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Bitcoin (BTC) faces an ‘identity crisis’ and DeFi devs need to stop acting like tech bros

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Bitcoin (BTC) faces an ‘identity crisis’ and DeFi devs need to stop acting like tech bros

The cryptocurrency market is enduring a sharp narrative shift, but the real growth is happening away from the spotlight, according to the co-founder of Solana-native yield protocol Solstice Labs.

Ben Nadareski argued that the industry’s biggest asset is experiencing structural confusion in an interview with CoinDesk on Tuesday.

“Bitcoin BTC$66,520.39 is going through a bit of an identity crisis right now,” Nadareski said. “It’s not the store of value, like gold, to the masses. It’s also not the speculative investment vehicle that everybody was really attracted to. While bitcoin and the core assets go through their identity crisis, quiet players in the DeFi industry are growing rapidly.”

Decentralized finance’s “silent” growth is heavily challenged by ongoing exploits, according to Nadareski, a flaw he blamed on developers frequently building innovative code while completely ignoring the core responsibilities of managing capital.

“They don’t quite realize you’re now also a financial asset manager if you’re working in DeFi,” Nadareski stated. “That doesn’t mean you’re in tech. That means you’re building tech in financing, which adds two aspects of risk to the market.”

OpenZeppelin co-founder and former CTO Manuel Aráoz said “DeFi is not safe anymore” last month noting that AI coding agents have made smart contracts fatally vulnerable.

Drift Protocol and Kelp Dao were hacked by North Korean cybercriminals in April in two exploits that drained nearly $600 million from the two lending crypto pools. In February 2025, Bybit suffered a $1.46 billion attack, described as the biggest hack of all time.

Nadareski said that to bridge this trust gap, DeFi platforms must hold themselves to traditional banking standards, implementing real-time proof of reserves and automated multi-signature time locks rather than relying on unproven code layers.

DeFi principles

The entry of legacy banking giants does not mean crypto natives have lost the space, Nadareski said. Instead, he pointed to market structure where Wall Street uses faster digital rails for its operational back offices, while decentralized platforms preserve direct user access.

“The convergence is already among us. The institutions have been coming for years and now they are here,” he highlighted.

Winning platforms will be those that accommodate large financial entities while maintaining low fees and equal access for everyday retail users. Since its launch, Solstice has scaled past $500 million in total value locked (TVL) from over 40 institutional allocators, including Galaxy Digital and Susquehanna.

Solstice has also unveiled a strategic partnership with big-data analytics platform ApexE3, which is backed by Consensys and Tensorix.

Treating decentralized networks as a financial utility rather than a tech playground is the only path forward, according to Nasareski.

“Expect more out of DeFi than you do TradFi,” he concluded. “The average retail end-user anywhere in the world should expect 10 times more of an output of transparency, trust, and optimization of their capital.”

Bitcoin’s slide to $67,000 is accelerating a shift into digital dollars

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Bitcoin’s slide to $67,000 is accelerating a shift into digital dollars

A week ago, CoinDesk informed readers of the renewed rotation of funds into dollar equivalents such as tether USDT$0.9987 and USD Coin (USDC) stablecoins as bitcoin BTC$66,671.09 pulled back from the early May highs above $80,000. That combination was an early warning sign of potential full-blown risk aversion in the crypto market.

Those early warning signs have now turned into a full-blown trend.

Bitcoin has dropped about 12% over the past week to around $66,800, pulling the broader crypto market lower with it, CoinDesk data show. Bitcoin’s dominance rate, or its share of the total crypto market, has fallen to 58.5%, reversing gains that had pushed it as high as 61.2% in April and early May.

At the same time, tether USDT$0.9987, the world’s largest dollar-pegged stablecoin, has seen its dominance jump to 8.30%, the highest level since late February. USD Coin (USDC) has also climbed back to levels last seen in early April.

While the two stablecoins still make up just 11% of the overall market, which is paltry compared to bitcoin, their rising share signals a clear flight to dollar liquidity inside crypto. And that shift is getting harder to ignore, as BTC loses ground.

This pattern has played out in previous market swoons, including the sharp sell-off from over $90,000 to nearly $60,000 in January and February.

Bitcoin isn’t alone in the sell-off. Ether (ETH), XRP, and Solana (SOL) have each dropped 8-11% over the past week. Other coins such as BCH, SUI, and RAO have plunged nearly 20%. All of this is seemingly feeding a clear flight into the dollar equivalents.

Interestingly, traditional markets are showing no such flight to the dollar. The Nasdaq and S&P 500 are both trading near record highs, while the U.S. Dollar Index, which measures the greenback against a basket of major currencies, remains stuck in a tight range between 98.50 and 99.50.

Galaxy enters institutional prediction markets with $10 million Arca trade

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Galaxy enters institutional prediction markets with $10 million Arca trade

Galaxy Digital (GLXY) said Tuesday it had launched over-the-counter (OTC) prediction markets trading for institutional investors, becoming one of the first major digital asset firms to offer large-scale access to event-driven markets through a bilateral trading framework.

The Nasdaq-listed company said that the new service, offered through its global markets trading desk, will allow hedge funds, family offices and other institutional investors to trade contracts tied to political, economic and geopolitical events while accessing liquidity and trade sizes typically unavailable through retail-focused prediction market platforms.

Shares of the company are down 6% on Tuesday, in line with the broader crypto stock market.

The launch comes as prediction markets have gained traction among investors seeking ways to express views on real-world events ranging from elections and central bank decisions to regulatory developments. Platforms such as Kalshi and Polymarket have experienced rapid growth over the past two years, with many crypto-native companies entering the market.

Galaxy said its offering initially covers non-sports event contracts traded on Kalshi and Polymarket, with plans to expand to additional venues. The firm will also allow clients to combine prediction market positions with hedges across equities, commodities and other asset classes, creating broader event-driven investment strategies.

As part of the launch, Galaxy facilitated a $10 million trade with crypto-focused hedge fund Arca tied to the outcome of the proposed CLARITY Act, legislation that would establish a regulatory framework for digital assets in the United States.

“Event-driven markets are becoming core to how sophisticated investors express macro views, and they deserve institutional infrastructure to match,” Jason Urban, Galaxy’s global co-head of digital assets, said in a statement.

Jeff Dorman, Arca’s chief investment officer, said prediction markets offered an effective way to hedge the fund’s exposure to ongoing negotiations in Washington surrounding crypto regulation, but that liquidity constraints on existing platforms made it difficult for large investors to participate directly.

The move reflects a broader institutionalization of prediction markets, a sector that has historically been dominated by retail traders. By acting as a principal counterparty, Galaxy can warehouse risk and facilitate larger transactions while providing greater discretion than exchange-based trading.

Earlier today, Polymarket completed its first block trade in a transaction between crypto broker FalconX and trading tech startup Anera Labs.

Industry observers say the entrance of firms such as Galaxy could help deepen liquidity and improve pricing efficiency in prediction markets by bringing professional investors into the space. Supporters argue that greater institutional participation could make market prices more useful as indicators of future outcomes, while critics caution that regulatory uncertainty remains a key challenge for the sector.

The launch further expands Galaxy’s growing derivatives and trading business. The New York-based firm, which provides institutional digital asset trading, asset management, staking and tokenization services, has increasingly positioned itself as a bridge between traditional financial markets and emerging digital asset infrastructure.

Coinbase (COIN) backs Ethena (ENA) ahead of savings product launch for 100 million users

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Coinbase (COIN) backs Ethena (ENA) ahead of savings product launch for 100 million users

Coinbase Ventures, the investment arm of crypto exchange Coinbase (COIN), said it had backed Ethena (ENA), buying the protocol’s token on the open market as the two firms prepare to launch a new onchain savings product for the exchange’s more than 100 million users.

Ethena announced Tuesday that it partnered with Coinbase to expand onchain finance and savings offerings, with the first initiative scheduled to launch next week.

“Excited to partner with Coinbase for the first time to support their dollar savings products,” Ethena founder Guy Young said in a post on X. “The upcoming integration next week will be the first time Ethena products are available for their 100m+ user base.”

As part of the deal, Coinbase said it is already Ethena’s primary custodian, wallet provider and perpetuals venue, while the protocol’s USDe yield token will be distributed on the Base network and the “wider [Coinbase] ecosystem.”

ENA, Ethena’s governance token, surged 20% following the news before paring gains. The token was up 3% over the past 24 hours despite the broader crypto market pullback.

The investment marks a notable endorsement from Coinbase as Ethena seeks to expand beyond crypto-native users. Ethena emerged as one of crypto’s fastest-growing protocols, combining stablecoin demand with derivatives-based funding strategies to provide yield to investors in a token form. Assets on the protocol swelled to $15 billion by the October market peak, but since then declined to $5.3 billion as demand and yields vaned amid the crypto downturn.

The announcement comes as lawmakers continue to debate the CLARITY Act, a market structure bill that could provide a clearer regulatory framework for crypto products in the U.S. Young said the legislation could create additional tailwinds for onchain-native assets such as USDe, Ethena’s synthetic dollar token.

Tapping into Coinbase’s user base

While neither company disclosed details of the upcoming product, investors speculated the partnership could significantly expand Ethena’s distribution.

Access to Coinbase’s user base could provide a new source of capital as the protocol seeks to expand beyond decentralized finance into mainstream crypto brokerage platforms.

Yan Liberman, managing partner at Delphi Ventures, an investor in Ethena, said the deal could potentially connect Coinbase’s roughly $19 billion USDC stablecoin ecosystem with Ethena’s yield-generating infrastructure.

“If sUSDe yields clear baseline USDC rates, Coinbase can offer better USDC lending yields,” Liberman wrote on X. “Ethena gets deeper and cheaper funding than native DeFi alone.”

Expansion to institutional credit market with Anchorage

Ethena is also pushing deeper into institutional markets.

On Tuesday, the protocol and crypto bank Anchorage Digital said it had broadened its partnership with Ethena to support institutional lending.

Under the arrangement, Anchorage will manage collateral for Ethena’s loan investments through its Atlas platform, allowing borrowers to keep assets in custody rather than moving them onchain.

The setup aims to make crypto-native lending more accessible to institutions that require regulated custody and compliance controls.

“Institutions want access to crypto-native capital, but not at the cost of custody, controls, or operational rigor,” Anchorage CEO Nathan McCauley said in a statement.

The announcement builds on an existing relationship between the firms. Anchorage Digital Bank already serves as the U.S. issuer of Ethena’s USDtb stablecoin.

Charles Schwab Sets Mid-2027 Target For Advisor Bitcoin And Crypto Spot Trading

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Charles Schwab Sets Mid-2027 Target For Advisor Bitcoin And Crypto Spot Trading

Charles Schwab, the country’s largest custodian for registered investment advisors, is on track to roll out spot cryptocurrency trading, transfers, and custody services for its advisor channel by mid-2027 — a move that could reshape how trillions of dollars flow into digital assets through professional wealth management.

The disclosure came at Schwab’s Advisor Services Midyear Media Roundtable on May 28, where Jalina Kerr, Managing Director and Head of Advisor Experience, confirmed the timeline. 

The advisor product is distinct from what Schwab rolled out to retail clients this spring. In April 2026, the bank announced Schwab Crypto™, a spot Bitcoin trading service for individual brokerage account holders, built through Charles Schwab Premier Bank and executed via sub-custodian Paxos. 

That product launched at 75 basis points per trade, triggered debate about whether advisors would find it cost-efficient relative to crypto ETFs, and was restricted from New York and Louisiana residents.