In spite of this week’s market drop, some analysts foresee that adding digital assets to US 401(k) retirement plans could unlock billions in new investments by fall, potentially propelling Bitcoin to unprecedented heights.
This optimistic shift may elevate Bitcoin (BTC) beyond $200,000 before year-end, indicating an influx of another $122 billion in new capital with a conservative 1% portfolio allocation, André Dragosch, head of European research at crypto asset management firm Bitwise, stated to Cointelegraph.
Corporate acquisitions of Bitcoin for treasury purposes continue to draw new participants, like KindlyMD, a Nasdaq-listed healthcare service provider and Bitcoin treasury firm, which made its inaugural Bitcoin investment of $679 million on Tuesday.
Other major investors are pivoting from Bitcoin to speculate on Ether (ETH) appreciation. On Thursday, a Bitcoin whale transferred $189 million worth of BTC to the Hyperliquid decentralized exchange, converting most into a $295 million perpetual futures long position and a subsequent $240 million spot ETH position.
The inclusion of crypto in US 401(k) retirement plans could elevate Bitcoin to $200,000 by 2025
Introducing cryptocurrency in US retirement plans could be a landmark for Bitcoin adoption and release billions in new capital, potentially driving the asset above $200,000 by the end of 2025, according to André Dragosch, head of European research at Bitwise.
President Donald Trump initiated cryptocurrency inclusion in US 401(k) plans by signing an executive order on August 7, allowing Americans access to digital assets in their retirement accounts.
The introduction of crypto in 401(k) plans may hold even more significance for Bitcoin (BTC) pricing than the anticipated approval of US spot Bitcoin exchange-traded funds (ETFs) in January 2024, Dragosch remarked.
This promising development could be “greater than the US Bitcoin ETF approval itself,” suggesting an additional $122 billion in new capital with a modest 1% portfolio allocation, Dragosch shared with Cointelegraph during the Chain Reaction daily X spaces show on Monday, while offering a confident price forecast:
“The official prediction remains $200,000 by the end of the year.”
“When you consider 401(k) and defined-contribution retirement plans in the US, they are substantial,” Dragosch noted, stating that 1% was a “relatively conservative” estimate for the $12.2 trillion industry.
Incorporating digital assets into retirement plans will permit 401(k) portfolio managers to invest in Bitcoin ETFs, which could drive Bitcoin’s price to new record levels, reinforcing Bitwise’s $200,000 Bitcoin price target for late 2025.
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Kanye West YZY sniper wallet linked to $21 million LIBRA extraction scheme: Analysts
An on-chain investigation by the pseudonymous analyst Dethective has connected a wallet that purchased the Kanye West-themed token YZY to a series of wallets involved with the LIBRA token, indicating the same operator extracted tens of millions using insider information.
In a series of X posts on Thursday, Dethective uncovered that a YZY sniper wallet managed to acquire $250,000 worth of tokens at a mere $0.20, significantly lower than the price most traders paid. Within minutes, the wallet gained over $1 million in profit, which was later channeled into a treasury wallet.
This same treasury wallet has also received substantial funds from wallets associated with LIBRA’s launch six months earlier. Two “Libra sniper” wallets extracted a cumulative $21 million. Overall, nearly $23 million was extracted between the YZY and LIBRA launches, with funds subsequently transferred to Kamino or Binance.
“We can confirm this is someone with clear insider information,” Dethective commented. “The evidence lies in the fact that he did not target any coins besides $YZY and $LIBRA and was prepared with substantial amounts,” they added.
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Bitcoin bull and billionaire files for $250 million SPAC targeting DeFi, AI
Early Bitcoin advocate and billionaire Chamath Palihapitiya has filed to raise $250 million through the blank-check company “American Exceptionalism Acquisition Corp A,” focusing on decentralized finance, AI, energy, and defense sectors.
The special purpose acquisition company (SPAC) will be spearheaded by Social Capital managing partner Steven Trieu as CEO and Palihapitiya as chairman, as per the registration statement submitted to the US Securities and Exchange Commission on Monday.
The $250 million initiative aims to issue 25 million shares at $10 each under the ticker AEXA on the New York Stock Exchange.
Palihapitiya and Trieu are betting on decentralized finance rather than Bitcoin to spearhead the next phase of financial innovation, targeting solutions bridging traditional markets with blockchain technology:
“While Mr. Palihapitiya has long been a supporter of Bitcoin as a hedge against inflation and an alternative to fiat currencies, we believe the forthcoming stage involves enhanced integration between traditional finance and decentralized finance.”
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Ex-White House crypto director Bo Hines takes Tether advisory role
The stablecoin powerhouse Tether has appointed former White House Crypto Council Executive Director Bo Hines as its new strategic adviser for digital assets and US strategy, indicating a desire to grow within the world’s largest economy.
Tether, the issuer of the USDt (USDT) stablecoin, selected Hines to directly engage with and manage the company’s US strategy and expansion, effective immediately, according to a Tuesday announcement shared with Cointelegraph.
Hines previously worked in President Donald Trump’s administration, where he focused on initiatives to stimulate digital asset innovation, set standards for stablecoin issuers, and foster collaboration between government and the blockchain sector.
In his new position, Hines will collaborate with Tether’s leadership to execute its entry into the US market and build “constructive relationships” with policymakers and industry executives.
Hines’ “deep understanding of the legislative landscape, coupled with his enthusiasm for practical blockchain applications, makes him an invaluable resource as Tether ventures into the world’s largest market,” said Paolo Ardoino, CEO of Tether, adding:
“Bo’s appointment signifies our commitment to establishing a strong US presence that spans various sectors, starting with digital assets and extending to new opportunities, which include a solid focus on further investments in domestic infrastructure.”
Tether Investments has already reinvested nearly $5 billion into the US economy. Hines’ involvement aims to “strengthen” this commitment and alignment with the US market, the release noted.
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Ethena crosses $500 million in cumulative revenue as synthetic stablecoins gain ground
Ethena Labs announced on Thursday that its Ethena protocol has surpassed $500 million in cumulative revenue. Revenue growth and an increasing circulating supply of its synthetic stablecoin, Ethena USDe (USDe), have surged since July as synthetic stablecoins capture more market share.
Ethena Labs shared the information via a post on X, indicating that the protocol’s revenue reached $13.4 million in the past week while the USDe supply achieved an all-time high of $11.7 billion.
“Ethena’s revenue has been bolstered by significant inflows into USDe and favorable market conditions, enhancing returns from its delta-neutral hedging reserve model,” an Ethena Labs spokesperson informed Cointelegraph. “This momentum reflects increasing demand for and trust in USDe as a value store.”
According to Decentralized Finance analytics platform DefiLlama, Ethena USDe held the third-largest market capitalization among stablecoins at the time of writing, also ranking first among synthetic stablecoins. Over the past month, Ethena USDe’s market cap has surged by 86.6%.
Alongside Ethena USDe, other synthetic stablecoins are also gaining traction and market share. Sky Dollar (USDS), which powers the Sky ecosystem and serves as an upgraded version of DAI (DAI), has experienced a 14% increase in market cap. Falcon USD (USDf), a synthetic dollar created by Falcon Finance, has seen its market cap rise by 89.4%.
Synthetic stablecoins present both benefits and risks. As they are not collateralized by physical assets, they may incur lower transaction costs. However, there is also the risk of instability and depegging, which can lead to significant losses for investors.
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DeFi market overview
As per data from Cointelegraph Markets Pro and TradingView, most of the top 100 cryptocurrencies by market capitalization concluded the week on a downturn.
The memecoin launch platform Pump.fun’s (PUMP) token plummeted over 22%, marking the biggest decline of the week, followed closely by the SPX6900 (SPX) token, which fell more than 18% over the last week.
Thank you for reading our summary of this week’s most significant DeFi developments. Join us next Friday for more stories, insights, and education about this rapidly evolving field.
