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Bitcoin Swings Wildly As Iran Ceasefire Rocks Crypto Markets

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Bitcoin kicked off the week with a surge above $71,000 before retracing, reflecting renewed market sensitivity to geopolitical developments between the U.S. and Iran. 

The leading cryptocurrency had traded below $68,000 over the weekend, leaving investors on edge as markets digested conflicting reports about peace talks in the Middle East.

Monday’s spike came after the U.S. President Donald Trump announced a five-day postponement of planned strikes on Iranian power plants, citing “very good and productive” conversations with Tehran on a “complete and total resolution” of hostilities. Within minutes of the announcement, 

Bitcoin jumped to an intraday high of $71,811, according to Bitcoin Magazine Pro, before easing back to around $70,000. The rally briefly wiped out roughly $791 million in leveraged crypto positions, with $425 million in long positions liquidated.

The momentum was short-lived. Iran’s Foreign Ministry, via state media, denied that any talks had occurred in the form Trump described. 

“We are not the party that started this war, and all these requests should be referred to Washington,” the ministry said, underscoring the continued uncertainty surrounding the conflict. 

The market’s reaction reflected the mixed signals, with volatility dominating early-week trading.

Bitcoin’s resilience in war 

Despite the rollercoaster, BTC remains resilient over a broader horizon. 

Since February 28, when U.S.-Israeli airstrikes triggered retaliatory Iranian attacks and the closure of the Strait of Hormuz, Bitcoin has risen roughly 7%, outperforming the S&P 500 (-4.6%) and gold (-17%). Gold is currently trading near $4,428.

Analysts attribute this outperformance to several rounds of market deleveraging since October 2025, when BTC peaked at $126,080.

The week’s volatility was compounded by broader market factors. 

U.S. 10-year Treasury yields climbed to 4.36% on Monday, reflecting inflation concerns exacerbated by higher oil prices. 

Brent crude, which surged past $107 per barrel after February’s Strait of Hormuz closure, fell back on Monday by 8%, highlighting the interplay between oil markets, inflation expectations, and risk assets such as BTC.

Technically, Bitcoin remains confined within a symmetrical triangle on the daily chart, suggesting consolidation. 

A sustained close above $75,000 this week could pave the way for further gains toward $85,000 and $90,000, while a breakdown below $67,000 would reopen the path to retest recent lows, according to Bitcoin Magazine Pro analysis. 

At the time of publication, Bitcoin’s price is trading near $71,000.

Prediction market boom spurs new VC fund backed by Polymarket, Kalshi CEOs

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A new venture capital firm focused on prediction markets is launching with backing from Polymarket founder and CEO Shayne Coplan and Kalshi co-founder and CEO Tarek Mansour, Bloomberg reported.

The firm, called 5c(c) Capital (named after a section of the Commodity Exchange Act that governs prediction markets) may be the first venture fund built specifically to invest in companies shaped by that regulatory and market structure.

“We want to capitalize on the second-, third-, and fourth-order effects of what we built ourselves,” the founders wrote in a document viewed by Bloomberg.

The launch comes as prediction markets shift from a niche corner of finance into a more visible part of how people track events. Since the U.S. presidential election, trading volumes have climbed and new users have entered the space. Platforms such as Polymarket and Kalshi now host contracts tied to politics, economic data and cultural events, turning public opinion into tradable signals. Polymarket’s trades run on the blockchain. Many crypto-native companies, including Coinbase (COIN) and Kraken, as well as Robinhood (HOOD), have also entered the space in recent months.

That growth has created new business openings beyond the platforms themselves. Startups are beginning to build data tools, liquidity services and compliance systems that support these markets.

5c(c) Capital plans to raise up to $35 million and invest in about 20 portfolio companies over the next two years, according to the document. The strategy centers on early-stage bets tied to infrastructure and services around prediction markets rather than the exchanges alone.

Early backing includes more than twenty investors, among them a portfolio manager at Millennium Management, several crypto-focused venture firms and founders of other prediction market platforms such as PredictIt.

Polymarket declined to comment. Kalshi did not respond in time for publication.

DeFi Has Seen Resolv’s $25M USR Exploit Many Times Before

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The Resolv hack wasn’t a surprise. The same structural flaw has drained hundreds of millions from Morpho, Euler, and Fluid over the past year and the industry kept building on top of it anyway.

On a quiet Sunday morning, someone turned $100,000 into $25 million in about seventeen minutes.

The target was Resolv, a yield-bearing stablecoin protocol. By the time Resolv paused its contracts, its dollar-pegged stablecoin USR had crashed to pennies. It remains deeply depegged, trading around $0.25 as of this writing, down more than 70% on the week.

The blast radius extended well beyond Resolv. Fluid/Instadapp absorbed more than $10 million in bad debt and had outflows of over $300 million in a single day, the worst outflow in its history. Fifteen Morpho vaults were hit. Euler, Venus, Lista DAO, and Inverse Finance all moved to pause USR-related markets.

The mechanism that caused the initial hack to spread its damage – pricing a depegged stablecoin at $1 in a lending market– is not new. It happened at least four times in the past fourteen months.

How the Hack Worked

USR’s minting followed a two-step off-chain process: a user deposited USDC via the `requestSwap’ function, and a privileged off-chain signing key, the `SERVICE_ROLE’, finalized the amount of USR to issue via `completeSwap’. The contract enforced a minimum output but had no maximum. Whatever the key holder signed, the contract honored.

The attacker gained access to that key through Resolv’s AWS Key Management Service. They submitted two USDC deposits, totaling roughly $100,000–$200,000, and used the compromised key to authorize 80 million USR in return. Etherscan shows two transactions worth 50 million USR and 30 million USR, minted in minutes.

“The Resolv USR exploit wasn’t a bug — it was a feature working exactly as designed. And that’s the problem,” said on-chain analyst Vadim (@zacodil).

The SERVICE_ROLE was a regular externally owned address, not a multisig. The admin key had multisig protection, but the mint key didn’t.

“Resolv was audited 18 times,” Vadim said. “One finding was literally called ‘Missing upper [limit]'”

The attacker exited methodically, converting minted USR into wstUSR (the staked wrapped version) to slow the market impact, then rotating through Curve, Uniswap, and KyberSwap into ETH. The attacker’s wallet holds approximately 11,400 ETH (~$24M). Resolv’s collateral pool, the ETH and BTC backing the system, survived intact even as the stablecoin crashed.

How the Contagion Spread

The Resolv hack is two incidents stacked on top of each other. The first is the mint exploit. The second is a cascading lending market failure.

When USR and wstUSR collapsed, every lending market that had accepted them as collateral faced the same problem: their oracle was still pricing wstUSR near $1.

Omer Goldberg, founder of risk analytics firm Chaos Labs, documented the mechanism. His key finding was that “The oracle is hardcoded and thus never repriced. wstUSR was marked at $1.13 while trading at ~$0.63 on secondary markets.”

Traders bought cheap wstUSR on the open market and posted it as collateral at the oracle’s $1.13 valuation on Morpho or Fluid, then borrowed USDC against it and walked away.

At Fluid, the team secured short-term loans to cover 100% of the bad debt and committed to making every user whole. At Morpho, co-founder Paul Frambot said ~15 vaults had significant exposure, all in high-risk, long-tail collateral strategies.

Prominent curator Gauntlet said that “A few high-yield vaults had limited exposure.”

But D2 Finance challenged that framing directly, posting onchain data showing Gauntlet’s flagship “USDC Core vault” had $4.95M allocated to the wstUSR/USDC market. Goldberg later said Gauntlet vaults accounted for 98% of lender liquidity in that market.

Frambot said in a written reply to The Defiant, “we’re always looking at how to better surface risks across the board. That said, we don’t think the underlying issue here was a lack of labeling.”

Frambot added, “Morpho is oracle agnostic, meaning it allows curators to choose from any oracle that they believe is best for a given market. Morpho is open, permissionless infrastructure built to externalize risk management to curators.”

“ It’s very difficult to impose objectively ‘correct’ guardrails that hold true across all scenarios,” Frambot said. “Imposing constraints at the protocol level also risks preventing legitimate strategies from being implemented.

While the underlying protocols leave risk management to curators, some in the industry say curators are failing at that job.

“I think the curator industry is poorly designed because there’s not actual curation happening,” said Marc Zeller on X.

Resolv, Gauntlet, and Fluid did not respond to The Defiant’s requests for comments by press time.

A Recurring Failure

This is not a novel attack. In January 2025, Usual Protocol’s USD0++ was hardcoded at $1 on Morpho vaults by curator MEV Capital. Usual abruptly changed its redemption floor to $0.87 without warning, leaving lenders stuck in the MEV Caital vault as utilization spiked to 100%.

In November 2025, Stream Finance’s xUSD collapsed after curators had routed USDC deposits into leverage loops backed by the synthetic stablecoin, leaving an estimated $285M–$700M at risk across Morpho, Euler, and Silo when its oracle refused to update. Moonwell suffered back-to-back oracle failures in October and November 2025, generating more than $5 million in combined bad debt.

What It Means for the Curator Model

Morpho’s architecture outsources all risk decisions to third-party “curators” who build vaults, choose collateral, set loan-to-value ratios, and select oracles. The theory is that specialist firms have deeper expertise, competition drives better risk management, and the protocol enforces rules.

But curators earn fees on yield generated, which creates an incentive to accept riskier, higher-yield collateral, like yield-bearing stablecoins. The downside is that when those stablecoins depeg, the losses fall on depositors, not on the curator. In the Resolv case, some curators had automated bots still refilling affected vaults hours after the exploit started, deepening losses.

The reason to hardcode oracles for yield-bearing stablecoins is to prevent short-term volatility from triggering unnecessary liquidations. But that protection only works as long as the stablecoin remains stable.

Chainalysis said in a post-mortem that real-time chain detection is needed.

“The on-chain smart contract worked perfectly. The broader system design and off-chain infrastructure apparently did not,” the analytics firm said.

Bezos’ Blue Origin joins race to put AI data centers in space

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Blue Origin has entered the race to send data centers into space, with a new application to the Federal Communications Commission requesting permission to launch more than 50,000 satellites into orbit.

In the March 19 FCC filing, the space tech company, owned by Amazon founder Jeff Bezos, outlined its “Project Sunrise” initiative as a means to address mounting demand for AI compute while reducing the high water and energy needs typically seen at terrestrial sites.

The project would complement the company’s TeraWave network. Plans for this 5,408-satellite constellation were first revealed in January, pitched as a network to deliver ultra-high-speed connectivity between satellites, ground stations and customers.

“The societal benefits of AI are fundamentally constrained by the availability and affordability of the computing infrastructure that powers it,” the company said in its filing. “Space-based data centers can help break this bottleneck.”

Related:Nscale Valued at $14.6B After Raising Another $2B

According to the filing, the satellites would operate in circular “sun-synchronous” orbits at altitudes between 500 and 1,800 kilometers, enabling continuous access to solar power and removing the need for electrical grids and water-intensive cooling systems.

“The built-in efficiencies of solar-powered satellites, continuous access to solar energy, and the absence of land and grid constraints could significantly lower the marginal cost of compute compared to terrestrial alternatives,” the company added.

While the filing did not detail the scale of computing power the satellites would deliver, the project is positioned as serving the public interest by enabling scalable computing infrastructure to support “economic competitiveness, technological innovation, and broad societal benefit.”

With AI compute demands anticipated to keep rising alongside industries’ increased rollout of the tech, interest in space as the new frontier of infrastructure deployment has been on the rise in recent years.

In January, Elon Musk’s SpaceX reportedly sought FCC approval to deploy up to one million satellites to help meet accelerating AI compute demand.

Other companies, including Google, Axiom Space and Aetherflux have also expressed interest in launching their data centers into space.

Polymarket Updates Rules as Scrutiny Grows Over Prediction Markets

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Prediction platform Polymarket has updated its market integrity rules to align more closely with regulatory standards and expand its presence as a regulated trading platform amid growing scrutiny of manipulation and insider trading risks.

In a Monday announcement, the company outlined updated rules governing both its global decentralized finance platform and its US exchange, which operates under compliance oversight by the Commodity Futures Trading Commission (CFTC).

The changes come amid growing scrutiny from regulators and politicians over risks tied to insider trading, market manipulation, and the proliferation of controversial event-based contracts.

Source: Polymarket

Polymarket said the updates include stricter market design standards, clearer resolution criteria — which determine how outcomes are settled — and more defined data sources. The company said it was also enhancing monitoring and surveillance measures to detect suspicious trading activity.

In addition, Polymarket said it would limit certain types of markets, including those deemed easily manipulated or ethically sensitive.

Last week, the company said it had banned and reported users who pressured an Israeli journalist with death threats to amend a news article about an Iranian missile strike that was the subject of a $17 million prediction market.

Related: Bitcoin prediction markets see 70% chance BTC price crashes to $55K in 2026

Prediction market boom continues to draw regulatory pushback, ethics concerns

Prediction markets have surged in popularity, attracting a growing base of active traders wagering on real-world events. The momentum helped Polymarket raise $200 million in July and reportedly seek a valuation of up to $10 billion.

However, regulators remain cautious. Several US states have taken action against prediction platforms, alleging they operate as unlicensed gambling services.

Monday’s announcement came days after Major League Baseball signed a deal with Polymarket, alongside a separate agreement with the CFTC focused on so-called “integrity protections.” The arrangements signal a broader push to legitimize prediction markets through partnerships and regulatory alignment.

Source: Lirrato

Ethical concerns have also intensified. In one widely cited case, a small group of Polymarket accounts reportedly generated roughly $1 million in profits by correctly timing bets on US strikes on Iran, raising concerns about potential insider trading and market fairness.

As Bloomberg reported, all six accounts were newly created in February and had only ever wagered about whether the strikes would occur.

Magazine: Are DeFi devs liable for the illegal activity of others on their platforms?