May 20th, 2025
Market Overview:
Digital assets had a week of extremely strong performance, marked by historic returns for the market’s second-largest asset, Ether.
- Bitcoin surpassed a $2.2tn market capitalisation this week, and approached its January record high of around $109,000
- This price level returned Bitcoin (at the time of writing) to a $2tn asset
- Bitcoin peaked at $106,790 in early Tuesday trading, up from a $101,680 bottom on Thursday
- According to a new report by Glassnode analysts, this run above $100,000 as been primarily sustained by institutional capital
- Ether had another positive performance, albeit at more modest levels than last week’s historic growth
- Ether experienced a broad and gradual decline throughout the week, peaking early at $2,731 last Tuesday, dipping down to $2,361 on Monday before a recovery to current prices
- Altcoins cooled off somewhat after last week’s explosive growth, with several surrendering recent gains; but some projects such as DeFi protocol Aave still managed to post comfortable double-digit growth
- Overall industry market capitalisation grew to $3.34, with an intraweek high of $3.4tn
- According to industry monitoring site DeFi Llama, total value locked in DeFi grew slightly to $116.5bn
Digital assets experienced another strong week, albeit at more modest levels than last week’s nigh-unprecedented bullishness. Stablecoin legislation advanced in the US as increased bipartisan support opened the door to full approval, crypto ETFs performed strongly across multiple assets, JP Morgan announced it would allow customers to buy Bitcoin, Coinbase faced challenges after last week’s highs, and much more.
What happened: ETF News
How is this significant?
- Digital asset investment products logged another week of strong inflows, with strong performance from both Bitcoin and Ether products
- In total, they added $785m, meaning a fifth consecutive week of overall inflows
- According to Coinshares data published on Monday, this performance “also fully recovers the near $7bn of outflows experienced during the February-March price [tariff-driven] correction”
- Year-to-date inflows now stand at $7.5bn as we approach the halfway-point of 2025
- Spot Bitcoin ETFs were in bullish mode once again, logging inflows on four of the last five trading days (including three days of nine-figure inflows)
- BlackRock’s IBIT was star performer again, boasting a weekly high $410m inflows on Thursday, alongside $233m and $130m flows
- These were by far the largest additions of the week, as the next-best inflows came from Fidelity’s FBTC ($68m on Friday) and ARK Invest’s ARKB ($58m the same day)
- Both these performances however come with the caveat of following the week’s largest outflows from the same funds on Thursday; $124m and $132m respectively
- In late-breaking Monday reporting, ARKB erased all the above outflows, adding $155m, alongside nine-figure inflows for IBIT ($306m) and FBTC ($188m)
- Bloomberg’s chief ETF analyst Eric Balchunas opined that Vanguard is unlikely to ever launch its own Bitcoin ETF, but “I could see them lightening up and letting them be traded on their platform in next year or two, esp if bitcoin hits $150k or $200k, they gonna get sick of being asked about it by customers and their new CEO is one of IBIT's parent”
- According to its latest SEC filings, Abu Dhabi's Mubadala sovereign wealth fund increased its considerable exposure to Bitcoin via IBIT, adding 491,439 shares in Q1
- Total spot Bitcoin AUM is now $109bn; a new record figure driven heavily by institutional acquisition
- Spot Ether ETFs also traded positively, including one of the best days since launch with $64m inflows on Wednesday
- This figure was dominated by BlackRock’s ETHA, which added $58m
- The SEC opened a public comment period on several Solana ETF filings, after delaying a final decision on approval
What happened: Stablecoin news
How is this significant?
- Following last week's delays on proposed US stablecoin legislation, it was finally advanced this week after amendments proved amenable to senate Democrats
- Legislators on both sides of the aisle moved quickly to revive the bill, with several viewing it as crucial to ensuring American competitiveness
- The Trump-linked World Liberty Financial project pushed back on conflict of interest allegations raised last week by opponents of the bill
- One key concession for Democrats was removing plans to allow exchanges such as Coinbase to pay interest on stablecoin holdings
- The GENIUS stablecoin bill can thus be moved to the senate floor for a vote
- As noted by industry publication TheBlock, “Lawmakers voted to invoke cloture—a procedural move that clears the way for further debate—on the Guiding and Establishing National Innovation for US Stablecoins Act, or GENIUS Act”
- Passing US legislation would count as a major win for the digital asset industry; the bill would “require stablecoins to be fully backed by U.S. dollars or similarly liquid assets, mandate annual audits for issuers with more than $50 billion in market capitalization, and add language around foreign issuance”
- Elsewhere in stablecoins, USDC issuer Circle is open to acquisition offers, according to a Monday report by Fortune
- Circle is currently pursuing an IPO, but also willing to entertain takeover offers in excess of $5bn, as per Fortune sources
- At the moment, both Coinbase and Ripple are believed to be interested parties, although it remains to be seen whether either will meet Circle’s valuation
- Bloomberg meanwhile reported on Tether CIO Richard Heathcote, a key figure in securing the USDT issuer’s relationship with custodian Cantor Fitzgerald, which helped legitimise the firm's perception
- Heathcote said “Cantor Fitzgerald spent two years doing indescribably detailed due diligence work on us, I mean, you know, blood type, the whole lot”
What happened: Coinbase news
How is this significant?
- Leading US exchange Coinbase confirmed the industry's largest-ever acquisition and entry into the S&P 500 last week—but featured in somewhat less positive headlines this week
- Coinbase suffered a customer data breach, leading to an investigation by the US Justice Department
- On Thursday, Coinbase disclosed that hackers requested a $20m ransom from the exchange to keep the customer data secret; a ransom which Coinbase refused to pay
- Instead, the exchange offered a $20m bounty for information leading to an arrest
- The exploiters used these details to impersonate Coinbase and fool some customers into transferring over their crypto assets
- In total, the company expects the attack may cost it between $180m and $400m, as it promised to make any users affected by the breach whole
- According to sources, other exchanges including Binance and Kraken were previously targeted in similar social engineering attempts, with less success
- However, the exchange noted that this breach was not directly down to a failure of technology so much as a failure of staffing—instead, it identified (and fired) two support staff in India who were bribed into leaking customer details to hackers
- Cybersecurity CEO Matt Cohen agreed, citing “the fragility of the human access point… It’s still always going to be the weakest link—the people themselves. Whether they’re being phished to be breached or paid to be breached it, doesn’t change the fact that the vulnerability layer sits with people”
- According to Coinbase, less than 1% of monthly active users were affected by the breach
- Additionally, the New York Times reported an SEC investigation concerning misstated user numbers, but Chief Legal Officer Paul Grewal contended it’s a holdover from the Biden administration, and that the exchange hasn’t reported such numbers since 2021
- Wall Street analysts appeared unfazed as sares rebounded swiftly, dismissing the above issues as “little more than noise”
- On a more positive note, Coinbase said it was open to more acquisition’s following last week’s mammoth Deribit deal
- CEO Brian Armstrong told Bloomberg “We are always looking at M&A opportunities… We have a large balance sheet that can be put to use... We are looking at acquisition opportunities, doesn’t mean we swing at every pitch. We want it to be the right opportunity”
What happened: JP Morgan to allow customer crypto purchases
How is this significant?
- JP Morgan CEO Jamie Dimon confirmed this week that the bank would allow its customers to purchase Bitcoin
- Speaking at the bank's annual investor day, he stated “We are going to allow you to buy it. We’re not going to custody it. We’re going to put it in statements for clients”
- This marked a further evolution of the bank's about-turn on the asset class, but Dimon maintained that his own personal opinion as a (devout) crypto sceptic remains unchanged; “I don’t think you should smoke, but I defend your right to smoke. I defend your right to buy Bitcoin”
- In other JP Morgan news, the bank's permissioned Kinexys (formerly Onyx) blockchain recently interacted with a public blockchain for the first time, settling Delivery versus Payment tokenised treasuries on the Ondo blockchain’s testnet
- Kinexys head of settlement solutions Nelli Zaltsman stated “By securely and thoughtfully connecting our institutional payments solution with both external public and private blockchain infrastructures seamlessly, we can offer our clients and the broader financial ecosystem a wider range of benefits and scalable solutions for settling transactions”
What happened: Galaxy Digital proposes share tokenisation
How is this significant?
- Tech billionaire Mike Novogratz’s Galaxy Digital is in talks with the SEC about tokenising its shares, according to Bloomberg reports
- Following SEC crypto task force meetings in March, Novogratz initiated discussions on tokenising its Nasdaq-listed shares, as well as equities
- Tokenisation would enable those assets to be employed across a range of DeFi applications, like lending and trading
- Novogratz said “We are working with the SEC to tokenise stocks. They believe in crypto, they believe in the power of tokenised networks and this technology. I think you’ve got to change your horizon for what’s possible”
- In recent SEC tokenisation roundtable discussions, new chair Paul Atkins likened the transformative potential of the technology to the evolution “from analog vinyl records to cassette tapes to digital software decades ago”
What happened: Morgan Stanley digital asset chief quits, launches DeFi project
How is this significant?
- Morgan Stanley’s digital asset markets head Andrew Peel recently left his position at the bank in order to found a DeFi project, according to people with knowledge of the matter
- The new firm will be based in Swiss crypto hub Zug, issuing and investing in DeFi assets like tokenised funds
- Additionally, it will reportedly “operate a technology business to develop trading products that help traditional firms bridge the gap into the space as it becomes more regulated”
- Credit Suisse veteran Peel was involved in recent moves to enable crypto trading on the bank's E*Trade platform
- In other banking news, Ripple partnered with UAE-based Zand Bank and Mamo to expand cross-border payments in the region, and Standard Chartered was announced as banking provider for crypto prime broker FalconX
What happened: Robinhood acquires Canadian crypto platform
How is this significant?
- In a Tuesday press release, Robinhood confirmed it’s buying Canadian crypto platform Wonderfi in a $179m all-cash deal
- The deal is expected to close in the second half of the year, and follows on from Robinhood’s $200m acquisition of European digital asset exchange Bitstamp last year
- Wonderfi’s team will join 140 extant Robinhood employees in Toronto
- The companies said Canadians will now have greater access to crypto trading thanks to Robinood’s significant business footprint
- Robinhood’s crypto SVP Johann Kerbrat stated “WonderFi has built a formidable family of brands serving beginner and advanced crypto users alike, making them an ideal partner to accelerate Robinhood’s mission in Canada”
What happened: Bitcoin Treasury news
How is this significant?
- Once again, companies in and around the Bitcoin (and crypto) treasury space, added to their holdings
- Cantor Equity Partners disclosed $459m of Bitcoin buys in a regulatory filing, part of its preparation to merge with the newly-founded Twenty One Capital, backed by Cantor Fitzgerald, Softbank, and Tether
- Bitcoin treasury vanguards Strategy (formerly MicroStrategy) built their Bitcoin balance yet further, purchasing 7,390 Bitcoin for just under $765m, according to latest regulatory filings
- Co-founder Michael Saylor said the company has now purchased 576,230 Bitcoin—worth over $59bn—bought at an average price of $69,726, at a total cost of around $40.2bn
- Strategy also found itself the subject of a class-action lawsuit, with plaintiffs alleging “materially false and misleading statements” and securities laws violations
- Japanese Bitcoin treasury firm Metaplanet also increased its holdings, adding 1,004 Bitcoin for $104m, bringing its total to 7,800 Bitcoin
- CEO Simon Gurevich says Metaplanet’s average purchase price sits at $91,343
- On a nation-state level, El Salvador reported $357m unrealised profit on its holdings
- According to the country's Bitcoin office, it now owns around 6,181 Bitcoin
This weekly financial roundup is for informational purposes only and is not financial, investment, or legal advice. Information is based on public sources as of publication and may change. Consult a professional before acting.