In light of this week’s market decline, some analysts are optimistic that incorporating digital assets into US 401(k) retirement plans could release billions in new investments by the fall, potentially propelling Bitcoin to unprecedented levels.
This promising trend may elevate Bitcoin (BTC) past $200,000 before the year concludes, suggesting an influx of $122 billion in new capital with just a 1% allocation in portfolios, according to André Dragosch, head of European research at crypto asset manager Bitwise, as mentioned in a Cointelegraph report.
Corporate Bitcoin treasury purchases are also drawing new players, such as KindlyMD, a Nasdaq-listed healthcare service provider and Bitcoin treasury firm, which made its inaugural Bitcoin purchase of $679 million on Tuesday.
Meanwhile, some major investors are shifting their focus from Bitcoin to anticipate gains in Ether (ETH). Recently, a Bitcoin whale transferred $189 million worth of BTC to the Hyperliquid decentralized exchange, converting most into a $295 million perpetual future long position and a subsequent $240 million spot ETH position.
Crypto in US 401(k) retirement plans may drive Bitcoin to $200,000 in 2025
The introduction of cryptocurrency into US retirement plans could signify a breakthrough in Bitcoin adoption, unlocking billions in new capital, possibly pushing the asset above $200,000 by 2025, according to Dragosch of Bitwise.
Former President Donald Trump facilitated cryptocurrency’s inclusion in US 401(k) retirement plans by issuing an executive order on August 7, allowing Americans to invest in digital assets through their retirement accounts.
Dragosch emphasized that including crypto in 401(k) plans could be even more impactful for Bitcoin (BTC) than the anticipated approval of US spot Bitcoin exchange-traded funds (ETFs) set for January 2024.
This promising development could be “more significant than the US Bitcoin ETF approval itself,” projecting another $122 billion influx in capital with a modest 1% portfolio allocation, he stated during a Cointelegraph interview on the Chain Reaction daily X spaces show, adding a price forecast:
“The official prediction remains $200,000 by the end of the year.”
“Considering the expansive 401(K) and defined-contribution retirement plans in the US, they are substantial,” Dragosch added, noting that 1% is a “relatively conservative” estimate for the $12.2 trillion market.
The inclusion of digital assets will empower 401(k) portfolio managers to invest in Bitcoin ETFs, potentially leading Bitcoin’s price to historic highs and reinforcing Bitwise’s $200,000 target for the end of 2025.
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Kanye West YZY sniper wallet linked to $21 million LIBRA extraction scheme: Analysts
An onchain analysis by the pseudonymous analyst Dethective connected a wallet that acquired the Kanye West-themed token YZY to a different set of wallets associated with the LIBRA token, indicating that the same operator extracted tens of millions of dollars utilizing insider knowledge.
In a series of X posts on Thursday, Dethective revealed that a YZY sniper wallet managed to buy $250,000 in tokens at just $0.20, significantly lower than the price most traders paid. Within minutes, the wallet cleared over $1 million in profit, which was later moved to a treasury wallet.
The same treasury wallet had also received substantial contributions from wallets linked to LIBRA’s launch six months earlier. Two “Libra sniper” wallets extracted a total of $21 million. Altogether, nearly $23 million was extracted through the YZY and LIBRA launches, with funds subsequently shifted to Kamino or Binance.
“We can conclude this is someone with clear inside knowledge,” Dethective stated. “The evidence lies in the fact that he did not snatch any coin apart from $YZY and $LIBRA and he was prepared with a significant size,” they continued.
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Bitcoin bull and billionaire files for $250 million SPAC targeting DeFi, AI
Prominent early Bitcoin investor and billionaire Chamath Palihapitiya submitted a filing to raise $250 million through the special purpose acquisition company (SPAC) titled “American Exceptionalism Acquisition Corp A,” with a focus on decentralized finance, AI, energy, and defense sectors.
The SPAC will be led by Social Capital’s managing partner Steven Trieu as CEO and Palihapitiya as chairman, as detailed in the registration document filed with the US Securities and Exchange Commission on Monday.
The $250 million targeted raise aims to offer 25 million shares at $10 each under the ticker AEXA on the New York Stock Exchange.
Palihapitiya and Trieu are placing their bets on decentralized finance rather than Bitcoin to spearhead the next wave of financial progress, with an emphasis on integrating traditional markets with blockchain technology:
“While Mr. Palihapitiya has long championed Bitcoin as a hedge against inflation and an alternative to fiat currencies, we believe the next phase of development will see increased integration between traditional finance and decentralized finance.”
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Ex-White House crypto director Bo Hines takes Tether advisory role
Tether, the stablecoin giant, has appointed former White House Crypto Council Executive Director Bo Hines as its strategic adviser for digital assets and US strategy, indicating a commitment to expand in the world’s leading economy.
Hines has been engaged to directly oversee and coordinate Tether’s US strategy and expansion, following a Tuesday announcement shared with Cointelegraph.
During his prior role in President Donald Trump’s administration, Hines focused on strategies to promote digital asset innovation, establish regulations for stablecoin issuers, and foster partnerships between the government and the blockchain industry.
In his new capacity, Hines will collaborate with Tether’s leadership to execute its US market entry while building “constructive relationships” with policymakers and industry stakeholders.
“Bo’s profound understanding of the legislative landscape, alongside his enthusiasm for practical blockchain solutions, positions him as an invaluable resource as Tether ventures into the world’s largest market,” stated Paolo Ardoino, CEO of Tether, further adding:
“Bo’s appointment underscores our dedication to creating a robust U.S.-based presence across various sectors, beginning with digital assets while eyeing potential investments in domestic infrastructure.”
Tether Investments has already reinvested nearly $5 billion into the US economy. Hines’ inclusion is intended to fortify this commitment to the US market, as mentioned in the announcement.
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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 achieved over $500 million in cumulative revenue. Both revenue and the circulating supply of its synthetic stablecoin, Ethena USDe (USDe), have surged since July, as synthetic stablecoins occupy a larger share of the market.
Ethena Labs conveyed this milestone through a post on X, revealing that in just the past week, protocol revenue reached $13.4 million, while USDe supply achieved a record high of $11.7 billion.
“Ethena’s revenue growth has been driven by strong inflows into USDe and favorable market conditions enhancing returns from its delta-neutral hedging reserve model,” an Ethena Labs spokesperson shared with Cointelegraph. “The protocol’s positive momentum indicates rising demand for and trust in USDe as a reliable store of value.”
According to the decentralized finance analytics platform DefiLlama, Ethena USDe held the third-largest market capitalization among stablecoins at the time of this writing and topped the charts among synthetic stablecoins. Over the previous month, its market cap increased by 86.6%.
In addition to Ethena USDe, several other synthetic stablecoins are gaining traction and market share. Sky Dollar (USDS), an upgraded version of DAI (DAI), which fuels the Sky ecosystem, has experienced a 14% increase in market cap. Falcon USD (USDf), a synthetic dollar created by Falcon Finance, has seen its market cap shoot up by 89.4%.
Synthetic stablecoins possess potential benefits as well as risks. Since they lack collateralization by physical assets, transaction costs can be lower. However, there are risks of instability and depegging, which could lead to considerable losses for investors.
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DeFi market overview
Data from Cointelegraph Markets Pro and TradingView reveals that most of the 100 largest cryptocurrencies by market capitalization finished the week in the negative.
Tokens from the memecoin launch platform Pump.fun (PUMP) dropped over 22%, resulting in the greatest decline of the week, followed by the SPX6900 (SPX) token, down more than 18% over the 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 regarding this rapidly evolving sector.
