Vesper Finance

Jack Kubinec

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed">subscribe</a>.



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A long-awaited Solana update has gone live. All optional priority fees paid by users will be sent to the validators running the blockchain.



Solana’s median priority fee dropped 40% from the time period right before the new feature was activated, according to Solana Compass. However, it’s too early to tell whether that trend will hold. A more immediate consequence is that liquid staking tokens — which allow validators to pass along priority fee rewards, whereas regular Solana staking does not — just became the highest-yield show in town.



Solana users can pay a priority fee on top of the network’s base fee to increase a transaction’s chances of making it to the blockchain. Under Solana’s initial architecture, half of these priority fees went to the validators who run Solana’s software, and half were burned, or effectively removed from circulation.&nbsp;



In May 2024, <a href="https://blockworks.co/news/solana-validators-tackle-side-deals">validators voted</a> to begin sending 100% of priority fees to validators. The justification was that the 50% burn was causing some validators to cut mutually beneficial side deals with traders. As SIMD-0096’s activation date approached, some developers <a href="https://blockworks.co/news/solana-validator-revenue-stakers">began pointing out</a> that Solana lacks an in-protocol way for validators to share priority fee rewards with stakers. This means that validators would get relatively richer at the expense of the stakers who delegate stake to them.



A future proposal, SIMD-0123, could allow in-protocol priority fee sharing, but it won’t be activated for some time. Until then, one of the most effective ways for validators to share the extra yield with stakers is via liquid staking tokens, which are tokenized claims on a share of the yield generated by a pool of staked SOL. If validators transfer the extra SOL that they’re earning into stake pools, then the LST holders receive more yield.



Solana LST provider Sanctum <a href="https://blog.sanctum.so/lst-for-all">announced</a> this morning it would be creating an LST for every validator on the network. That would bring Solana’s total number of LSTs to over 1,000 — a more than tenfold increase.&nbsp;



Solana LSTs mostly saw their yields go up across the board today. Jupiter’s is 11.96%, up from 10.69% in the period prior, and most LSTs followed suit.



LSTs may not be a perfect solution, though. For one, converting native stake into an LST could <a href="https://x.com/0xDigitalLaw/status/1889741314914128054">create</a> a taxable event for SOL holders. Another critique stems from the fact that LST holders must trust that validators are passing the full yield along.



“I absolutely hate ‘trust me bro’ situations,” Sol Strategies head of staking Max Kaplan wrote on X. “I believe the LST method is confusing, a bad UX, and opens the door for potential [rug pulls].”



Jito (which operates the largest Solana LST) recently debuted TipRouter, which automatically doles out priority fees and can be verified onchain.



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Solana yield is now flowing to liquid stakers

Casey Wagner

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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Jerome Powell was back on Capitol Hill for his second day of testimony today.&nbsp;



We do not envy him. Senators yesterday grilled Powell on everything from the dismantling of the CFPB to Trump’s tariff policies, and today was more of the same.&nbsp;



Since Powell is Powell, he generally kept his answers short and diplomatic, making it particularly exasperating to watch.&nbsp;



“I think the standard case for free trade and all that logically still makes sense. It didn’t work that well when we have one very large country that doesn’t really play by the rules,” Powell said. We’re thinking he’s talking about China here.&nbsp;



“And in any case, it’s not the Fed’s job to make or comment on tariff policy.”



Sen. Elizabeth Warren, a key architect of the CFPB’s creation in the aftermath of the 2008 financial crisis, said not having the agency is akin to having “no cop on the beat.”&nbsp;



Powell agreed that there is no other regulator currently tasked with monitoring banks and ensuring consumer protections. He added, though, that bank accounts are “safe.”&nbsp;



Over in the House, crypto banking did get a little shoutout in the midst of the <a href="https://blockworks.co/news/bessent-locks-down-on-cfpb">CFPB-talk</a>.&nbsp;



“Are there any backstops that we can use, any firewalls that we can put in place that might insulate the traditional banking system… if we have a collapse of a major crypto issuer?” Rep. Stephen Lynch asked on Tuesday.&nbsp;



Powell conceded that it’s “appropriate” to make sure banks understand the risks that are involved in crypto activity if they’re taking on these clients, but at the same time “you don’t want to go too far.”&nbsp;



“In Fed regulated banks, there are lots of crypto activities happening now,” Powell added. “They&#8217;ve just happened under a framework where we made sure that the bank understood, and we understood, exactly what they&#8217;re doing.”&nbsp;



In terms of specifics on monetary policy, which was somewhat ironically the least-discussed topic on Tuesday and Wednesday, Powell simply reiterated that the committee will take its time lowering interest rates.&nbsp;



“We’re in a pretty good place with this economy,” Powell said Tuesday. “We want to make more progress on inflation.”&nbsp;



Wednesday’s testimony of course came after the latest CPI report showed inflation hit 3%.



Powell told reps that today’s CPI proves that “we are close but not there on inflation.”&nbsp;



“So we want to keep policy restrictive for now,” he added.&nbsp;



For those riding the quantitative easing train, it was easy to miss Powell’s quick comment about the practice, but he did make one:



“Quantitative easing is a tool we only use when rates are already at zero,” he said.&nbsp;



Remember, QE + near zero rates almost always equals pain. Weaker currency, long-term inflation risks, the list goes on. Here’s to hoping we don’t get there.



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Jerome Powell gets grilled on the Hill

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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The first CPI reading of the year came out this morning, showing that inflation picked up for the fourth-straight month in January. The headline figure is up 3% over the year, slightly above what analysts had predicted.&nbsp;



Month over month, prices across the board are up 0.5%, the biggest month increase since August 2023. The core index, which excludes food and energy prices, is up 0.4% from December.&nbsp;



The January CPI report is always especially important as it reflects turn-of-the-year price changes. The first month of the year historically brings bigger price increases.&nbsp;



Shelter costs accounted for almost 30% of the total CPI increase, although some of this increase can be attributed to wildfires in California. Food prices also brought up the headline figure.



The index for food was up 0.4% in January, with meats, poultry, fish and eggs alone gaining 1.9% from December.&nbsp;



Stocks initially fell on the news but pared losses later in the session. 10-year Treasury yields — a proxy for loans and mortgages — jumped above 4.65%. Odds of a March rate cut went from 5% to 2.5% following the report’s release, according to <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">data</a> from CME Group.&nbsp;



These inflation figures, while perhaps initially alarming, are not too far off from expectations. Plus, first quarter inflation almost always shows a new year’s bump. Add in the devastating fires in the Los Angeles area and it’s a bit of a perfect storm. We’ll see if the market agrees tomorrow.



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2025’s first inflation print shows New Year’s bump 

Donovan Choy

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/research">subscribe</a>.



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Four months after its <a href="https://blockworks.co/news/0xresearch-newsletter-uniswap-layer-2">initial announcement</a>, Uniswap’s L2 rollup mainnet went live yesterday.



Despite its name, Unichain is a general purpose L2 rollup. At least a <a href="https://www.unichain.org/explore">dozen</a> applications have already been deployed on the chain, including Euler, Renzo, Morpho, Lido and more.



So it’s another L2. What makes Unichain different?



For one, Unichain has quicker finality at <a href="https://docs.unichain.org/whitepaper.pdf">200-250 milliseconds</a>, a significant upgrade over Ethereum’s 12-second block time or most OP stack chains’ block time of two seconds.



Second, Unichain is a Stage 1 rollup <a href="https://l2beat.com/scaling/projects/unichain">right out the gate</a>. This means a permissionless fault proof system has been deployed that allows anyone to verify or challenge transactions independently, unlike Stage 0 rollups such as Base.



When Unichain was first announced late last year, it threatened to exacerbate ETH’s <a href="https://blockworks.co/news/value-accrual-matters-for-tokens">value accrual problem</a>. Why? Uniswap is still one of the largest gas <a href="https://etherscan.io/gastracker#gasguzzler">guzzlers</a> on Ethereum L1, which contributes to a higher burn rate of ETH i.e., value accrual.



The silver lining is that a significant number of v2 and v3 users will probably not migrate to Unichain immediately. Users are sticky. Uniswap v3 will have been live for four years in May and yet its v2 deployment still enjoys a deep moat of liquidity (~$1.5 billion in TVL).



Expecting Uniswap LPs and users to bridge to a rollup chain looks to be fraught with even more friction, let switching between frontends.



Peter Thiel famously said that customers accept switching costs when product innovation is at least a 10x upgrade from existing options, not mere incremental improvements.



Does Unichain, <a href="https://blockworks.co/news/0xresearch-newsletter-uniswap-layer-2">the L2 rollup</a>, offer that tenfold improvement? I don’t think so. Perhaps <a href="https://blockworks.co/news/uniswap-v4-goes-live">Uniswap v4 and hooks</a> do, but v4 is also already live on eight other chains.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">After UniswapV4 launched, <a href="https://twitter.com/base?ref_src=twsrc%5Etfw">@base</a> was the biggest adopter but now it appears most of the volume lies on Ethereum and <a href="https://twitter.com/arbitrum?ref_src=twsrc%5Etfw">@arbitrum</a>. We probably cross over $1B in (v4) volume traded in the next couple of weeks. <a href="https://t.co/mnObHtyIn8">pic.twitter.com/mnObHtyIn8</a>&mdash; Marc Arjoon 🟪 (@marcarjoon) <a href="https://twitter.com/marcarjoon/status/1889671074222084604?ref_src=twsrc%5Etfw">February 12, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Should the bulk of liquidity and users migrate to Unichain, however, it would at least appease one group of stakeholders: UNI token holders.



Last week, Uniswap Foundation announced a revenue-sharing structure that would allocate 65% of net chain revenue to validators and stakers on the Unichain Validation Network (UVN).



It’s hard to overstate the importance of this development.&nbsp;



For years, UNI token holders have lamented the lack of value accrual. The UNI airdrop was a “last resort” move that served to stave off the infamous SushiSwap <a href="https://blockworks.co/news/sushiswap-swaps-out-co-founder-0xmaki">vampire attack</a> in 2020.&nbsp;



And it worked. Uniswap re-established itself as the top DEX. But then UNI existed as a meme token with no productive cash flows.



On a recent <a href="https://youtu.be/XsxxdX3OzG4">Bell Curve podcast</a>, Felipe Montealegre of Theia Research likened UNI’s treatment as a “second class citizen” compared to Uniswap Labs equity.



So the UNI fee switch is finally here. How much cash flows should UNI stakers expect?



About $16 million to $33 million in annualized net revenue, Blockworks Research analysts Luke Leasure and Daniel Shapiro told me.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcM2TE67dUTd190p2y0946KKYwIU0wVWOGuN7ufpPfaKZTOLxDDFAxfwqDdqWsRdUzJTr_rtfuA3vYzSX8BzROBpl3LWCFXSdYKw732dFfeGAqihx5Bf7cSvZ3QIz_60ZosCHpK?key=6zedTXbiTkVFK-yEhvNHMiI9" alt=""/></figure>



“Estimating the fees and APY that will accrue to UNI stakers on Unichain’s UVN requires a few assumptions. Firstly, the 65% of net earnings that accrues to the UVN are a function of base fees, priority fees and MEV paid to transact on the L2, less the expenses of posting data to the L1 and the Optimism Collective’s take rate on gross and net chain revenue. With this, the Base L2 may be the most appropriate comparison to estimate Unichain’s financials,” Leasure and Shapiro said.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfc_jEpVn2DyPWS__FlXii5B4ER8zkIKlIrOpyPaPPPj3Dg5VFXKQGKkxdsS6lg-nbQasSH7BN3rSzUVZ3SDNV8hwV3-8UWSDXotKEj9HhCtR-7pgjeMAf4OrJr5bD2FN-xaFQ8?key=6zedTXbiTkVFK-yEhvNHMiI9" alt=""/></figure>



“DEX activity is the largest driver of fees by a significant margin. Over the trailing 30 days, Uniswap did ~$100b in trading volumes, whereas Base is around $50b with around $100m in annualized net revenue. Assuming Unchain captures 9-25% of Uniswap’s volume, this would put Unchain L2 activity at 25% to 50% the activity of Base.”



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Unichain mainnet is live with value accrual for UNI

Katherine Ross

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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The vibes may not be great, but it’s hard not to be hyped about HYPE.&nbsp;



The token’s seen a bit of sell pressure since the beginning of this month, falling to around $23. Yet it’s certainly having a better month than others.&nbsp;



K33’s David Zimmerman found that HYPE makes up 55% of 7-day DEX volumes, and there’s so much open interest that it could be compared to some of the biggest CEXs. It’s around 47% of OKX’s levels or 13% of Binance’s.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXckTKMGGKPbZIzeHFslcxiMseTJaSCK5dgvS_f3Oqdgfzivc1zBdri4XHRxJzLMZ7D6sNbuc9gKaAb4XfRsYnTs2HEEznloLOpVMWgs22XatHzDIZLM0uGQoxd8eeFZw8PoR3bskw?key=JOAUs5lZRL4PgoRC0B8h7JAu" alt=""/></figure>



Let me back up for a second: Hyperliquid, ICYMI, is a layer-1 and a DEX.&nbsp;



“Unlike many projects in the crypto space that launch tokens before delivering a fleshed-out working product, Hyperliquid took a different approach — it focused on building and launching a successful trading platform before introducing its native token, HYPE,” K33 wrote.



And that helped HYPE stand out amongst a sea of token launches.



“31% of HYPE tokens were distributed to users at TGE, while 38.88% was earmarked for future emissions and community rewards. The only other sizeable allocation is for current and core contributors at 23.8%. Notably, especially in a year of major unlocks, core contributor tokens are locked until November 2025 with most vesting schedules complete by 2027-2028,” Zimmerman noted.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfOglam5Q2YT_uxA68ZUeTK-l0Tv-PxDRiW6jwoTmhp_t3ndjolm9nagxKR65t8CDm88QAe8Sf5gleiL_l7flVb5k3HI_W3ITbX7E68ho_zBJTtrVIE89DkLD15LF-FxR2Ql2pQbg?key=JOAUs5lZRL4PgoRC0B8h7JAu" alt=""/></figure>



Here’s the catch: Things look great right now when you’re looking at the data. If we’re realistically looking at the market then we have to note the weakness in altcoins at this point.&nbsp;



Is it impossible for HYPE to keep bucking the overall negativity? No. But it’s tricky.&nbsp;



On the other hand, perhaps there’s a reason folks are, well, HYPEd. If Hyperliquid can set the gold standard for token launches, then perhaps that’s a more sustainable way to improve morale.



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Why there’s hype around Hyperliquid

David Canellis

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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If you’re not ready to give up on a monster altcoin season — one on which to stake the future of your entire family bloodline — I totally get it.



Luckily, I’m here to make the case that we really are in the middle of one. It’s just hard to tell, because it’s happening to much smaller coins.



I spent the morning mapping the most recent all-time highs for the current top 1,000 coins by market cap.&nbsp;



The goal: Find how many coins have set new price records in the past few months, as well as the number of coins that have not yet returned to their all-time highs set during 2021’s altcoin season.



Because the sample size was very broad — including coins valued at under $30 million — coins that did not have at least $1 million in trading volume in the past day were filtered out.&nbsp;



Same with stablecoins, liquid staking tokens and other types of wrapped assets. I just wanted the coins that could moon on their own merit.



That left 361 different coins. And of those, 136 (~38%) had set their most recent all-time highs in 2024 or 2025.



Meanwhile, there were 124 coins that had established price records in 2021 — <a href="https://blockworks.co/news/crypto-crime-season">peak altcoin season</a> — that are still not broken today. That counts ETH, AVAX, DOT, SHIB, 1INCH and GNO.



Another 42 were set in 2022, mostly before Terra imploded in May of that year. Including TWT, SWEAT, COW and WAVES.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfp7ufZtOTxFZfcdiKYYq_XZg69yIvhlJPZqNdCWFB_2xzBihqU47IexIoGDNeCNQdX0m7O2QLE_IJntt2_is4UBL3apKIYjyIlV05NTkVC5uMHOGYWsR3d-XXTCpdPOZ-POH342Q?key=JOAUs5lZRL4PgoRC0B8h7JAu" alt=""/><figcaption class="wp-element-caption">This chart shows the most recent peaks for coins mapped against the total crypto market cap</figcaption></figure>



So, at the very surface level, the past two years have seen a comparable amount of coins reach all-time highs at least once to 2021. Which is impressive, all things considered.



Even better is that out of the 136 coins to break price records across this year and last, more than half have done so since December.&nbsp;



That’s 70 chances that traders have had to catch a coin on its way to all-time highs in the past nine weeks or so.



Does all this an altcoin season make? Maybe. It doesn’t fit the mold I’ve <a href="https://blockworks.co/news/waiting-for-altcoin-season">previously sketched out</a>, but it does say something about the state of the market.



And here it is: 50 of those 70 chances since December were memecoins or coins tied to AI agents. Which mostly first launched in that same period.



Perhaps, altcoin season is already here. It’s just really hard to capitalize on it.&nbsp;



I had initially figured that <a href="https://blockworks.co/news/small-cap-summer-bull-market-final-form">small-cap coins would be symbolic</a> of our bull market — market caps of between $250 million and $2 billion.



Except as it turns out, it may well have been localized on smaller coins, micro and nano-caps worth much less, which have demanded traders be so much quicker to enter and exit than in the past. Great.



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Altcoin season may already be here — it’s just very different

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed">subscribe</a>.



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The Solana X mob was awakened after Avara CEO Stani Kulechov accused the Solana DeFi project Kamino of copying Aave’s tech — on top of having a “half-baked” UI, among other things.&nbsp;



Kulechov’s remarks set off a round of snipes on Crypto Twitter, but while his Kamino criticism may have been overplayed, his sentiment did touch on a real trend outside of the borrow-lend world. As Solana’s tech matures, some founders are starting new businesses based on old ideas that weren’t formerly feasible.



The chain’s fundamentals — sub-cent transaction fees, thousands of transactions per second, and a year of uninterrupted uptime — have created an environment where concepts that once struggled on other blockchains might now thrive.



“Revisiting things that didn’t work a few years ago is sometimes more valuable than imagining new ones,” Inversion Capital founder Santiago Santos wrote on X this week.&nbsp;



On a forthcoming episode of the Lightspeed podcast, I asked Santos to name some ideas that deserve a second crack. His answer: crypto gaming and options protocols. Perpetual futures are obviously a successful business, he added, but onchain DeFi options less so.



Another old idea that may be breaking through is social trading, which has been a recurring theme in crypto for years — especially in the form of copy trading. Tensor’s social memecoin trading app Vector is already lapping the annualized revenue from its Solana NFT marketplace.



A couple weeks ago, Tensor’s co-founder <a href="https://blockworks.co/news/tensor-memecoin-app-revenue-distribution">told me</a> Vector would succeed where other apps haven’t because of its sleek Robinhood-esque packaging and the inherently social nature of memecoins — for which Solana seems to have an insatiable appetite.&nbsp;



On the institutional side of things, look at Sol Strategies: Tasked with turning around a flagging crypto holding company, new CEO Leah Wald took an <a href="https://blockworks.co/news/sol-strategies-is-solanas-microstrategy">eerily similar approach</a> to the one pioneered for bitcoin by <a href="https://blockworks.co/news/bitcoin-salesmen-michael-saylor-larry-fink">Michael Saylor</a> with Strategy (formerly MicroStrategy). I’ve already <a href="https://x.com/whosknave/status/1889333151605887480">predicted</a> a few other MicroStrategy for Solana equivalents will come to market this year.&nbsp;



Tech history shows that the winners aren’t necessarily the first movers but the best executors. Solana developers believe they’ve built the infrastructure for those second chances to succeed.



“The iPhone would be a perfect example as there were other attempts at smartphones before, but Apple came at the right time, right place,” Titan Exchange CEO Chris Chung said. “Hopefully Solana can provide the groundwork for some revolutionary ideas to take place as well.”



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Old ideas find new life on Solana

Ben Strack

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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After implementing 25% levies on steel and aluminum imports Monday, Donald Trump was expected to follow that up <a href="https://www.nbcnews.com/politics/politics-news/live-blog/trump-tariffs-musk-dei-gabbard-vote-live-updates-rcna191571">with reciprocal tariffs</a> on other trading partners.&nbsp;



Bitcoin dipped to around $95,000 around the steel/aluminum tariff news, before rebounding back above $98,000 early Tuesday.



“This rapid recovery underscores the growing maturity and stability of digital assets, even in the face of external economic shocks,” 21Shares crypto research strategist Matt Mena said in an email.



During the Canada-Mexico tariff announcement the weekend prior, he noted, crypto prices dropped about 5-10% further than yesterday’s levels — indicating “market confidence has strengthened.”



Indeed, Hargreaves Lansdown senior equity analyst Matt Britzman said in a Tuesday morning ET note how US markets “put on a strong show” late yesterday. Still, the tariffs had investors “bracing for impact, with futures slipping lower this morning,” he noted.



History suggests tariff threat-fueled <a href="https://blockworks.co/news/trump-tariffs-trade-war">trade war</a> fears often pass as quickly as they form, Britzman added.&nbsp;



“But this time, the smart money isn’t so sure; currency, bond and commodity traders are hedging their bets, sending the dollar, Treasury yields and gold climbing as tensions heat up,” he explained.



LMAX Group currency strategist Joel Kruger argued that the story is more about the market getting reacquainted with Trump’s tactics than any material risk associated with extreme tariff measures.&nbsp;



He told me: “While there could be short-term volatility on new announcements, we don’t see this risk causing any major shakeups from here on and expect crypto assets to continue to be well supported by medium and longer-term players looking to build exposure into dips.”



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How crypto markets are handling tariff updates

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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The apps you bet on the Super Bowl with don’t offer odds on which crypto ETFs will hit the market in 2025. For that, many look to Bloomberg Intelligence analysts James Seyffart and Eric Balchunas — a duo that offered a credible voice for X users in the lead-up to <a href="https://blockworks.co/news/sec-approves-bitcoin-etf">bitcoin</a> and <a href="https://blockworks.co/news/ether-etfs-approved-for-us-exchange-july-23">ether</a> ETF approvals last year.&nbsp;



A <a href="https://blockworks.co/news/canary-capital-litecoin-etf">litecoin ETF</a> is the frontrunner to launch this year, they say — at 90%.&nbsp;



Outside of LTC products, Seyffart and Balchunas are giving 75% odds for a <a href="https://blockworks.co/news/cme-group-considering-sol-xrp-futures">dogecoin ETF</a> approval in 2025. There is then a slight drop to 70% and 65% odds for solana and XRP ETFs, respectively.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">NEW: <a href="https://twitter.com/EricBalchunas?ref_src=twsrc%5Etfw">@EricBalchunas</a> and I took a look at the filings for spot crypto ETFs. We&#39;re putting out relatively high odds of approval across the board. Mainly focused on Litecoin, Solana, XRP, and Dogecoin for now. Here&#39;s the table with the odds and some other details: <a href="https://t.co/xaXaNXLb0M">pic.twitter.com/xaXaNXLb0M</a>&mdash; James Seyffart (@JSeyff) <a href="https://twitter.com/JSeyff/status/1889035896428663261?ref_src=twsrc%5Etfw">February 10, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Some agree. But their followers aren’t afraid to share <a href="https://x.com/OnChainMayo/status/1889038409886282022">when they don’t</a>.&nbsp;



For what it’s worth, some of the Bloomberg guys’ opinions match what we’ve been hearing as well.



I’ve written about these filings in spurts, but let me remind you of the thinking here.



The SEC has not previously labeled LTC and DOGE as securities — a good thing if they want to end up in this type of ETF wrapper. The agency has also <a href="https://x.com/NateGeraci/status/1887609842396741767">acknowledged</a> the litecoin filings. That’s another good sign, because we’ve seen (before getting to that point) fund managers withdraw products the SEC isn’t ready to consider.



Seyffart is expecting further acknowledgements this week.



As for the assets Balchunas and Seyffart think have a slightly lower probability of ending up in a US ETF this year, SOL was <a href="https://blockworks.co/news/lightspeed-newsletter-mango-markets-sol">deemed a security</a> in several SEC lawsuits. And the regulator <a href="https://blockworks.co/news/sec-advances-ripple-appeal">filed an appeal</a> last month in its case against Ripple.



Ripple chief legal officer Stuart Alderoty said in a January X <a href="https://x.com/s_alderoty/status/1879680738926481670">post</a> that he expects the “rehash of already failed arguments” to likely be “abandoned by the next administration.”



Even so, Bitwise general counsel Katherine Dowling warned of <a href="https://blockworks.co/news/sec-in-purgatorial-state">the SEC’s “purgatorial state”</a> until agency chair nominee <a href="https://blockworks.co/news/sec-chair-nominee-crypto-past">Paul Atkins</a> is confirmed. And she noted court cases don’t just go away overnight — “nor should they.”



SEC Commissioner Hester Peirce <a href="https://blockworks.co/news/hester-peirce-on-sec-priorities">confirmed that last week</a>: “Determining how best to disentangle all these strands, including ongoing litigation, will take time.”



Dowling added that DOGE is not among the “dolphins in the fish nets” — alluding to the assets with an unclear securities status (due to SEC claims).



So why aren’t the LTC and DOGE ETF odds at 100%? Well almost nothing is a sure thing (you know the death and taxes mantra).



ETF.com’s Sumit Roy told me last month “the SEC remains cautious about market manipulation and custody risks, which apply to all crypto ETFs.”



The SEC’s 240-day clock to rule on the litecoin proposals runs out in early October. Mark your calendars.



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Is a litecoin ETF the 2025 frontrunner?

Kate Irwin

This is a segment from The Drop newsletter. To read full editions, <a href="https://thedrop.beehiiv.com/subscribe">subscribe</a>. 



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The AI platform Kaito has crypto devs and traders yapping more than ever on Twitter/X recently thanks to Yaps, its tweet-to-earn leaderboard where posting about crypto gets you points. 



After connecting your X account and crypto wallet, Kaito’s AI tool analyzes your posts to decide whether they deserve any points. Your account’s standing will also be partly determined by how many “smart followers” or influential accounts you have following you.



Last week, Ethereum founder Vitalik Buterin held the top spot as the #1 Yapper, but has since lost first place to Binance CEO Changpeng “CZ” Zhao.&nbsp;



Other crypto influencers can be found among the highest-ranking yappers, including some with CryptoPunks, Pudgy Penguins, and Milady PFPs.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfASsS_MOYGQfxrWVjJL5DWj89aTfWad1FpBBSpi7jXLqQBdVFCwAMCjDMblVKwhOwehrLzuToql98PVK1EcX7Q5xXqJO35F9WMEBx2mdtHm7X53L4pI1SgusiAbcoj_dfP55k3HQ?key=4q7KpDkOtKMJKfUwkD0NZU94" alt=""/><figcaption class="wp-element-caption">Kaito’s Yap leaderboard</figcaption></figure>



Unsurprisingly, yappers are already trying to game the system to get as much YAP as possible.&nbsp;



One pseudonymous crypto trader known as “hodl” <a href="https://x.com/hodl_says/status/1887583743549878466">claims</a> that getting your “smart followers” to engage with your crypto posts will get you more points. Echo chambers supposedly won’t help, and posts need to be made at “optimal times” for maximum visibility. Kaito’s <a href="https://faq.yaps.kaito.ai/">FAQ</a> suggests that quality wins over quantity when it comes to <a href="https://knowyourmeme.com/memes/poasting">poasting</a>.&nbsp;



Others have pointed out other possible loopholes that users may have been exploiting to get points. Last week, a few accounts <a href="https://x.com/liam_xbt/status/1887823314405466181">claimed</a> that posting or commenting the word “reply” repeatedly in a post got them hundreds of Yaps. We’ve reached out to Kaito on this, and whether this issue has been fixed.



Kaito calls its Yaps leaderboard “InfoFi” because its top posters are providing what it believes to be insightful information. But if you ask me, it’s SocialFi re-packaged for 2025 (remember friend.tech? And Stars Arena?).&nbsp;



Kaito’s Yaps are SocialFi because its ranking system is using a popularity metric to help determine whether accounts should rise to the top. That’s less of a meritocracy and more of a popularity contest. Nothing necessarily wrong with that, but let’s call a spade a spade.



In crypto, some of the popular kids also happen to be nerds — or <a href="https://blockworks.co/news/changpeng-zhao-sentencing-verdict">convicted felons</a>.



And if you’re asking “wen token,” we don’t actually know yet. So far, this yap-to-earn race is based on the assumption that eventually, a pile of Yap points could help yappers get free money in an upcoming token airdrop.&nbsp;



But because posting is free, the only thing you might lose is the time you spent typing.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Yap-to-earn takes over Twitter

Macauley Peterson

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/research">subscribe</a>.



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Lido, which holds about <a href="https://dune.com/hildobby/eth2-staking">27%</a> of staked ether, is out with <a href="https://blog.lido.fi/lido-v3-ethereum-staking-infrastructure/">its v3 plans</a> today. At the heart of this upgrade is stVaults — modular smart contracts designed to provide greater flexibility, boost institutional adoption and engender deeper DeFi integration.



Konstantin Lomashuk, a founding contributor to the protocol, calls stVaults “a flexible foundation for the next phase of staking [that] upholds the security and decentralization the Lido protocol is known for.”



<h2 class="wp-block-heading">Modular staking and restaking</h2>



stVaults introduce a modular staking framework with components that operate alongside the Lido Core Protocol. This allows for customized validator setups, adjustable fee structures and optimized risk-reward profiles — including restaking.



V3 is anticipated to grow institutional interest in Ethereum staking, as stVaults should provide the customizable infrastructure needed to support regulated staking products and new financial instruments like <a href="https://blockworks.co/news/ether-etf-developments-sec">staking-enabled ETFs</a>. Beyond institutions, the structure enables participation from independent validators, asset managers and DeFi builders.



For institutional stakers, stVaults aim to allow staking setups that align with compliance requirements, such as validator customization, controlled deposit and withdrawal processes and optimized fee structures.



With BYOV (Bring Your Own Validator), node operators can presumably offer bespoke staking products, attracting high-volume stakers and diversifying revenue streams.



Curators and asset managers leveraging stETH as collateral will be able to implement advanced staking strategies that integrate with the broader DeFi ecosystem.



Among “advanced” strategies are those that involve restaking. Without explicitly mentioning <a href="https://blockworks.co/tag/eigenlayer">EigenLayer</a> or <a href="https://blockworks.co/tag/symbiotic">Symbiotic</a> by name, <a href="https://blockworks.co/tag/lido">Lido</a> references &#8220;emerging restaking trends&#8221; and &#8220;shared security.” The key differentiator is that stVaults introduce an opt-in model for shared security strategies. This allows participants to engage with restaking protocols while mitigating exposure to restaking risks for the Lido Core Protocol.



A separate vault token can have its own liquidity and DeFi integrations, a Lido spokesperson told Blockworks. “<a href="https://blockworks.co/newsletter/research/issue/post_14cd3f9b-ee22-45c8-a118-87c8783a1fd0">Mellow</a> has done something similar, but the key difference here is that this variant can be directly linked to a specific node operator, which wasn’t possible before.”&nbsp;



<h2 class="wp-block-heading">Institutional growth and decentralization</h2>



In parallel with Lido v3, the Lido Ecosystem BORG Foundation has been established following <a href="https://research.lido.fi/t/establishment-of-lido-ecosystem-borg-foundation-as-a-lido-dao-adjacent-foundation/9345">a proposal</a> that <a href="https://snapshot.box/#/s:lido-snapshot.eth/proposal/0x7f72f12d72643c20cd0455c603d344050248e75ed1074c8391fae4c30f09ca15">passed</a> overwhelmingly with broad support, including from Blockworks Research. The BORG Foundation enhances Lido’s ability to form institutional partnerships, ensure compliance and provide additional governance safeguards.



The foundation allows Lido DAO to directly appoint and remove directors, oversee multisig management and provide indemnification for contributors. By creating a structured legal entity, the BORG framework aligns with Lido v3’s focus on institutional grade staking infrastructure.



Lido maintains that stVaults will also contribute to Ethereum’s decentralization. Lido dominance <a href="https://blockworks.co/news/lido-centralization-debate-ethereum">has been a concern</a> for the more strident decentralization advocates in the past. The Reserve Ratio (RR) mechanism ensures a portion of staked ETH remains bonded as collateral, enhancing security and preventing excessive rehypothecation. This model fosters a more decentralized validator network, ensuring Ethereum staking remains both robust and liquid, according to the proposal.



V3 maintains liquidity through stETH fungibility and in-protocol redemptions, making it easier for stakers to enter and exit positions without disrupting the broader market.



<h2 class="wp-block-heading">Rollout plan</h2>



Pending approval from the <a href="https://lido.fi/governance">Lido DAO</a>, the rollout of Lido v3 will proceed in three phases:



<ul class="wp-block-list">
<li>Early adopter program: Select partners will build and test staking vaults, preparing for a smooth transition to full stVault functionality upon mainnet launch.</li>



<li>Testnet: Rigorous testing and integrations with ecosystem partners will ensure security and stability.</li>



<li>Mainnet: Activation of institutional staking setups, advanced staking strategies and opt-in shared security mechanisms.</li>
</ul>



With the combined advancements of Lido v3’s modular staking infrastructure and the Lido Ecosystem BORG Foundation, Lido is cementing its role as a foundational component of Ethereum staking.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Lido V3 brings modular staking and opt-in restaking

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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So Binance and the SEC jointly <a href="https://www.courtlistener.com/docket/67474542/securities-and-exchange-commission-v-binance-holdings-limited/?filed_after=&amp;filed_before=&amp;entry_gte=&amp;entry_lte=&amp;order_by=desc">filed</a> for a stay on their ongoing court battle, which would — if approved — give the two parties two months to pause and figure out this new era. 



Shocked? You shouldn’t be.



Last month, Haynes Boone partner Matthew Frankle told Empire that <a href="https://blockworks.co/news/sec-crypto-lawsuits-future">he wouldn’t be surprised</a> to see a bunch of the crypto-focused cases filed by a former SEC focused on regulation by enforcement dropped.&nbsp;



So it also wouldn’t be surprising to see this type of stay filed in a case like Coinbase’s. After all, both Binance and Coinbase have been fighting the SEC for a few years now, and while there are <a href="https://blockworks.co/news/coinbase-binance-suits-different">distinct differences</a> in the cases, there are also some similarities.&nbsp;



Back to the filing: both sides argue that the 60-day pause would allow the SEC’s shiny new crypto task force to focus on a potential “resolution” to the case. Importantly, it sounds like the SEC was the first one to knock on Binance’s door asking for the stay.&nbsp;



Oh, how times have changed.&nbsp;



If I’m reading the tea leaves — or legalese if you’d prefer — then it sounds like one of the Task Force’s first orders of business is going to be sorting through the Binance case if they think a 60-day pause is enough time for both sides to figure out how to proceed.&nbsp;



“Many cases remain in litigation, many rules remain in the proposal stage, and many market participants remain in limbo,” SEC Commissioner and task force head Hester Peirce <a href="https://www.sec.gov/newsroom/speeches-statements/peirce-journey-begins-020425">wrote</a> earlier this month. ”Please be patient.” If the SEC is already starting to make moves, then times really have changed and a brighter future is on the horizon.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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What the Binance and SEC’s temporary ceasefire means for other crypto cases

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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Here’s the thing about strategic reserves.



The name implies that whatever is in the reserve is a stockpile that can be utilized at some point in the future when the situation calls for it.



In the US, the government maintains a <a href="https://www.energy.gov/ceser/northeast-home-heating-oil-reserve">stockpile</a> of one million barrels of diesel fuel spread between Massachusetts, New Jersey and Connecticut — a trove of oil to be released to heat homes and businesses should there be a supply disruption somewhere down the line.&nbsp;



A strategic grain reserve does much the same thing, but for a critical food ingredient.



They do not necessarily have to directly benefit the general public, either. At one point, the government was also stockpiling helium, <a href="https://www.cfr.org/backgrounder/state-us-strategic-stockpiles">hoarding</a> it for use in military blimps, although these days the private sector handles that, and the helium instead is used for rockets and superconductors.



So what would a strategic crypto reserve actually be for? What future calamity could a portfolio of random coins help alleviate?



A bitcoin-only strategic reserve is the easiest to square. As far as coins go, it’s obviously the most resistant to major long-term corrections — it has always bounced back from its semi-regular 80% drawdowns.



BTC is also effectively uncorrelated with the rest of the crypto market — because it almost always leads it. That makes it the obvious choice for a strategic reserve.&nbsp;



After all, bitcoin’s primary modern use case is buying and holding long-term, which is about as close to an overarching goal for any strategic reserve as we’ve got right now. Maybe one day in the future, on some rainy day, the US could sell its bitcoin something, pay off some debt or otherwise fund initiatives for the common good.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcHjx1_-Z4PWn9T20BR3HIjnpjZWLRruCdnng5au0MQFGH1x4vEYuIOOiuvkBG2J9PfMPhW57RHCRpimfuLJYpAyXnlMQxiDrLBkUQh8DmoO3qcBKaXqcdhC12AAQfj7qjjB9B5UQ?key=JOAUs5lZRL4PgoRC0B8h7JAu" alt=""/></figure>



As it stands, the nearest things we have to a US strategic crypto reserve are the $20 billion BTC seized through criminal cases over the years — which is still on track to be liquidated at some point, although perhaps not in the short term.



Then, there’s the growing strategic reserve maintained by Trump’s upcoming DeFi project World Liberty Fi. It’s so far spent $303 million on seven different coins since the end of November, as recently as last week, with nearly two-thirds of it going to ETH.&nbsp;



Tracking the value of World Liberty Fi’s reserve is more difficult after it moved most of it into Coinbase Prime custody earlier this month. But after piecing together the onchain data, I calculated that the portfolio was worth just over $261 million earlier this morning.



That puts it in the red by about 14% on all of its purchases to date (as shown by the blue line on the chart above, while the other lines show the overall performance of each position).&nbsp;



TRX is the only hold still green, but only barely, with ENA the worst — World Liberty Fi is down around $2.7 million on its ENA positions right now. The portfolio is largely being held up by bitcoin, with it down around $30 million in its ETH compared to $5 million on BTC.



Perhaps there’s no reason for World Liberty Fi’s strategic reserve to exist at all, other than basic treasury management common to many crypto projects, not to mention the <a href="https://blockworks.co/news/trump-backed-project-token-swaps">reported token swap deals</a> relayed by Lightspeed’s Jack Kubinec.



But if it really turns out that World Liberty Fi’s crypto portfolio is in fact Trump’s <a href="https://blockworks.co/news/trump-strategic-crypto-reserve">anticipated strategic reserve</a>, then it will need to be actively managed, especially as we get closer to the next bear market.



If World Liberty Fi’s portfolio drops further, labeling it as “strategic” could get embarrassing.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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Why a US crypto strategic reserve would need active management

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed">subscribe</a>.



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In today&#8217;s edition of sentences I never expected to write: The Central African Republic launched a Solana memecoin over the weekend, announced by President Faustin-Archange Touadéra on X.



President Touadéra has long been a crypto fan, following El Salvador’s lead in adopting bitcoin <a href="https://blockworks.co/news/el-salvador-approves-bitcoin-as-legal-tender-in-supermajority">as legal tender</a> in 2022. This latest foray into the blockchain could prove far more lucrative for the state: The CAR token peaked at over $800 million in market capitalization, according to DEX Screener. That’s nearly a third of the nation’s 2023 GDP of $2.76 billion.&nbsp;



As is always the case with memecoins, however, CAR quickly crashed and currently holds $50 million in market cap.&nbsp;



The obvious comparison here is to Donald Trump’s <a href="https://blockworks.co/news/trump-memecoins-rock-solana">inauguration eve memecoin</a>, but unlike TRUMP, CAR claims to have a purpose. 45% of CAR’s supply is earmarked for “country development” and “charity,” the project’s official website claims. CAR tokens have been <a href="https://x.com/streamflow_fi/status/1888875359182967159">locked</a> up on the Solana token distribution platform Streamflow.



The CAR memecoin’s website and services are managed by COMIGEM, according to its terms and conditions. COMIGEM is a state-owned mineral buying office in the Central African Republic. 25% of the CAR supply is set aside for “Creators &amp; Company,” which would presumably refer to COMIGEM. An email associated with CAR did not return requests for comment.&nbsp;



Jupiter, the Solana DEX aggregator, was able to <a href="https://x.com/weremeow/status/1888765984393347477">verify</a> that it is in contact with the team behind the token, and it asked the team to make its blockchain contract uncancelable.&nbsp;



This afternoon, Touadéra posted a video of a high school in the country that is “deteriorating rapidly” and said $50,000 worth of CAR tokens will be allocated within the next 30 days to repair the school.



In a video posted to X earlier today, Touadéra celebrated the memecoin launch “success” and cast the Central African Republic as being at the “forefront” of a “revolution” being wrought by blockchain.



The token’s market capitalization jumped some $200 million shortly after the president’s post, before quickly dipping lower than where it had been trading before.



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Central African Republic debuts memecoin managed by state-owned mineral firm 

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It was a few weeks back I wrote about <a href="https://blockworks.co/news/us-states-btc-reserve-plans">new proposed bills</a> in Texas and Oklahoma focused on crypto investments. They joined plenty of states with similar plans — i.e. <a href="https://www.legis.state.pa.us/cfdocs/billInfo/billInfo.cfm?bn=2664&amp;body=H&amp;sInd=0&amp;sYear=2023&amp;type=B">Pennsylvania</a>, <a href="https://x.com/Dennis_Porter_/status/1877746381949116787">New Hampshire</a> and others.&nbsp;



More recently, Caylin Young, a delegate in Maryland’s state legislature, proposed establishing a bitcoin reserve fund. There appears to be a hearing on this slated for March 6.



The bill would allow the state treasurer to invest funds obtained through enforcing certain gambling violations toward the crypto asset, according to a proposal <a href="https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB1389?ys=2025RS">synopsis</a>.&nbsp;



In Kentucky, <a href="https://apps.legislature.ky.gov/record/25rs/hb376.html">House Bill 376</a> was introduced to “authorize the State Investment Commission to make investments in certain digital assets and bullion.”&nbsp;



The bill does not mention BTC specifically. But it does note stablecoins (with appropriate US approval) and digital assets (ex stablecoins) with a market cap exceeding $750 billion over the previous calendar year.



That market cap figure is used in Iowa’s House File 246, too — legislation also introduced last week.



This comes after a proposal in Utah allowing the state to allocate up to 5% of certain public funds to crypto <a href="https://le.utah.gov/mtgvotes.jsp?voteid=34423">moved on</a> to the state senate. Contrarily, North Dakota’s House <a href="https://legiscan.com/ND/text/HB1184/id/3046589">rejected</a> a similar plan.&nbsp;&nbsp;



ProChain Capital’s David Tawil wrote in a Sunday email that the <a href="https://bitcoinreservemonitor.com">strategic bitcoin reserve race</a> “is on and it is real.”



“The largest investors in the world (municipalities, pension funds and nation-states) are going [to] compete to accumulate bitcoin as a digital gold, to serve as a safe haven reserve asset and, in the case of nations, to combat deflation in their own currencies,” he wrote.



Though specifics around the federal government’s possible BTC-buying plans remain unknown for now, there’ll be plenty to watch at the state-level.



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American states jockey in BTC reserve race 

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Bitcoin’s price is roughly flat week over week as investors eye the next potential crypto market mover.



As Wintermute OTC trader Jake O. put it: “After two consecutive weekends of heightened volatility, the past few sessions have been noticeably slow, with spot ranges tightening.”&nbsp;



“This slowdown coincides with a lack of fresh crypto-specific narratives, as traders reassess positioning after last week&#8217;s liquidation event,” he added.



You want narratives?



Galaxy Digital CEO Mike Novogratz shared some views — albeit higher-level and less focused on day-to-day prices — for listeners of his panel at the Ondo Summit last week. You might recall I shared the <a href="https://blockworks.co/news/ondo-summit-crypto-exec-takes">regulation/legislation takeaways</a> from that event.



Novogratz’s first prediction came when he introduced his company, which hopes to go public. “We’ve been waiting 4.5 years, there’s <a href="https://blockworks.co/news/hester-peirce-on-sec-priorities">a new SEC</a> and so I think you’re going to see a whole host of companies — come May or June — listing on the New York Stock Exchange or Nasdaq.”



He then shared scenes from the VP JD Vance’s ball last month (separate from the Crypto Ball<a href="https://blockworks.co/news/inauguration-weekend-crypto-ball"> Casey attended</a>). Peter Thiel and Mark Zuckerberg were there, he said, along with what Novogratz estimated to be 20 crypto CEOs.



This big representation felt bullish, he noted. Even if, in Novogratz’s words, “the <a href="https://blockworks.co/news/trump-more-than-a-memecoin">Trump coin</a> didn’t help that spirit.”&nbsp;&nbsp;



“I think [bitcoin will] be on the government’s balance sheet in six months,” he said, noting BTC has “carved out a lane” as a store of value.&nbsp;



On that note, the Galaxy CEO casually claimed to have had lunch with the head of one of the largest sovereign wealth funds two weeks after the election. You know, as really rich executives do.



Essentially <a href="https://blockworks.co/news/trump-vs-biden-crypto-orders">if the US is to buy bitcoin</a> (even at the <a href="https://blockworks.co/news/bitcoin-as-a-potential-us-reserve-asset">state-leve</a>l, which we’ll discuss later), many of these funds want in too.



“He was cutting his first $500 million check to dip his toe in,” Novogratz said.



Also on that panel was Pantera Capital founder Dan Morehead, who chimed in to address those talking of a crypto bubble.&nbsp;



“How can you have a bubble that nobody owns?” he said. “The median holding of an institutional investor in blockchain is zero.”



Just imagine the impact of a tiny fraction of the $500 trillion of global assets <a href="https://blockworks.co/news/2025-btc-adoption-wave">migrating to crypto</a>, Morehead posed. Given his recent convos with institutions that have changed their tune, he expects that to occur this year.&nbsp;



After bitcoin’s ascent to $109,000, it has obviously retreated — hovering around $97,650 at 2:15 pm ET Monday. Could it move lower to, say, $80,000?



Sure, Novogratz said.&nbsp;



“That doesn’t invalidate this space at all,” he added. “Quite frankly that’s the buying opportunity.”



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



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