
Additionally, many significant events took place this year, such as:
On August 1, 2017, Segregated Witness was successfully activated, and Bitcoin's first fork coin (Bitcoin Cash) emerged.
On September 4, 2017, the People's Bank of China and six other departments jointly issued the "Announcement on Preventing the Risks of Token Issuance Financing," classifying ICOs as illegal financial activities and suspending all related transactions in China. Later, this day was also referred to as the "94" event in the crypto world.
On September 14, 2017, six ministries once again issued a joint announcement to shut down all domestic cryptocurrency exchanges and prohibit them from providing channels for RMB-to-cryptocurrency exchanges. Subsequently, exchanges went offshore one after another, ushering in a new era of coin-to-coin and OTC trading.
On December 11, 2017, CBOE (Chicago Board Options Exchange) conducted futures trading with XBT as Bitcoin's code, marking the world's first Bitcoin futures listing.
On December 17, 2017, Bitcoin broke through its then all-time high, reaching $20,089.
During this bull market, due to Bitcoin's skyrocketing price and the ICO wealth generation movement, many stories of sudden wealth emerged, bringing global attention to Bitcoin.
Additionally, in this year, there were significant changes in the exchange ranking battle. In addition to Huobi and OKCoin originating from the 2013 bull market, exchanges represented by Binance were also established, presenting an era of flourishing exchanges.
In January 2017, the opening price of Bitcoin was $963.66, the closing price in December 2017 was $14,156.40, and the highest price of that year was $20,089.
（10）In 2018, Bitcoin reached its highest value of $17,712.40
With the collapse of the ICO craze, which signaled the end of the first round of speculative frenzy, and the price decline or extinction of thousands of altcoins, the crypto market ushered in a new bear market cycle. This year was also referred to by many as the "crypto winter." However, despite this, the price of Bitcoin remained relatively stable. As shown in the chart below.
In January 2018, the opening price of Bitcoin was $14,112.20, the closing price in December 2018 was $3,742.70, and the highest price of that year was $17,712.40.
From Satoshi Nakamoto's release of the Bitcoin whitepaper in 2008 to this year, Bitcoin has exactly gone through 10 years. Despite many twists and turns during this period, it seems that the world can no longer stop Bitcoin.
（11）In 2019, Bitcoin reached its highest value of $13,796.49
With the Lightning Network going live on the Bitcoin mainnet in March 2018, by 2019, some people had started paying attention to the Lightning Network, which could make Bitcoin payments faster and cheaper. However, the Bitcoin market in this year was quite challenging, with prices fluctuating alongside significant industry events, seemingly constantly attempting bull-bear conversions.
2019 was also known to many as the Year of DeFi, with various DeFi products and business models emerging rapidly, including MakerDAO, Compound, dYdX, and more.
Additionally, some significant events took place that year, such as:
In January 2019, Binance initiated a new round of fundraising frenzy, a model also known as 1EO (Initial Exchange Offerings), marking the beginning of a new fundraising model in the crypto space. As shown in the chart below.
In June 2019, following the exposure of the Plus Token wallet (a Chinese project) exit scam, the first Ponzi scheme in the crypto world collapsed. You can Google the story of the Plus Token Ponzi scheme for more information.
In November 2019, Canaan Inc. from Hangzhou (founded in 2013 and then the world's second-largest Bitcoin mining machine manufacturer) went public on Nasdaq, finally taking the first step for cryptocurrency to enter the traditional capital market, also known as the first blockchain stock.
In January 2019, Bitcoin opened at a price of $3,746.71, closed in December 2019 at $7,193.60, with the highest price of the year being $13,796.49.
（12）In 2020, Bitcoin reached a peak value of $29,244.88
Entering 2020, amidst the uncertainty brought to the global economy by the COVID-19 pandemic, the crypto market began to witness another crucial moment. Bitcoin started to shine like digital gold, increasingly being seen as "digital gold." As the Federal Reserve printed trillions of dollars to combat the pandemic, some investors turned to Bitcoin as a new financial force capable of hedging against inflation.
It was also in this year that MicroStrategy started buying Bitcoin, triggering a wave of global corporate adoption of Bitcoin. This year also became the long-awaited year for institutional funds to flow into Bitcoin.
Moreover, the DeFi craze (DeFi Summer) also began in this year, initially led by Maker. Later, with Compound launching its governance token COMP in June, the DeFi landscape changed, triggering a frenzy of "yield farming." In September of the same year, Uniswap also conducted a large-scale airdrop.
Additionally, an event worth mentioning is the OKEx (now OKX) incident in October 2020. It was revealed that OKEx's founder, Star Xu, had been taken away by the domestic police for investigation, leading the OKEx platform to halt user withdrawals. In response to this news, the mainstream cryptocurrencies plummeted, with BTC briefly dropping below $11,200. (I actually used OK quite frequently before. However, after this incident, I stopped using this exchange for a long time. But with Xu Mingxing's subsequent internationalization, the rebranding of OKX, and OK seizing the wallet layout opportunity for 2023, the user base of OK has been growing steadily.)
In January 2020, the opening price of Bitcoin was $7,194.89, the closing price in December 2020 was $29,001.72, and the highest price of the year was $29,244.88.
（13）In 2021, Bitcoin reached its peak value at $68,789.63
2021 was also the third major bull market for Bitcoin. Bitcoin hit (approached) $69,000 in this year, setting a new all-time high.
At the same time, many significant events occurred during this year, such as:
Elon Musk was very active during this bull run. On January 29, 2021, Musk changed his Twitter bio to "#bitcoin," causing the price of Bitcoin to surge by 18% to $38,000 on that day. Under Musk's influence, DOGE also skyrocketed by over 16,000.00% and successfully gained popularity. I remember that even those who had not previously paid attention to the crypto market began discussing DOGE.
On February 8, 2021, Tesla announced that it had purchased $1.5 billion worth of Bitcoin and stated that it would consider accepting Bitcoin as payment for its products (cars). On the day this news broke, the price of Bitcoin reached a high of $56,563.72.
On April 13, 2021, Coinbase went public on the Nasdaq stock exchange, becoming the first publicly traded cryptocurrency company in the United States.
Starting in May 2021, China launched a series of strong regulatory measures against cryptocurrency, including:
On May 18, three industry associations issued a notice on preventing speculation in virtual currency trading, leading to the infamous "5/19" crash, where the price of Bitcoin plummeted by 40% in a single day, reaching a low of $30,000.
On May 21, the Financial Stability and Development Committee of the State Council held its 51st meeting and emphasized the crackdown on Bitcoin mining and trading activities to prevent individual risks from spreading to the broader society.
On May 26, the Development and Reform Commission of Inner Mongolia Autonomous Region published the "Eight Measures to Resolutely Crack Down on and Punish Illegal Virtual Currency Mining Activities" on its official website.
On June 9, the Development and Reform Commission of Changji Hui Autonomous Prefecture in Xinjiang issued a notice to immediately stop production and rectify enterprises engaged in virtual currency mining.
On June 9, the Qinghai Province Department of Industry and Information Technology issued a "Notice on Cleaning up and Rectifying Virtual Currency 'Mining' Projects" and carried out clean-up and rectification of relevant virtual currency mining activities.
On June 18, the Sichuan Provincial Development and Reform Commission and the Sichuan Provincial Energy Bureau issued a "Notice on Cleaning up and Shutting down Virtual Currency 'Mining' Projects."
On June 21, the People's Bank of China issued an announcement, interviewing Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Postal Savings Bank of China, Industrial Bank, Alipay, and other banks and payment institutions. Subsequently, major banks and Alipay responded one after another, stating "they will resolutely not engage in or participate in any business activities related to virtual currency."
On June 9, 2021, the South American country of El Salvador passed a law to make Bitcoin legal tender in the country. El Salvador is also the world's first country to grant Bitcoin legal tender status.
On November 10, 2021, the price of Bitcoin reached a historic high of $68,790.
In January 2021, the opening price of Bitcoin was $28,994.01, and in December 2021, the closing price of Bitcoin was $46,306.45, with the highest price of the year reaching $68,789.63.
（14）The highest value of Bitcoin in 2022 was $48,086.84
During this year, the price of Bitcoin continued to decline, and the cryptocurrency market once again entered a bear market. Due to the collapse of Luna/UST and FTX, people's confidence was greatly shaken, creating a sense of a prolonged bear market. However, it was also during this year that I decided to do something publicly, eventually choosing the path of self-media and founding the self-media IP, "Talk Outside of the Box."
A few things that left a deep impression on me this year:
Many people around me left this circle, and various communities began to feel lifeless. During this year, I chose to exit and block all circle and group messages, spending most of my time quietly writing and publishing articles.
On February 24, 2022, the Russia-Ukraine war broke out.
From May 7 to May 13, 2022, the algorithmic stablecoin leader UST experienced two separate uncouplings, ultimately entering a death spiral, leading to the collapse of LUNA and UST.
On July 14, 2022, the well-known crypto lending platform Celsius fell into a vicious cycle of insolvency and ultimately filed for bankruptcy protection.
On July 2, 2022, Three Arrows Capital filed for bankruptcy protection.
On November 9, 2022, FTX Exchange experienced a complete collapse and filed for bankruptcy on November 11. At that time, I was also using this exchange, but had already withdrawn most of my assets prior to this event, so I did not incur significant losses.
In a comprehensive review, 2022 can be considered one of the most turbulent years in the history of the crypto market. However, opportunities often arise from despair. It was from May 2022 that we started a new round of Bitcoin's "20th Month" dollar-cost averaging plan, which we had a specific review and recap of in our previous article on January 1.
Bitcoin opened the year 2022 at a price of $46,311.74, closed the year at $16,547.50, and reached its highest price of $48,086.84 during the year.
（15）Bitcoin's highest value in 2023 is $44,705.52
For the crypto market, this year can be considered quite challenging, but for external observers, 2023 is also a year of rapid growth. Our articles, starting from obscurity with no readers, gradually turned into a circle where many like-minded partners gathered to pay attention together. In this year, we also launched the first e-book "Advanced Blockchain Thinking."
Although the market continued to experience a bear market this year, Bitcoin's fundamentals remained solid. Many people (including myself) are looking forward to the great bull market opportunities in 2024–2025, and many are also eagerly anticipating the possible approval of ETFs at that time.
In 2023, many significant events also took place, such as:
In January, the Bitcoin Ordinals protocol emerged, shortly followed by the BRC-20 concept becoming one of the year's most important new narratives.
In February, with the launch of the Blur token, the NFT market saw a small resurgence, allowing many to earn significant returns through Blur airdrops.
In March, many people received an airdrop from ARB, and Glyph gained some traction. However, most people seemed to be focused on the banking situation in the US, as the US banking industry was facing a severe run on the banks, causing bank stocks to plummet, and even leading to individual bank failures (such as the collapse of Silvergate Bank, Silicon Valley Bank, and Signature Bank).
In April, it seemed to be Hong Kong's month, as the global blockchain conference was held in Hong Kong, and Hong Kong took the opportunity to announce several favorable cryptocurrency policies. Other significant events included Ethereum's upgrades (Shanghai Upgrade and Capella Upgrade).
In May, there was a MemeCoin craze, led by Pepe the Frog (PEPE token launched on April 14, 2023), with various MemeCoins featuring different images almost dominating the attention of the entire crypto community. With PEPE successfully listing on Binance on May 6, the coin's market cap also reached an all-time high at that time.
In June, the SEC stirred things up again, but everyone seemed more concerned about whether CZ would go to jail, and some were following BlackRock's application for a spot Bitcoin ETF.
In July, Ripple won a milestone victory in its lawsuit with the SEC, and XRP's price surged from $0.47 to $0.82, hitting a new high since January 2018. As a result of this event, several tokens (such as SOL, MATIC, ADA, XLM) previously deemed securities by the SEC in the Coinbase lawsuit also saw significant gains.
In August, Grayscale also won a lawsuit against the SEC, which seemed to pave the way for BlackRock's Bitcoin spot ETF application approval, as Grayscale's victory was seen as accelerating the SEC approval trend.
In November, CZ decided to have boxed lunch again, signing a plea agreement and Binance paying a hefty $4.3 billion fine to the US Treasury Department.
December was a highlight for Glyph, as due to a large number of Ordinals trades, the Bitcoin network's daily transaction fees even exceeded Ethereum's at one point. Then, the Solana ecosystem's Meme craze began, and the MemeCoin hype triggered another get-rich-quick movement.
In January 2023, Bitcoin opened at a price of $16,547.91, closed at $42,265.19 in December 2023, and reached a high of $44,705.52 in the same year.
（16）In 2024, Bitcoin's highest value reached $108,268.45
This year, we finally welcomed the long-awaited bull market once again. The BTC ETF was officially approved in January, and Bitcoin's price also successfully surpassed $100,000 in December, marking new milestones for Bitcoin.
In the future, Bitcoin will be unstoppable. As mentioned in our previous article (January 1), the crypto field may usher in or begin to enter a new era, and each of us will be participants and witnesses.
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$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.
Arthur Hayes: Why I'm Betting on ETH While the Market Is Obsessed with SOL
May 16 Key Market Information Gap, A Must-Read! | Alpha Morning Report
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
Deconstructing Binance Alpha2.0's New "Asia-Led Liquidity Mining" Model
After Surging 40%, Has Ethereum Price Peaked Upon Exiting the Craze?
Whether you are an insider or an outsider, these days you must be familiar with the news about Ethereum. The reason is simple, causing Ethereum enthusiasts to sigh with emotion and almost throwing off-guard those who defend Ethereum, Ethereum, with a "3-day surge of 40%," climbed to the top of the Douyin Hot List.
As we all know, Ethereum launched the Pectra upgrade on May 7th. This most significant network upgrade since early 2024 integrates the Prague execution layer hard fork and the Electra consensus layer upgrade, significantly improving Ethereum's performance through 11 improvement proposals. The account abstraction feature (EIP-7702) allows users to flexibly manage wallets through social media accounts or multi-signature schemes, reducing the user threshold, attracting more users and developers. The staking mechanism optimization increases the validator ETH cap from 32ETH to 2048ETH and introduces a flexible withdrawal method, making it easier for institutions and individuals to participate in network security, enhancing the market's confidence in Ethereum's long-term value.
At the same time, Pectra optimized the interaction efficiency of Layer 2 networks such as Arbitrum and Optimism, making transactions faster and cheaper, leading to a surge in on-chain activity. As a crucial step for Ethereum's transition from "2G" to "5G," the Pectra upgrade not only enhances network vitality but also "recharges confidence" in the market, directly driving the price increase.
Related Reading: "Ethereum Skyrockets 22% in One Day, E Enthusiasts Rejoice"
It's not just Ethereum itself, as Wall Street also brought important bullish news.
The world's largest asset management company, BlackRock, proposed to the SEC allowing Ethereum ETFs for staking. This proposal is expected to elevate Ethereum ETFs from a mere investment tool to a bond-like "interest-bearing asset," bringing investors both capital appreciation and passive income, igniting market optimism about Ethereum's future potential.
Specifically, BlackRock has proposed to amend its S-1 filing to allow investors to create and redeem ETF shares directly with Ethereum instead of the U.S. dollar (i.e., in-kind redemption). This move, combined with its $2.9 billion BUIDL Fund launched in March 2024, aims to deepen the integration of traditional finance with blockchain. The BUIDL Fund is a tokenized fund operating on the Ethereum network, investing in traditional assets such as U.S. Treasury bonds. This setup is highly attractive to institutional investors, as they can not only benefit from Ethereum's price appreciation but also earn stable cash flow through staking.
Robert Mitchnick, BlackRock's Head of Digital Assets, stated in a CNBC interview in March 2025 that the addition of staking functionality will significantly enhance the appeal of the Ethereum ETF. He admitted that when the Ethereum spot ETF was launched in July 2024 without staking functionality, the market demand was lackluster, and staking could be the key to reversing this trend.
Meanwhile, the SEC's shifting stance on cryptocurrency regulation has also fueled this upward trend. During the tenure of the previous SEC chairman, the regulatory approach was tough, and staking was strictly viewed through the Howey test as a potential unregistered security. Therefore, when approving the Ethereum spot ETF in May 2024, staking functionality was explicitly prohibited.
However, with Trump back in the White House and Paul Atkins taking over the SEC, there has been a noticeable relaxation in crypto regulation. Apart from BlackRock, ETF issuers such as Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted applications for similar staking and in-kind redemption.
Related reading: "New Chairman Takes Office, SEC Transforms into 'Crypto Daddy' Within 48 Hours"
If staking ETFs are approved, the benefits are likely to go beyond price appreciation. The introduction of staking functionality could redefine the role of crypto assets, making them more similar to traditional financial products that provide returns and value appreciation, thereby driving Ethereum closer to mainstream finance.
Currently, the SEC still needs to address several decisions related to crypto ETFs, including whether to approve ETFs for Solana, XRP, Litecoin, and even Dogecoin. With the calls for an "altcoin season" growing louder, Ethereum's strong performance may just be the beginning of a larger crypto market frenzy.
In addition, the Trump family-related DeFi project WLFI is also bullish on this wave of rise, with frequent on-chain activities. According to on-chain data analyst @ai_9684xtpa's monitoring, a WLFI-related address is currently borrowing coins to go long on ETH, borrowing 4 million U from Aave to buy 1590 ETH at an average price of $2515 per ETH.
For this epic surge of Ethereum after half a year of silence, the community has indeed gained more confidence and hope, which has also led to a revival of the entire altcoin market. However, amidst the joy, there are also voices of pessimism. Below is a summary conducted by BlockBeats based on community discussions.
The optimists point out that the current market structure is similar to the eve of the bull markets in 2016 and 2020, predicting a life-changing surge in the next 3-6 months, where some altcoins may even achieve astonishing single-day gains of up to 40%.
@liuwei16602825 stated that this surge signifies the return of the bull market as a sure thing. There is no need to worry about a pullback. The driving force behind the surge uses a high-cost isolated operation, fearing a drop more than any retail investor and will definitely do everything to support the price.
Related Reading: "Ethereum Leads the Surge Triggering the 'Altcoin Season' Speculation, How Do Traders View the Future Market?"
The bears mainly believe that this surge is different from the bull market of 2021, as the current market lacks the confidence of large-scale retail investors entering and holding positions for the long term, with funds rotating too quickly.
@market_beggar observed that a Bitfinex E/B whale has started to close positions and believes that if this whale maintains its high-speed position-closing operation for the next few days, it can be inferred that the whale no longer sees the upside potential of ETH, preparing to take profits and exit. The closing time will be a key focus going forward.
@FLS_OTC stated that there are still many uncertainties at the macro level, and the liquidity cannot support a major bull market. At this stage, it is a "last hurrah," not a complete reversal, and will continue to remain in a short position.
@off_thetarget believes that after ETH transitioned from POW to POS, it lost the "gold standard" of mining machine power cost support. The staking economic model led to a breakdown in value anchoring. Additionally, the L2 ecosystem (such as Starknet, zkSync, etc.) suffered from liquidity fragmentation, failing to establish an effective capital inflow mechanism, causing the collapse of the split disc pattern. Furthermore, the ETH community's excessive pursuit of technical narratives divorced from real-world needs resulted in a weak ecosystem growth. Therefore, he believes that ETH's intrinsic value system has crumbled, and the price is bound to plummet to the 800-1200 range, with a decisive short position at 1800.
@Airdrop_Guard, based on the core logic of the "High Probability Trading Strategy," where three sets of underlying logic different trading systems (such as volume depletion, price supply-demand, long/short position funding rate, etc.) simultaneously issue a short signal at the same point (2580), creating a high-probability trading opportunity. He emphasizes that these systems must be based on different algorithms and logics (rather than mere technical indicator overlays). The current ETH trend aligns with the short conditions in multiple independent dimensions of his trading system, hence the decision to short.
Overall, Bitcoin still maintains over 54% market dominance, and institutional funds' continued preference for it may limit the altcoin's upward potential. The market's future direction will depend on multiple factors, such as Bitcoin's price trend, global macroeconomic conditions, and whether funds can effectively rotate from Bitcoin to the altcoin sector.
Although Ethereum's recent leadership in the market has brought about optimistic sentiment, investors still need to remain rational as different sectors of altcoins are likely to show divergence in trends. Whether this round of Ethereum's rise will usher in a true altcoin frenzy may require more time and conducive conditions.
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$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.
Arthur Hayes: Why I'm Betting on ETH While the Market Is Obsessed with SOL
May 16 Key Market Information Gap, A Must-Read! | Alpha Morning Report
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
Deconstructing Binance Alpha2.0's New "Asia-Led Liquidity Mining" Model
After Surging 40%, Has Ethereum Price Peaked Upon Exiting the Craze?
Whether you are an insider or an outsider, these days you must be familiar with the news about Ethereum. The reason is simple, causing Ethereum enthusiasts to sigh with emotion and almost throwing off-guard those who defend Ethereum, Ethereum, with a "3-day surge of 40%," climbed to the top of the Douyin Hot List.
As we all know, Ethereum launched the Pectra upgrade on May 7th. This most significant network upgrade since early 2024 integrates the Prague execution layer hard fork and the Electra consensus layer upgrade, significantly improving Ethereum's performance through 11 improvement proposals. The account abstraction feature (EIP-7702) allows users to flexibly manage wallets through social media accounts or multi-signature schemes, reducing the user threshold, attracting more users and developers. The staking mechanism optimization increases the validator ETH cap from 32ETH to 2048ETH and introduces a flexible withdrawal method, making it easier for institutions and individuals to participate in network security, enhancing the market's confidence in Ethereum's long-term value.
At the same time, Pectra optimized the interaction efficiency of Layer 2 networks such as Arbitrum and Optimism, making transactions faster and cheaper, leading to a surge in on-chain activity. As a crucial step for Ethereum's transition from "2G" to "5G," the Pectra upgrade not only enhances network vitality but also "recharges confidence" in the market, directly driving the price increase.
Related Reading: "Ethereum Skyrockets 22% in One Day, E Enthusiasts Rejoice"
It's not just Ethereum itself, as Wall Street also brought important bullish news.
The world's largest asset management company, BlackRock, proposed to the SEC allowing Ethereum ETFs for staking. This proposal is expected to elevate Ethereum ETFs from a mere investment tool to a bond-like "interest-bearing asset," bringing investors both capital appreciation and passive income, igniting market optimism about Ethereum's future potential.
Specifically, BlackRock has proposed to amend its S-1 filing to allow investors to create and redeem ETF shares directly with Ethereum instead of the U.S. dollar (i.e., in-kind redemption). This move, combined with its $2.9 billion BUIDL Fund launched in March 2024, aims to deepen the integration of traditional finance with blockchain. The BUIDL Fund is a tokenized fund operating on the Ethereum network, investing in traditional assets such as U.S. Treasury bonds. This setup is highly attractive to institutional investors, as they can not only benefit from Ethereum's price appreciation but also earn stable cash flow through staking.
Robert Mitchnick, BlackRock's Head of Digital Assets, stated in a CNBC interview in March 2025 that the addition of staking functionality will significantly enhance the appeal of the Ethereum ETF. He admitted that when the Ethereum spot ETF was launched in July 2024 without staking functionality, the market demand was lackluster, and staking could be the key to reversing this trend.
Meanwhile, the SEC's shifting stance on cryptocurrency regulation has also fueled this upward trend. During the tenure of the previous SEC chairman, the regulatory approach was tough, and staking was strictly viewed through the Howey test as a potential unregistered security. Therefore, when approving the Ethereum spot ETF in May 2024, staking functionality was explicitly prohibited.
However, with Trump back in the White House and Paul Atkins taking over the SEC, there has been a noticeable relaxation in crypto regulation. Apart from BlackRock, ETF issuers such as Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted applications for similar staking and in-kind redemption.
Related reading: "New Chairman Takes Office, SEC Transforms into 'Crypto Daddy' Within 48 Hours"
If staking ETFs are approved, the benefits are likely to go beyond price appreciation. The introduction of staking functionality could redefine the role of crypto assets, making them more similar to traditional financial products that provide returns and value appreciation, thereby driving Ethereum closer to mainstream finance.
Currently, the SEC still needs to address several decisions related to crypto ETFs, including whether to approve ETFs for Solana, XRP, Litecoin, and even Dogecoin. With the calls for an "altcoin season" growing louder, Ethereum's strong performance may just be the beginning of a larger crypto market frenzy.
In addition, the Trump family-related DeFi project WLFI is also bullish on this wave of rise, with frequent on-chain activities. According to on-chain data analyst @ai_9684xtpa's monitoring, a WLFI-related address is currently borrowing coins to go long on ETH, borrowing 4 million U from Aave to buy 1590 ETH at an average price of $2515 per ETH.
For this epic surge of Ethereum after half a year of silence, the community has indeed gained more confidence and hope, which has also led to a revival of the entire altcoin market. However, amidst the joy, there are also voices of pessimism. Below is a summary conducted by BlockBeats based on community discussions.
The optimists point out that the current market structure is similar to the eve of the bull markets in 2016 and 2020, predicting a life-changing surge in the next 3-6 months, where some altcoins may even achieve astonishing single-day gains of up to 40%.
@liuwei16602825 stated that this surge signifies the return of the bull market as a sure thing. There is no need to worry about a pullback. The driving force behind the surge uses a high-cost isolated operation, fearing a drop more than any retail investor and will definitely do everything to support the price.
Related Reading: "Ethereum Leads the Surge Triggering the 'Altcoin Season' Speculation, How Do Traders View the Future Market?"
The bears mainly believe that this surge is different from the bull market of 2021, as the current market lacks the confidence of large-scale retail investors entering and holding positions for the long term, with funds rotating too quickly.
@market_beggar observed that a Bitfinex E/B whale has started to close positions and believes that if this whale maintains its high-speed position-closing operation for the next few days, it can be inferred that the whale no longer sees the upside potential of ETH, preparing to take profits and exit. The closing time will be a key focus going forward.
@FLS_OTC stated that there are still many uncertainties at the macro level, and the liquidity cannot support a major bull market. At this stage, it is a "last hurrah," not a complete reversal, and will continue to remain in a short position.
@off_thetarget believes that after ETH transitioned from POW to POS, it lost the "gold standard" of mining machine power cost support. The staking economic model led to a breakdown in value anchoring. Additionally, the L2 ecosystem (such as Starknet, zkSync, etc.) suffered from liquidity fragmentation, failing to establish an effective capital inflow mechanism, causing the collapse of the split disc pattern. Furthermore, the ETH community's excessive pursuit of technical narratives divorced from real-world needs resulted in a weak ecosystem growth. Therefore, he believes that ETH's intrinsic value system has crumbled, and the price is bound to plummet to the 800-1200 range, with a decisive short position at 1800.
@Airdrop_Guard, based on the core logic of the "High Probability Trading Strategy," where three sets of underlying logic different trading systems (such as volume depletion, price supply-demand, long/short position funding rate, etc.) simultaneously issue a short signal at the same point (2580), creating a high-probability trading opportunity. He emphasizes that these systems must be based on different algorithms and logics (rather than mere technical indicator overlays). The current ETH trend aligns with the short conditions in multiple independent dimensions of his trading system, hence the decision to short.
Overall, Bitcoin still maintains over 54% market dominance, and institutional funds' continued preference for it may limit the altcoin's upward potential. The market's future direction will depend on multiple factors, such as Bitcoin's price trend, global macroeconomic conditions, and whether funds can effectively rotate from Bitcoin to the altcoin sector.
Although Ethereum's recent leadership in the market has brought about optimistic sentiment, investors still need to remain rational as different sectors of altcoins are likely to show divergence in trends. Whether this round of Ethereum's rise will usher in a true altcoin frenzy may require more time and conducive conditions.
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