Amid this week’s market decline, some analysts foresee that incorporating digital assets into US 401(k) retirement plans could unleash billions of dollars in new investments by autumn, potentially propelling Bitcoin to unprecedented levels.
This optimistic outlook might elevate Bitcoin (BTC) above $200,000 before the year’s end, suggesting an influx of another $122 billion in new funds with a modest 1% portfolio allocation, according to André Dragosch, head of European research at crypto asset manager Bitwise, as stated to Cointelegraph.
Corporations continue to engage in Bitcoin treasury acquisitions, welcoming new players such as KindlyMD, a Nasdaq-listed healthcare service provider and Bitcoin treasury firm, which made a significant first investment of $679 million on Tuesday.
Numerous major investors are shifting their focus from Bitcoin to speculate on Ether (ETH) price growth. On Thursday, a Bitcoin whale moved $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.
Inclusion of Crypto in US 401(k) Retirement Plans May Propel Bitcoin to $200,000 by 2025
The potential incorporation of cryptocurrency into US retirement plans could signify a pivotal moment for Bitcoin’s adoption, unlocking billions of dollars in fresh capital that could drive the asset above $200,000 by the close of 2025, per André Dragosch, head of European research at Bitwise.
President Donald Trump facilitated the way for cryptocurrency inclusion in US 401(k) retirement plans by signing an executive order on August 7, allowing Americans access to digital assets through their retirement savings.
The impact of crypto inclusion in 401(k) plans may surpass that of the anticipated approval of US spot Bitcoin exchange-traded funds (ETFs) in January 2024, Dragosch noted.
This positive trend could prove “more significant than the US Bitcoin ETF approval itself,” indicating an additional $122 billion in new investments with a conservative 1% portfolio allocation, Dragosch shared during the Chain Reaction daily X spaces show on Monday, rounding off his insights with a price forecast:
“The official prediction remains $200,000 by the end of the year.”
“If you examine 401(K) and defined-contribution retirement plans in the US, their scale is immense,” Dragosch remarked, stating that 1% is a “relatively modest” allocation projection for the $12.2 trillion sector.
By including digital assets, 401(k) portfolio managers can invest in Bitcoin ETFs, which may drive Bitcoin’s price to new historic peaks, further supporting Bitwise’s target of $200,000 for Bitcoin by the end of 2025.
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Kanye West YZY Sniper Wallet Connected to $21 Million LIBRA Extraction Scheme: Analysts
An on-chain investigation by the pseudonymous analyst Dethective has linked a wallet that acquired the Kanye West-themed token YZY to other wallets associated with the LIBRA token, implying the same operator extracted tens of millions of dollars through insider knowledge.
In a series of X posts on Thursday, Dethective disclosed that a YZY sniper wallet managed to acquire $250,000 worth of tokens at a mere $0.20, significantly lower than the majority of traders’ purchase prices. Within moments, the wallet secured over $1 million in profit, which was subsequently funneled into a treasury wallet.
This same treasury wallet had also received substantial amounts from wallets linked to LIBRA’s launch six months prior. Two “Libra sniper” wallets collectively extracted $21 million. Altogether, nearly $23 million was extracted during the YZY and LIBRA launches, with most funds later redirected to Kamino or Binance.
“We can be certain this is someone with clear inside information,” Dethective stated. “The proof lies in the fact that they only sniped $YZY and $LIBRA and were prepared with significant size,” they added.
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Bitcoin Bull and Billionaire Files for $250 Million SPAC Targeting DeFi, AI
Early Bitcoin investor and billionaire Chamath Palihapitiya has filed to raise $250 million through a blank-check company called “American Exceptionalism Acquisition Corp A,” aiming to target the decentralized finance, AI, energy, and defense sectors.
The special purpose acquisition company (SPAC) will be led by Social Capital managing partner Steven Trieu as CEO alongside Palihapitiya as chairman, according to the registration statement submitted to the US Securities and Exchange Commission on Monday.
The endeavor aims to offer 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 financial revolution, focusing on solutions that connect traditional markets with blockchain technology:
“While Mr. Palihapitiya has long supported Bitcoin as an inflation safeguard and alternative to fiat currencies, we believe the next phase will involve the deeper integration of traditional finance and decentralized finance.”
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Former White House Crypto Director Bo Hines Takes Advisory Role at Tether
Stablecoin giant Tether has appointed former White House Crypto Council Executive Director Bo Hines as its new strategic adviser for digital assets and US strategy, marking a bid to expand within the world’s largest economy.
Tether, the issuer of the USDt (USDT) stablecoin, announced Hines’s appointment to engage directly with the company’s US strategy and expansion, all part of its key focus, effective immediately, as per a Tuesday announcement shared with Cointelegraph.
Hines previously served in President Donald Trump’s administration, where he contributed to initiatives aimed at fostering digital asset innovation, establishing regulations for stablecoin issuers, and enhancing collaboration between the government and blockchain sector.
In his new role, Hines will collaborate with Tether’s leadership to execute its entry into the US market and build “constructive relationships” with policymakers and industry stakeholders.
Hines’ “extensive knowledge of the legislative process, coupled with his enthusiasm for practical blockchain adoption, makes him an invaluable asset as Tether approaches the largest market in the world,” remarked Paolo Ardoino, CEO of Tether, adding:
“Bo’s hiring demonstrates our commitment to establishing a robust U.S.-based presence that spans various sectors, initially focusing on digital assets while exploring new opportunities, including a significant emphasis on potential further investments in domestic infrastructure.”
Tether Investments has already reinvested approximately $5 billion into the US economy. Hines’ recruitment aims to “reinforce” this commitment to the US market, as stated in the announcement.
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Ethena Surpasses $500 Million in Cumulative Revenue as Synthetic Stablecoins Gain Popularity
On Thursday, Ethena Labs announced that its Ethena protocol has surpassed $500 million in cumulative revenue. Growth in both revenue and the circulating supply of its synthetic stablecoin, Ethena USDe (USDe), has accelerated since July as synthetic stablecoins capture more market share.
Ethena Labs revealed this milestone via a post on X, noting that in the past week, protocol revenue reached $13.4 million, and USDe supply achieved an all-time high of $11.7 billion.
“Ethena’s revenue growth has been driven by strong inflows into USDe and favorable market conditions that have enhanced returns from its delta-neutral hedging reserve model,” a spokesperson from Ethena Labs shared with Cointelegraph. “The protocol’s momentum reflects increasing demand for and trust in USDe as a value store.”
According to decentralized finance analytics platform DefiLlama, Ethena USDe holds the third-largest market capitalization among all stablecoins at the time of writing, and the largest market cap among synthetic stablecoins. Over the past month, Ethena USDe’s market cap surged by 86.6%.
In addition to Ethena USDe, other synthetic stablecoins are also experiencing growth and gaining market share. Sky Dollar (USDS), which is integral to the Sky ecosystem and is an upgraded version of DAI (DAI), has witnessed a 14% boost in market cap. Falcon USD (USDf), a synthetic dollar developed by Falcon Finance, has seen its market cap soar by 89.4%.
Synthetic stablecoins offer both advantages and risks. Because they are not backed by tangible assets, they may incur lower transaction costs. However, they also present risks of instability and potential depegging, which could lead to significant losses for investors.
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DeFi Market Overview
According to data from Cointelegraph Markets Pro and TradingView, most of the top 100 cryptocurrencies by market capitalization concluded the week in negative territory.
The memecoin launch platform Pump.fun’s (PUMP) token plummeted over 22%, marking the most significant decline for the week, followed by the SPX6900 (SPX) token, which fell over 18% during the same period.
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 space.
