Despite the recent market decline, some analysts believe that adding digital assets to US 401(k) retirement plans could unleash billions in new investments by autumn, potentially propelling Bitcoin to unprecedented levels.
This optimistic trend could see Bitcoin (BTC) surpassing $200,000 by year’s end, indicating an additional $122 billion influx of capital, based on a conservative 1% allocation of portfolios, as shared by André Dragosch, head of European research at crypto asset manager Bitwise, in a conversation with Cointelegraph.
Corporate interest in Bitcoin treasury acquisitions is also growing, exemplified by KindlyMD, a Nasdaq-listed healthcare provider and Bitcoin treasury firm that made its inaugural investment of $679 million on Tuesday.
Meanwhile, some major investors are shifting focus from Bitcoin to capitalize on Ether (ETH) price growth. On Thursday, a Bitcoin whale transferred $189 million in BTC to the Hyperliquid decentralized exchange and converted a significant portion into a $295 million perpetual futures long position and a subsequent $240 million spot ETH position.
Crypto in US 401(k) retirement plans could push Bitcoin towards $200,000 by 2025
Integrating cryptocurrency into US retirement plans may signal a significant milestone for Bitcoin adoption and open the door to billions of dollars in new capital, potentially driving its value above $200,000 by the end of 2025, according to André Dragosch from Bitwise.
Former President Donald Trump set the stage for incorporating cryptocurrency into US 401(k) plans with an executive order signed on August 7, allowing Americans to access digital assets through their retirement accounts.
This integration of crypto into 401(k) plans could prove even more impactful for Bitcoin price than the anticipated approval of US spot Bitcoin exchange-traded funds (ETFs) in January 2024, as per Dragosch’s comments.
This favorable development might surpass the significance of the US Bitcoin ETF approval itself, projecting another $122 billion capital influx based on a 1% portfolio allocation, Dragosch noted during the Chain Reaction daily X spaces show on Monday, confidently asserting:
“The official forecast remains $200,000 by year-end.”
“When considering 401(K) and defined-contribution retirement plans in the US, the scale is tremendous,” Dragosch observed, indicating that a 1% allocation is a “relatively conservative” estimate for the $12.2 trillion industry.
Incorporating digital assets into retirement plans will allow 401(k) fund managers to venture into Bitcoin ETFs, potentially driving Bitcoin’s value to new all-time highs, presenting further encouragement for Bitwise’s $200,000 Bitcoin price goal for the end of 2025.
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Kanye West YZY sniper wallet tied to $21 million LIBRA extraction scheme: Analysts
An on-chain analysis by the anonymous expert Dethective has connected a wallet that acquired the Kanye West-themed token YZY to a group of wallets associated with the LIBRA token, suggesting that the same entity extracted tens of millions using insider information.
Through several X posts on Thursday, Dethective disclosed that a YZY sniper wallet managed to secure $250,000 worth of tokens at merely $0.20, significantly lower than the price most traders paid. Within minutes, the wallet netted over $1 million in profits, which were later transferred into a treasury wallet.
This same treasury wallet had also received large amounts from wallets linked to LIBRA’s launch six months earlier. Two “Libra sniper” wallets managed to extract a total of $21 million. In total, nearly $23 million was drawn from both YZY and LIBRA launches, with funds later moved to Kamino or Binance.
“We can confirm this individual had clear insider knowledge,” Dethective remarked. “The evidence lies in the fact that they did not snipe any coins other than $YZY and $LIBRA and came prepared with substantial sums,” the expert added.
Sleuth links YZY sniper wallet to Libra. Source: Dethective
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Bitcoin bull and billionaire applies for $250 million SPAC aimed at DeFi, AI
Early Bitcoin investor and billionaire Chamath Palihapitiya has filed to raise $250 million for a blank-check company named “American Exceptionalism Acquisition Corp A,” focusing on the 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, according to 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 lead the next wave of financial innovation, concentrating on solutions that connect traditional markets with blockchain technology:
“While Mr. Palihapitiya has always supported Bitcoin as an inflation hedge and alternative to fiat, we believe the next phase is the enhanced integration between traditional finance and decentralized finance.”
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Former White House crypto director Bo Hines joins Tether advisory team
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 move to expand within the world’s largest economy.
The issuer of the USDt (USDT) stablecoin brought Hines on board to directly interact and coordinate the company’s US strategy and growth in line with its core focus, effective immediately, as announced on Tuesday to Cointelegraph.
Hines previously worked in President Donald Trump’s administration, focusing on initiatives to enhance digital asset innovation, establish guidelines for stablecoin issuers, and cultivate collaboration between the government and the blockchain sector.
In his new role, Hines will collaborate with Tether’s leadership team to implement its US market entry and develop “constructive relationships” with policymakers and industry participants.
Hines’ “profound understanding of the legislative landscape, coupled with his enthusiasm for practical blockchain implementation, positions him as a crucial asset as Tether enters the world’s largest market,” noted Paolo Ardoino, CEO of Tether, adding:
“Bo’s appointment illustrates our commitment to establishing a robust US-based presence that spans various sectors, starting with digital assets and expanding to new prospects, including significant 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, as highlighted in the announcement.
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Ethena surpasses $500 million in cumulative revenue as synthetic stablecoins rise
Ethena Labs announced on Thursday that its Ethena protocol has reached over $500 million in cumulative revenue. Both revenue growth and the circulating supply of its synthetic stablecoin, Ethena USDe (USDe), have accelerated since July as synthetic stablecoins capture market share.
Ethena Labs shared this update via a post on X, mentioning that last week, protocol revenue hit $13.4 million and USDe supply reached an all-time peak of $11.7 billion.
Source: Ethena Labs
“Ethena’s revenue growth has been fueled by substantial inflows into USDe and favorable market conditions enhancing returns from its delta-neutral hedging reserve model,” said an Ethena Labs representative to Cointelegraph. “The protocol’s momentum reflects increasing demand for and trust in USDe as a store of value.”
According to decentralized finance analytics platform DefiLlama, Ethena USDe held the third-largest market capitalization among stablecoins at the time of this writing. It also held the highest market capitalization among synthetic stablecoins. In the past month, Ethena USDe’s market cap has surged by 86.6%.
Along with Ethena USDe, other synthetic stablecoins are also gaining traction and market presence. Sky Dollar (USDS), which supports the Sky ecosystem and is an enhanced version of DAI (DAI), has seen a 14% rise in market cap. Falcon USD (USDf), a synthetic dollar developed by Falcon Finance, has experienced an 89.4% market cap increase.
Synthetic stablecoins come with both advantages and risks. Since they are not backed by physical assets, they may entail lower transaction costs. However, there are also dangers of instability and depegging, which could lead to considerable investor losses.
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DeFi market snapshot
According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market cap finished the week in negative territory.
The PUMP token from the memecoin launch platform Pump.fun fell over 22%, marking the steepest decline of the week, followed closely by the SPX6900 (SPX) token, which dropped over 18% over the past week.
Total value locked in DeFi. Source: DefiLlama
Thank you for reading our recap of this week’s most significant DeFi updates. Join us next Friday for more stories, insights, and education on this rapidly evolving sector.
