Connect with us
DAPA Banner
DAPA Coin
DAPA
COIN PAYMENT ASSET
PRIVACY · BLOCKDAG · HOMOMORPHIC ENCRYPTION · RUST
ElGamal Encrypted MINE DAPA
🚫 GENESIS SOLD OUT
DAPAPAY COMING

Crypto World

Friday’s Market Meltdown: What Sent Bitcoin, Gold, and Wall Street Tumbling?

Published

on

Friday was a brutal day for essentially all financial markets, even though the only notable news that went live was positive, as the US saw the strongest jobs report in a year and a half.

The analysts at the Kobeissi Letter tried to simplify what transpired and explain why markets reacted in such a painful manner.

What Exactly Happened?

If you are reading this, you are probably aware of what took place in the crypto markets. Bitcoin plunged to $59,100 for the first time since November 2024, dragging the entire altcoin field with it and triggering over $1.7 billion in liquidations at one point. But, the crash was not just in crypto.

Gold, traditionally regarded as a safe-haven tool known for its stability, dumped by over 4% in a day from more than $4,500 to $4,315. Wall Street experienced a similar decline, with the S&P 500 erasing $2 trillion from its market cap in a single trading session. The Nasdaq 100 printed seven consecutive hourly red candles during the day in what became its worst drop since Trump’s so-called “Liberation Day” from over a year ago.

Advertisement

And most of those losses took place after the US jobs report went live, which was highly promising – the strongest in 18 months. This financial crash, then, appears puzzling, and even the POTUS himself seemed confused by this situation.

US President Trump on Truth Social
US President Trump on Truth Social

So Why Down Then?

However, such good news does not appear to be beneficial to BTC and other risk-on assets, according to some analysts.

“Strong jobs data kills the rate cut narrative. Bitcoin, already down 15% and sitting on uncleared leveraged longs, has no macro catalyst to recover into, and Middle East tensions are keeping risk appetite soft across markets,” told us the analysts from Nansen.

Their colleagues at the Kobeissi Letter concurred, indicating that when the Fed made its first rate cuts of 2025, it was “specifically because of labor market weakness,” not because the inflation had reached or even neared the 2% target.

With inflation skyrocketing again due to the war against Iran, the bond market has held on to “hopes of rate cuts for some time because of the “weak” labor market.” The jobs report from Friday, though, has “flipped that sentiment, and the weakness of the labor market is being questioned.”

Additionally, the report showed that job openings rose by over 730,000 positions in April, while experts anticipated no change. Available employment jumped to 7.6 million for the month, the highest in two years.

Advertisement

The result of all of the above means that markets have seen the “most hawkish shift in Fed expectations since post-pandemic stimulus.” Experts now believe there will be rate hikes by early 2026, while the overall expectations until months ago suggested up to 4 cuts.

Separately, reports claimed recently that Meta is considering raising “tens of billions of dollars” through a stock offering to fund AI development, similar to Google’s $85 billion raise. Such moves increase investor concerns as big tech could start flooding the market with equity raises to fund AI growth.

SpaceX’s IPO, scheduled for June 12, could also be among the culprits, as “funds are likely selling to make room” for this major event.

“Sum it all up, and the market, which was up 20%+ in 2 months, was overdue for today’s decline,” concluded the analysts.

The post Friday’s Market Meltdown: What Sent Bitcoin, Gold, and Wall Street Tumbling? appeared first on CryptoPotato.

Advertisement

Source link

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Crypto World

MicroStrategy CEO Sells $11 Million Worth of Shares

Published

on

Bitcoin Price Performance

Michael Saylor doubled down on his Bitcoin conviction today, but while he did that, his MicroStrategy CEO, Phong Le, sold roughly $11.1 million in company stock tied to the same exposure.

The timing drew attention across crypto markets. Saylor frames Bitcoin as the premier long-term asset, yet the executive running his company trimmed shares that give investors leveraged exposure to that same bet.

Michael Saylor’s Conviction Meets an Inconvenient Sale

Saylor posted his message as Bitcoin hovered just above the $60,000 threshold, only hours after a brief break below that critical psychological level for the first time in years.

Bitcoin Price Performance
Bitcoin Price Performance. Source: BeInCrypto

He argued the AI capital boom validates Bitcoin rather than threatening it.

“The AI buildout is absorbing capital at historic scale, creating temporary pressure across global markets. That does not weaken Bitcoin. It strengthens the case for scarce, liquid, digital capital. Bitcoin remains the premier asset for the long term,” Saylor explained.

Follow us on X to get the latest news as it happens 

Advertisement

It comes amid market uncertainty as the pioneer crypto continues to show weakness. Some associate that weakness with the latest MicroStrategy BTC sale, a move seen as a symbolic crack in the “never sell” fortress.

In some ways, it eroded faith in MicroStrategy as pure BTC proxy.

To worsen the matter, a regulatory filing shows that on June 5, Le filed to sell 93,738 MicroStrategy (MSTR) shares at a weighted average near $118.73. The proceeds came to about $11.1 million.

It is imperative to note that the sale may not necessarily be a bearish call.

It covered the tax bill on 190,740 performance stock units that vested on June 3. Le still holds 119,925 Strategy shares. Notwithstanding, the timing raises concerns.

“Not a good time to do this,” analyst Ted Pillows remarked.

Why the Optics Sting

The vesting itself sharpens the irony. Those units paid out at 200% because Strategy’s three-year total return ranked in the top quartile of the Nasdaq Composite. The reward for years of outperformance landed in the worst week of the year.

MicroStrategy trades as a leveraged Bitcoin proxy. Investors buy it for the firm’s huge BTC treasury and Saylor’s refusal to sell.

Advertisement

The sales ran through a Rule 10b5-1 plan set in May 2024, so the timing was automatic rather than chosen.

Even so, the company recently made a dividend-driven Bitcoin sale of 32 BTC, its first since 2022.

Critics have long warned about a MicroStrategy problem for Bitcoin, and the move reopened the maximalism debate among holders.

The Bitcoin price showing weakness heading into this weekend leaves Saylor’s long-term thesis and his CEO’s tax bill colliding in public view.

Advertisement

The post MicroStrategy CEO Sells $11 Million Worth of Shares appeared first on BeInCrypto.

Source link

Advertisement
Continue Reading

Crypto World

Why Cardano’s social activity surges as ADA crashes

Published

on

Why Cardano's social activity surges as ADA crashes

Here is a pattern that should not make intuitive sense. Cardano’s ADA token has collapsed to four-year lows below $0.20, down more than 90% from its 2021 peak, in one of the worst stretches the ecosystem has ever faced.

Summary

  • Cardano’s ADA has fallen to multi-year lows below $0.20, while active addresses reached a four-month high and social dominance climbed near its 2026 peak.
  • Santiment data shows network activity and social engagement increased during the selloff, highlighting a rare divergence between price action and user attention.
  • The surge in activity could reflect either accumulation by long-term holders or heightened selling and speculation as the ecosystem faces governance and development challenges.

Its founder warned of a coming “wave of failures,” a respected developer firm shut down, the community voted against funding its own flagship conference, and Charles Hoskinson announced he was taking a break. And yet, while the price cratered, Cardano’s social activity did the opposite of what you would expect.

According to on-chain analytics firm Santiment, ADA’s active addresses hit a four-month high and its social dominance, the share of crypto conversation devoted to it, climbed near its 2026 peak precisely as the price hit bottom.

Advertisement

More people are talking about Cardano and using its network at the exact moment its token is worth the least in years. This divergence between collapsing price and surging attention is one of the more interesting signals in crypto right now, because it could mean two completely opposite things.

This piece explains what the data shows, why it happens, and how to tell whether it is a bottom signal or a warning.

The divergence, precisely stated

Start with exactly what the data shows, because the specifics matter for interpreting it.

Advertisement

On the price side, the collapse is severe and well-documented. Cardano (ADA) price fell below $0.20 to its lowest level in over five years, down roughly 90% or more from its 2021 all-time high near $3.09. The drop accelerated through a brutal market-wide selloff and a cascade of Cardano-specific bad news: the shutdown of the analytics firm TapTools, Hoskinson’s public warning of a “wave of failures” in the ecosystem, the community’s vote against funding the 2026 Cardano Summit, and the founder stepping back with a terse message that he was taking a break.

On the attention side, the numbers ran the other way. Santiment data showed Cardano’s active addresses climbing to a four-month high even as the price fell, meaning more distinct wallets were transacting on the network during the crash than in the preceding months. At the same time, ADA’s social dominance, a measure of how much of the total crypto conversation across social platforms is about a given asset, rose to near its peak for 2026. So on two independent measures, on-chain usage and social chatter, Cardano activity surged while its token cratered.

This is the divergence, and it is worth being precise about why it is strange. Normally, price and attention move together. Rising prices generate excitement, which drives social chatter and draws users onto the network; falling prices generate silence as people lose interest and drift away. The intuitive expectation during a 90% founder-is-taking-a-break collapse would be declining engagement, fewer active addresses, and fading social presence. Cardano did the opposite. Understanding why requires looking at what actually drives social activity, and the answer is that attention is not the same as optimism.

Advertisement

Why attention spikes when price crashes

The counterintuitive truth is that dramatic price crashes often generate more social activity than steady rallies, and the reasons are rooted in how people behave around money and drama.

The first driver is simply that crises are interesting. A token quietly grinding higher generates contentment, and contentment is quiet. A token collapsing to four-year lows while its founder warns of ecosystem failures and walks away generates argument, anxiety, blame, and analysis, and all of that is loud. The Cardano story in early June had everything that drives engagement: a dramatic price move, a charismatic and polarizing founder behaving unusually, an existential debate about the project’s future, and a community split between defenders and critics. Drama drives clicks and posts in a way that calm never does. Social dominance measures volume of conversation, not sentiment, so a flood of worried, angry, and argumentative posts pushes the metric up just as effectively as celebration would.

The second driver is the active-address spike, which has its own logic. When a token crashes hard, on-chain activity often increases instead of falling, because crashes force action. Holders move tokens to exchanges to sell. Bargain hunters open positions to buy the dip. Liquidations and margin calls trigger forced transactions. Long-term holders reshuffle. Panic and opportunism both produce on-chain transactions, so a four-month high in active addresses during a crash does not necessarily mean a wave of new believers arriving. It can equally mean a wave of existing holders capitulating, traders speculating on the bottom, and capital changing hands at high speed. The metric counts activity, not conviction.

The third driver is specific to Cardano’s situation: the community itself is famously large, devoted, and vocal. Cardano has one of the most committed retail followings in crypto, and a crisis mobilizes that community rather than silencing it. Defenders rally to argue the technology is sound, and the sell-off is overdone. Critics seize the moment to say they were right all along. The governance fight over the treasury and the canceled summit gave that community concrete things to argue about. A devoted base under attack generates more conversation, not less, which is why an embattled Cardano can dominate social feeds even as its token dominates the loss leaderboards.

Advertisement

So the divergence resolves once you separate attention from approval. Surging social activity during a crash is not evidence that people are bullish. It is evidence that people are engaged, and engagement during a collapse is driven as much by fear, anger, and opportunism as by faith. The question that actually matters is which of those is dominant, and that is where the interpretation splits.

The bullish reading

There is a genuine case that the activity surge is a positive signal, and it rests on a well-known piece of market psychology.

The contrarian principle holds that market bottoms tend to form at the point of maximum pessimism, when sentiment is worst, and capitulation is heaviest. In this framing, the surge in active addresses and social dominance during the crash is exactly what a bottom looks like. The four-month high in active addresses could reflect bargain hunters and long-term believers stepping in to accumulate at four-year lows, quietly buying what panicked sellers are dumping. The spike in social dominance could reflect the kind of peak attention that often coincides with capitulation, the moment when everyone is talking about how bad it is, which historically is closer to the bottom than the top.

There is supporting logic in the on-chain behavior. When active addresses rise during a price crash, one interpretation is accumulation: strong hands taking advantage of weak hands, moving coins from sellers who have given up to buyers positioning for a recovery. If that is what is happening on Cardano, then the activity surge is the footprint of smart money entering, and the crash is transferring ADA from short-term holders to long-term ones, the classic precondition for a base to form. The devoted community, in this reading, is not just talking; it is buying, and the elevated engagement is the sound of conviction being tested and held.

Advertisement

The bullish case also points to the fundamentals that have not changed. Cardano’s underlying technology, its peer-reviewed development approach, and its roadmap items like the Midnight privacy project and Hydra scaling did not break during the crash. If the activity surge reflects a community that is mobilizing to support the ecosystem through its hardest moment, and if that translates into resolving the treasury fight and funding development, then the crash could mark the bottom of a confidence trough that the network climbs out of. Maximum pessimism, maximum attention, capitulation selling, and accumulating believers: assemble those, and you have a plausible bottom.

The bearish reading

The opposite interpretation is equally coherent, and it is the one the broader context arguably supports more.

In the bearish framing, the activity surge is not accumulation but distribution and panic. The four-month high in active addresses is holders rushing to exit, moving ADA to exchanges to sell before it falls further, plus traders piling into short positions and liquidations forcing transactions. On this reading, the elevated on-chain activity is the footprint of people leaving, not arriving, and the social dominance spike is fear and recrimination, not engaged optimism. A community arguing bitterly about whether the project is dying is generating enormous social volume, but the content of that conversation is anxiety, not conviction.

The context strengthens this reading. This is not a crash happening against a healthy backdrop where contrarian accumulation makes obvious sense. It is a crash accompanied by genuine structural problems: a founder publicly warning of a “wave of failures,” a real developer firm actually shutting down, a governance deadlock preventing the ecosystem from deploying its own treasury to defend itself, and the founder stepping away at the worst moment. When the attention surge coincides with deteriorating fundamentals rather than just a price dip, the “maximum pessimism equals bottom” logic gets shakier, because the pessimism might be justified. Maximum pessimism only marks a bottom if the pessimism is overdone. If the ecosystem really is contracting, then close attention during the decline is just a crowd watching a slow-motion problem unfold.

Advertisement

The social-dominance metric carries a specific trap here. High social dominance during a crash can mark an extreme local sentiment that precedes a bounce, but it can also reflect a token becoming the market’s designated cautionary tale, the name everyone points to as the example of what is going wrong. A surge in conversation driven by “look how badly Cardano is doing” is bearish attention, the kind that accompanies continued decline, not recovery. Without knowing the sentiment behind the volume, the raw dominance figure is as consistent with a token being publicly written off as with one being quietly accumulated.

How to tell which one it is

Since the same data supports both readings, the practical question is what additional evidence would distinguish them, and there are specific things to watch.

The first is the composition of the on-chain activity. Active addresses rising is ambiguous, but the direction of token flows is not. If exchange inflows dominate, ADA moving onto exchanges, that points to selling and the bearish distribution reading. If accumulation by long-term holder wallets dominates, with coins moving into addresses that historically hold rather than trade, that supports the bullish accumulation reading. The headline active-address number cannot tell you which, but deeper on-chain analysis of where the tokens are going can.

The second is whether the social sentiment is fear or conviction. Social dominance measures volume, but sentiment analysis measures tone. If the surge in conversation is dominated by capitulation, panic, and “I’m out” posts, that is a bearish sign that often accompanies further downside. If it is dominated by accumulation talk, defense of the fundamentals, and long-term conviction, that is more consistent with a bottom. The volume tells you Cardano is being discussed; only the tone tells you whether the discussion is people leaving or people doubling down.

Advertisement

The third, and most decisive, is whether the underlying problems get resolved. The activity surge is a sentiment signal; the fundamentals are the substance. If the Cardano community uses this moment of peak attention to break the treasury-funding deadlock, support developers, and stop the “wave of failures,” then the engagement was productive, and the crash can mark a turning point. If the deadlock holds, more firms follow TapTools out the door, and Hoskinson’s break extends, then the attention was just a crowd witnessing a decline, and the bearish reading wins. The social and on-chain metrics are the symptoms. The governance and development response is the disease, and watching the response matters more than watching the metrics.

The honest synthesis is that surging activity during a crash is a real and meaningful signal, but it is a question, not an answer. It tells you Cardano is at a moment of maximum attention and maximum action, which is exactly where bottoms can form, but only if the attention reflects accumulation and the underlying problems resolve. Right now, the data is consistent with both a community capitulating and a community mobilizing, and the broader context of genuine structural trouble tilts the odds toward caution. The activity surge means Cardano’s fate is being decided in real time, with everyone watching. It does not tell you which way the decision goes. For that, watch the token flows, the sentiment behind the chatter, and above all, whether the ecosystem fixes what is actually broken 

This article is for informational purposes and does not constitute financial or investment
advice. Cryptocurrency markets are highly volatile. The figures and analysis described
reflect data available as of June 5, 2026. Always do your own research and consult with
qualified financial professionals before making investment decisions

Advertisement

Source link

Continue Reading

Crypto World

Here’s How Much BTC, ETH, XRP Have Dumped Since ‘Crypto President’ Trump Took Office

Published

on

It’s safe to say that the cryptocurrency market has seen better days. In fact, such days were promised by the current US President, Donald Trump.

And, for some time, they were here. Now, though, we are far behind, with the prices of almost all digital assets trading below his inauguration day and even lower than the pre-election weeks.

Trump’s Major Promises

Remember 2024? It was a highly eventful year, especially when it came down to the presidential election. On one hand, we had Kamala Harris, who was expected to continue many of Joe Biden’s policies, including those against the cryptocurrency industry.

On the other hand, we had Donald Trump. Although his history with bitcoin and co was not very pleasant from his first time in office, he tried to make amends and started praising the asset class. Moreover, he started calling himself the ‘crypto president,’ and attended the largest Bitcoin conference in the US, where he had a passionate speech about BTC and how he would personally fire then-SEC Chair Gary Gensler (even though he can’t really).

Advertisement

Hell, he even paid for a burger in New York with bitcoin. In addition, he made multiple grand promises about how the US will become the global hub for the industry, that all remaining bitcoin should be mined in the States, and that there will be a national BTC strategy reserve.

The community was quickly sold, as they hadn’t seen anything like this in the past. They were used to ignorance or hatred from the White House. Consequently, prominent names from the industry started throwing funds toward his campaign in the hope of a better future for us all.

Reality Check: 18 Months Later

Given his promises, the entire market skyrocketed in the months after Trump’s landslide victory in the elections. The hype was real, but so were the price pumps. Then came the highly controversial launch of two meme coins linked to him and his wife, but we won’t even go down that rabbit hole here. We are only going to mention that they launched just days before his inauguration.

Prices kept pumping, for the most part, excluding the ‘Liberation Day’ fiasco and the mid-year drop, but BTC, ETH, XRP, and many other alts still managed to post new ATHs by October. Things were looking up.

Advertisement

And then it all went down the crapper. The single-largest liquidation day in early October was just the beginning, as BTC kept dropping. Long story short, bitcoin plunged to $59,000 on Friday, which was its lowest position since before the elections. Most crypto assets have done the same, in a more painful manner.

But the numbers since the inauguration – the date that the so-called ‘crypto president’ officially returned to the White House, where he was supposed to fulfill his many promises – are even worse, as the tweet below will show.

The post Here’s How Much BTC, ETH, XRP Have Dumped Since ‘Crypto President’ Trump Took Office appeared first on CryptoPotato.

Source link

Continue Reading

Crypto World

Bhutan Bitcoin Transfers Add Pressure as BTC Faces Key Support Test

Published

on

Crypto Breaking News

Fresh on-chain activity from Bhutan-linked Bitcoin wallets has added pressure to an already weak crypto market. Several large Bitcoin transfers emerged within a single day, while analysts projected deeper downside risks. Meanwhile, Bitcoin continued trading near critical support levels after recent macroeconomic developments triggered renewed selling pressure.

Bhutan Government-Linked Wallets Move Over $67 Million in Bitcoin

Blockchain tracking data showed multiple Bitcoin transfers from wallets linked to Bhutan on Saturday. The transactions totaled more than 1,095 BTC and exceeded $67 million in value. The transfers attracted attention during a period of heightened market volatility.

The largest transfer involved nearly 365 BTC, valued at approximately $22.26 million. Other notable transactions included 188 BTC and 150 BTC, worth over $20 million combined. Several smaller transfers ranged from 1 BTC to more than 100 BTC.

The cumulative value of the identified transactions surpassed $67 million at current prices. Blockchain records indicated a series of staggered transfers throughout the day, and market participants linked the activity to broader concerns about Bitcoin supply pressure.

Advertisement

Background data from Arkham Intelligence indicated that Bhutan previously reduced substantial Bitcoin holdings. The country accumulated large reserves through state-backed mining operations over recent years, though officials have disputed reports suggesting direct Bitcoin sales.

The latest transfers arrived during a period of uncertainty across digital asset markets. Traders also responded to macroeconomic concerns and shifting risk sentiment, so the transactions received additional attention despite limited official clarification.

Bitcoin remained under pressure following recent weakness across major cryptocurrencies. Selling activity increased after economic data affected expectations for monetary policy, and large wallet movements added another factor influencing market sentiment.

Bitcoin Holds Above $60,000 as Downside Targets Emerge

Bitcoin experienced renewed volatility after falling sharply during recent trading sessions. The asset dropped to nearly $59,100 before recovering above the $61,000 level, but the recovery remained limited as bearish sentiment persisted.

Advertisement

Market analysts pointed to weakening momentum indicators on higher timeframes. Several technical signals suggested that selling pressure remained elevated, and traders focused on whether Bitcoin could maintain support above $60,000.

The daily Relative Strength Index reached levels not seen since previous major market declines. Broader market conditions continued to reflect risk-off behavior among participants, leading analysts to maintain cautious near-term price expectations.

Technical projections identified $55,000 as a major support zone below current levels. Additional support areas appeared between $50,000 and $54,000 if weakness persists, and many forecasts highlighted those levels as possible downside targets.

Prediction markets reflected growing expectations of further price declines, with market probabilities indicating a strong chance of a move toward $55,000. Traders continued evaluating economic conditions and liquidity trends.

Advertisement

Bitcoin remained above the important $60,000 threshold despite recent selling pressure. Nevertheless, another breakdown could expose the asset to lower support zones, keeping market attention centered on whether buyers can defend current levels.

Analysts Project Possible Bitcoin Bottom Near $48,000

Several market analysts outlined scenarios involving deeper Bitcoin corrections during this cycle. Some projections suggested prices could fall below the $50,000 mark, though expectations varied regarding the ultimate bottom for the downturn.

Analyst Ted Pillows rejected forecasts calling for a decline toward $30,000 and instead identified a potential bottom range between $48,000 and $50,000. His outlook aligned with several recent bearish market projections.

Other market commentators also identified sub-$50,000 levels as potential support zones. Their assessments reflected ongoing concerns about weakening market momentum, while uncertainty surrounding global economic conditions continued affecting sentiment.

Advertisement

Recent forecasts from other industry figures similarly pointed to additional downside risk. These projections emerged as Bitcoin struggled to establish a sustained recovery, and market participants continued assessing lower price scenarios.

Despite bearish projections, Bitcoin maintained a position above key support levels and preserved a significant portion of gains recorded over previous years. Continued selling pressure, however, could challenge those supports in coming sessions.

The latest Bhutan-linked Bitcoin transfers coincided with these bearish market forecasts. Traders evaluated broader economic developments and technical signals as Bitcoin entered a critical period, with analysts debating whether support can hold or prices could slide toward the $48,000 region.

Risk & affiliate notice: Crypto assets are volatile and capital is at risk. This article may contain affiliate links. Read full disclosure

Advertisement

Source link

Continue Reading

Crypto World

XRP Dominates South Korea’s Bitcoin Seoul Despite 15% Price Decline

Published

on

XRP Dominates South Korea’s Bitcoin Seoul Despite 15% Price Decline

TLDR:

  • XRP South Korea trading leads Upbit volumes, surpassing BTC and ETH in active daily market participation
  • South Korean retail investors continue driving XRP demand despite broader crypto market weakness and volatility
  • XRP/KRW fell about 15.2% weekly, forming lower highs and testing key support near the ₩1,650–₩1,700 zone
  • Resistance levels for XRP South Korea now sit near ₩1,800 and ₩1,900 after repeated rejection attempts

XRP South Korea remains one of the strongest cryptocurrency narratives in Asia as the token continues to dominate trading activity on Upbit.

Even as prices faced a sharp weekly correction, XRP maintained exceptional market participation, reinforcing its position among South Korea’s most actively traded digital assets.

XRP South Korea Trading Strength Outpaces Bitcoin And Ethereum

XRP South Korea trading activity continues to attract attention as the token regularly outperforms Bitcoin and Ethereum on Upbit, the country’s largest cryptocurrency exchange.

During periods of elevated market activity, the XRP/KRW pair frequently secured the top position by daily trading volume, reflecting sustained retail demand.

The trend remained evident throughout 2025. Exchange data released earlier this year showed XRP processed more than $1 trillion in cumulative trading volume on Upbit during the calendar year.

Advertisement

The figure placed XRP ahead of both Bitcoin and Ether, cementing its status as a preferred trading asset among South Korean investors.

User participation has also remained remarkable. Reports indicate that roughly 13.26 million users have traded XRP on Upbit, representing nearly one-quarter of South Korea’s population. The scale of adoption highlights the token’s unique standing within the local digital asset market.

Recent volume figures further reinforced that trend. In mid-May, XRP recorded approximately $110.9 million in daily trading volume on Upbit.

By comparison, Bitcoin generated around $88.6 million while Ether posted roughly $67 million. On several occasions, XRP accounted for more than one-fifth of the exchange’s daily activity.

Advertisement

XRP Price Slides As Traders Defend Critical Support Zone

Despite its volume leadership, XRP’s market performance has recently faced increased selling pressure. The XRP/KRW pair declined from above ₩2,000 at the beginning of the observed period to nearly ₩1,712 by week’s end, representing a weekly loss of approximately 15.2%.

XRP/KRW Pair Source: CoinGecko

The seven-day chart reflects a clear bearish structure. Price action formed a series of lower highs and lower lows, indicating that sellers maintained control throughout much of the period. While buyers attempted several recoveries, those moves failed to establish lasting momentum.

Notably, rallies on June 2 and June 3 pushed XRP back toward the ₩1,900 region. However, each rebound encountered renewed selling pressure, preventing the formation of a broader recovery trend. The repeated rejection near higher levels reinforced market caution.

Advertisement

At the same time, trading activity remained elevated during the decline. Strong volume suggested active participation rather than reduced liquidity conditions.

Market attention has consequently shifted toward the ₩1,650 to ₩1,700 range, which emerged as a key support area after attracting buying interest.

On the upside, resistance levels are now forming near ₩1,800 and ₩1,900. Traders are closely monitoring whether XRP can reclaim those zones as South Korea’s most traded cryptocurrency continues navigating a volatile market environment.

Advertisement

Source link

Continue Reading

Crypto World

Why Bitcoin miners are becoming AI data centers

Published

on

Why Bitcoin miners are becoming AI data centers

While Bitcoin fell roughly 17% through the first months of 2026, a basket of Bitcoin mining stocks rose more than 50%, with the best performers up over 70%.

Summary

  • Public Bitcoin miners have secured more than $70 billion in AI and high-performance computing contracts as the sector shifts away from dependence on mining revenue.
  • Mining stocks have outperformed Bitcoin in 2026, with a basket of listed miners gaining over 50% while BTC has fallen about 17%.
  • Miners have sold more than 15,000 BTC from corporate treasuries and taken on billions of dollars in debt to fund AI data center expansion.

That divergence is not an anomaly. It is the clearest signal of the most important industrial transformation in crypto: Bitcoin miners are abandoning Bitcoin, or at least demoting it, to become artificial intelligence data centers.

The numbers are staggering. More than $70 billion in cumulative AI and high-performance computing contracts have now been announced across the public mining sector.

Advertisement

Hut 8 signed a 15-year, $9.8 billion lease for a 352-megawatt Texas facility built to NVIDIA’s reference architecture. TeraWulf has locked in $12.8 billion in contracted AI revenue. IREN secured a $9.7 billion deal with Microsoft for 76,000 NVIDIA GPUs.

Industry projections suggest listed miners could derive as much as 70% of their revenue from AI by the end of 2026, up from roughly 30% today. The companies built to mine Bitcoin are becoming something else entirely, and they are selling their Bitcoin to pay for the transition.

This piece explains why the pivot is happening, who is winning, how they are funding it, and what it means for Bitcoin itself.

Advertisement

The divergence that tells the story

The single fact that captures the whole transformation is the gap between miner stocks and the asset they were built to produce. 

In 2026, as Bitcoin slid on rising Treasury yields and hawkish Federal Reserve expectations, the companies that mine it went the other way. A tracked basket of crypto mining equities rose 56% year-to-date while Bitcoin (BTC) itself fell about 17%, according to 10X Research. The individual leaders did far better. TeraWulf gained more than 73%. A handful of mining and AI-infrastructure stocks led the gains in the very weeks Bitcoin was bleeding. For an industry whose fortunes were supposed to rise and fall with the Bitcoin price, that decoupling is remarkable, and it is the market’s way of saying these are no longer Bitcoin companies.

The reason is straightforward once you see it. The market has stopped valuing these companies on how much Bitcoin they mine and started valuing them on how much AI computing capacity they can deliver. A miner that has signed multi-billion-dollar, 15-year leases with AI counterparties has a predictable, contracted revenue stream that looks nothing like the volatile, halving-exposed economics of Bitcoin mining. Investors are pricing the contracted AI backlog, the delivery timelines, and the quality of the counterparties, and rewarding the companies that moved fastest. Bitcoin’s price direction, for the leading names, has become a secondary consideration.

This is why the pivot deserves attention even from people who do not own mining stocks. When an entire industry that was built around Bitcoin starts being valued as an AI infrastructure play and starts behaving accordingly, it changes things about Bitcoin itself, from the network’s hashrate to the selling pressure on its price. To understand those effects, you first have to understand why the miners are running for the exits.

Advertisement

Why mining stopped being good enough

Bitcoin mining was always a brutal business, and a confluence of forces in 2025 and 2026 made the AI alternative too attractive to ignore.

Mining economics are punishing by design. Roughly every four years, the Bitcoin halving cuts the block reward in half, slashing miners’ primary revenue overnight unless the price rises enough to compensate. Miners compete in a zero-sum race for the same fixed pool of block rewards, so as more computing power joins the network, each miner’s share shrinks. They are price-takers on their revenue, which swings with Bitcoin’s volatility, and price-takers on their largest cost, electricity. It is a business of thin, unpredictable margins and relentless capital expenditure on hardware that becomes obsolete in a few years.

Then artificial intelligence created an almost perfectly matched opportunity. The AI boom produced explosive demand for data center capacity, and specifically for the two things Bitcoin miners already had in abundance: large-scale access to cheap power and the physical infrastructure to house and cool enormous racks of energy-hungry machines. A Bitcoin mine is, at its core, a building full of power hookups, cooling systems, and high-density computing, which is most of what an AI data center needs too. The miners were sitting on exactly the scarce resource, secured power capacity at scale, that the hyperscalers and AI cloud providers were desperate to acquire.

The economics of the swap are night and day. Instead of mining a volatile asset in a zero-sum halving race, a miner can sign a 15-year lease with a creditworthy AI counterparty for hundreds of megawatts of capacity, generating stable, contracted, dollar-denominated revenue with hosting margins that can exceed 25%. One is a commodity business at the mercy of Bitcoin’s price; the other is an infrastructure-rental business with predictable cash flows and investment-grade tenants. Faced with that choice, the rational move for a company sitting on gigawatts of power was obvious, and the leaders made it aggressively. 

Advertisement

Who is winning the pivot

The transformation has produced clear execution leaders, and walking through the marquee deals shows just how far it has gone.

Hut 8 has undertaken one of the most aggressive transformations in the sector. It signed a 15-year, $9.8 billion lease for its Beacon Point campus in Nueces County, Texas, a 352-megawatt facility designed to NVIDIA’s DSX reference architecture, lifting its contracted AI capacity to roughly 597 megawatts. The company’s posture says everything: in a recent earnings call, Hut 8 stated that Bitcoin is no longer a long-term strategic focus, and its CEO has repositioned it around a model of integrated power and compute rather than merchant mining. The company that once defined itself by its Bitcoin treasury now defines itself by its AI leases.

TeraWulf has been the credibility leader, partly because of who is backing it. It has signed HPC contracts totaling $12.8 billion, with deals anchored by Google-backed Fluidstack and other counterparties, and roughly 27% of its revenue already comes from AI, a figure projected to reach about 70% by year-end. In the first quarter of 2026, TeraWulf generated $21 million in HPC revenue out of $34 million in total revenue, meaning the AI business had already become the larger, more stable, more market-valued part of the company.

IREN, the largest of the group by market cap, made the most telling strategic choice: it secured a $9.7 billion deal with Microsoft for 76,000 NVIDIA GB300 GPUs across 200 megawatts at its Childress, Texas campus, and it holds zero Bitcoin in treasury, by deliberate choice rather than financial necessity. Core Scientific has roughly $10 billion in contracted revenue through CoreWeave partnerships. Galaxy Digital signed a 15-year, 800-megawatt commitment with CoreWeave expected to generate around $4.5 billion. Cipher Digital liquidated a third of its Bitcoin reserves and is repositioning as a pure HPC operator. The pattern across all of them is the same: power capacity plus a creditworthy AI tenant plus a long-term lease, and the company is revalued from miner to infrastructure operator.

Advertisement

One metaphor has spread across the sector to describe the hybrid version of this strategy: the “mullet data center.” Bitcoin mining runs in the back as a flexible, interruptible workload used to balance grid demand and soak up power when AI is not using it, while AI occupies the front, where the multi-year contracts and stable margins live. Business in the front, party in the back. It captures how even the miners keeping a foot in Bitcoin are reorganizing around AI as the main event.

How they’re paying for it, and the risk that creates

The pivot is not free, and the two ways miners are funding it both carry real risk that the rally has so far looked past.

The first source is debt, and the sector’s leverage has changed character entirely. Building AI data centers to hyperscaler specifications requires enormous upfront capital, and the miners have taken on infrastructure-scale debt to do it. IREN carries roughly $3.7 billion in convertible notes across multiple series. TeraWulf has around $5.7 billion in total debt. Cipher Digital issued $1.7 billion in senior secured notes, which caused its quarterly interest expense to surge from $3.2 million across nine months to $33.4 million in a single quarter. These are not mining-company balance sheets. They are bets that the AI revenue will materialize fast enough, and reliably enough, to service obligations that now dwarf anything the mining business ever carried. If the AI demand softens or the buildouts run late, that debt becomes a serious problem.

The second source is more symbolic: the miners are selling their Bitcoin to fund the transition. Publicly listed miners have collectively reduced their Bitcoin treasuries by more than 15,000 BTC from peak levels. Core Scientific sold $175 million worth of Bitcoin, about 1,992 coins, in March 2026 to fund operational transitions. This is a genuine cultural break. For years, miners held Bitcoin on their balance sheets as a core conviction, treating accumulated coins as a strategic reserve. Now they are liquidating that reserve to build AI infrastructure, selling the asset that built their businesses to finance becoming something else. It is the clearest possible statement of where they think the future lies, and it adds a steady stream of miners selling to a Bitcoin market already under pressure.

Advertisement

There is also a concentration-and-oversupply risk hanging over the whole sector. Because so many miners are pursuing the same pivot at once, there is a real possibility of overbuilding AI data center capacity relative to demand, which could compress the very margins that make the strategy attractive. And the AI workloads, unlike interruptible Bitcoin mining, cannot be easily curtailed during peak grid demand, which is already creating friction with some state regulators over power pricing and water usage. The pivot is being priced by the market as a near-certain win, but it rests on assumptions, sustained AI demand, manageable debt, and regulatory cooperation that are not guaranteed. 

What it means for Bitcoin

Zoom out from the mining stocks, and the pivot has real consequences for Bitcoin itself, in ways that are easy to miss when the focus is on miner share prices.

The most direct effect is on Bitcoin’s hashrate and network security. As miners divert power capacity from Bitcoin mining to AI workloads, computing power that would have secured the Bitcoin network goes to training and running AI models instead. Bitcoin recorded its first first-quarter hashrate drop in six years partly because of this diversion. This is not an immediate security threat; the network remains enormous and secure, but it is a structural shift. Bitcoin’s security budget historically grew as mining expanded; now a chunk of the industry’s growth is flowing to AI instead, and the long-run implications of miners treating Bitcoin as the interruptible back-of-the-mullet workload are new.

The second effect is selling pressure. The 15,000-plus Bitcoins that miners have sold to fund their AI transitions are real supply hitting the market, and it comes from a cohort that used to be reliable holders. In a weak market, that miner selling is one more source of pressure on the price, and it connects to the broader narrative, voiced by figures like Michael Saylor, that the AI buildout is draining capital and resources away from Bitcoin. The miners selling BTC to build AI data centers is that thesis made literal: the people who produce Bitcoin are cashing it in to chase the AI opportunity.

The deeper question is whether the pivot is reversible, and the evidence suggests it mostly is not. Analysts looking at whether a Bitcoin price recovery to $80,000 or higher would pull capacity back to mining have concluded the migration is mostly one-way. The 15-year lease structures that dominate the new AI contracts make reverse migration economically irrational; a company locked into a decade-and-a-half commitment to an AI tenant cannot simply flip its data center back to mining when Bitcoin rallies. That permanence is what makes this an industrial transformation rather than a temporary rotation. The Bitcoin mining industry as it exists is not pausing to wait out a bear market. A large part of it is converting into something else permanently, and the converted capacity is not coming back.

For Bitcoin, the net of all this is a more mature, more independent network whose price no longer has the miners as committed backstop buyers, whose hashrate growth competes with AI for power, and whose former producers have become some of its sellers. None of that is catastrophic, and a leaner mining sector focused on the most efficient operations may even be healthier. But it is a real change in the structure that underpins the asset, driven by an AI boom that turned out to want exactly what Bitcoin miners were sitting on. The quiet transformation of miners into AI data centers is one of the most consequential things happening in crypto, precisely because almost no one is framing it as a crypto story at all.

This article is for informational purposes and does not constitute financial or investment
advice. Cryptocurrency markets are highly volatile. The figures and analysis described
reflect data available as of June 5, 2026. Always do your own research and consult with
qualified financial professionals before making investment decisions.

Advertisement

Source link

Advertisement
Continue Reading

Crypto World

Top 3 Altcoins to Buy Amidst CLARITY Act’s Passing: TAO, SUI, and SOL

Published

on

Crypto Breaking News

Key Insights

  • Bittensor (TAO) becomes a prominent decentralized AI network gaining more industry traction
  • Sui (SUI) concentrates on free stablecoin transfers and efficient movement of digital assets
  • Solana (SOL) attracts continued institutional interest while producing high ecosystem revenue

In addition to Washington’s ongoing efforts on the CLARITY Act, the crypto investing community is carefully watching the latest moves that might bring about changes in regulation. According to many market analysts, regulatory clarity may lead to more institutional investment and better stability in the cryptocurrency ecosystem.

Despite some lingering uncertainties, there are many blockchain projects that show significant growth in terms of development and adoption. Some of the interesting projects include Bittensor (TAO), Sui (SUI), and Solana (SOL). These projects cover significant markets, and their success may be influenced positively by any regulatory clarity coming from the US.

TAO — Bittensor: Decentralized AI Makes Inroads

TAO, or Bittensor, has emerged as one of the most closely followed decentralized AI ventures currently. The platform seeks to create a decentralized market where developers can share their AI models and get rewarded depending on the contribution they make to the blockchain.

As more sectors leverage AI technologies across the globe, there are plenty of investors looking for alternatives to standard AI companies. Bittensor presents a decentralized model with high transparency and collaboration.

Recently, the decentralized platform saw increased media coverage ahead of the Proof of Talk conference in Paris. The conference drew numerous developers and entrepreneurs in search of cutting-edge technology. Such events could help increase interest and awareness regarding Bittensor’s prospects.

Advertisement

As AI adoption gains traction worldwide, decentralized AI could hold significant potential. Consequently, TAO ranks among the AI crypto assets investors should monitor.

Sui (SUI): Development of Practical Financial Tools

The Sui Network continues to present itself as a blockchain aimed at serving practical purposes. Among SUI’s most interesting projects in terms of functionality is one that enables free transactions with stablecoins of any amount.

Fees for transactions can be an obstacle for users of various blockchains. Eliminating or minimizing these fees can facilitate user activity and allow for more efficient movement of money.

Another opportunity Sui can take advantage of is tokenization. The development and implementation of a system in which the majority of assets, including securities, are issued in digital format may become a key factor favoring particular blockchain platforms. Unlike some projects that seek attention through PR, SUI focuses on developing practical, valuable solutions.

Advertisement

Solana (SOL): Ecosystem and Institutional Momentum

Solana remains one of the leading blockchain ecosystems in the cryptocurrency markets despite fluctuations in trends. The network shows strong developer activity, a growing user base, and notable revenue generation.

Recently, seven Solana-based projects reported revenues of more than eight figures at the start of 2026. The high demand for products and services on the blockchain reinforces its position among top smart-contract platforms.

Institutional support is also an important catalyst for Solana’s price movements. JPMorgan disclosed a position worth about $500,000 in the Solana staking fund from Bitwise. While that investment may appear modest, many see it as an indication of growing institutional interest. All things considered, Solana remains one of the leading platforms in the crypto ecosystem.

Risk & affiliate notice: Crypto assets are volatile and capital is at risk. This article may contain affiliate links. Read full disclosure

Advertisement

Source link

Continue Reading

Crypto World

USDT Flipping ETH: What It Means for Stablecoins and Neobanks

Published

on

Brian Armstrong's Bold Prediction: AI Agents Will Soon Dominate Global Financial

TLDR:

  • USDT flipping ETH marks a shift from speculative crypto assets to demand for stable dollar liquidity.
  • The stablecoin market grew 30x in five years, expanding from under $10B in 2020 to over $300B today.
  • Visa, Mastercard, and MoneyGram are integrating stablecoins into live settlement and payment networks.
  • Neobanks building on stablecoin rails can offer global accounts, cards, and cross-border transfers from launch.

USDT flipping ETH in market capitalization is reshaping how the crypto industry understands value. For years, Bitcoin held the top position while Ethereum sat firmly at number two.

That order reflected a market built around assets and protocols. Now a dollar-pegged token is challenging that structure, and the shift carries real consequences for stablecoins and the neobanks positioning to build on top of them.

What the USDT and ETH Flip Reveals About Stablecoin Demand

USDT flipping ETH is not a story about one token outperforming another. It reflects a fundamental change in what the market wants from crypto infrastructure.

The world is not only seeking crypto assets anymore. It is seeking crypto money, and stablecoins are delivering exactly that.

The stablecoin market has expanded from under $10 billion in 2020 to over $300 billion today. USDT accounts for roughly $187 billion of that total, with USDC holding approximately $76 billion.

Advertisement

That 30x growth over five years did not come from speculation. It came from real demand for dollar liquidity on programmable rails.

Early stablecoin use centered on trading. Sell a volatile asset, park value in USDT, move funds across exchanges. That use case still exists, but it no longer defines the market.

Stablecoins now move through cross-border payments, B2B settlement, freelancer payouts, merchant transactions, remittances, and on-chain lending.

Unlike token narratives that fade when attention moves elsewhere, stablecoin demand is tied to broken money movement. That demand does not dry up in a bear market.

Advertisement

In many cases, it grows stronger, because businesses still need settlement and users still need dollar access regardless of price cycles.

What the Flip Means for Neobanks Building on Stablecoin Rails

The USDT and ETH shift is also a signal for neobanks watching the stablecoin market closely. The first generation of neobanks improved the banking interface while leaving legacy rails intact underneath. The next generation is replacing those rails entirely with stablecoin infrastructure.

A stablecoin-native neobank can operate globally from day one. It can offer USD balances, crypto cards, P2P liquidity markets, merchant settlement, cross-border transfers, payroll, and FX routing without relying on local banking systems.

Stablecoins become the money layer, while the neobank provides the product experience users interact with daily.

Advertisement

Major payment networks are already moving in this direction. Visa’s stablecoin settlement pilot reached a $7 billion run rate and grew 50% quarter over quarter.

Mastercard has entered stablecoin payouts and multi-token infrastructure. MoneyGram launched a dollar-pegged stablecoin connected to a network serving tens of millions of users.

Projections place the stablecoin market between $1.2 trillion and $1.9 trillion by 2028 to 2030. At that scale, the competitive edge will not belong to stablecoin issuers alone.

It will go to neobanks that own user relationships, local liquidity, merchant networks, and distribution. USDT flipping ETH is the market pointing directly at that opportunity.

Advertisement

Source link

Continue Reading

Crypto World

This Hidden AI Stock Up 5,100% While Bitcoin and Ethereum Lost Nearly 40%

Published

on

AXT Inc. (AXTI) Price Performance - 1 Year. Source: TradingView

While Bitcoin and Ethereum lost nearly 40% over the past 12 months, AXT Inc. surged more than 5,100%, becoming one of the most impressive AI-linked stories in financial markets this cycle.

We break down what AXT does, why it exploded, and how it compares against Bitcoin and Ethereum across a brutal year for crypto markets.

AXT Inc. (AXTI) Price Performance - 1 Year. Source: TradingView
AXT Inc. (AXTI) Price Performance – 1 Year. Source: TradingView

How AXT Inc. Surged Over 5,100% in Just 12 Months

AXT Inc. is a California-based semiconductor company that manufactures high-performance compound substrates. Its flagship product is Indium Phosphide, alongside Gallium Arsenide and Germanium, all critical materials for advanced photonic and optical applications across AI.

The numbers speak loudly. AXTI traded near $1.74 in June 2025, then jumped close to $89 by early June 2026, a rally of more than 5,100% across the period.

The stock briefly touched an all-time high of over $140 on May 22, 2026, before correcting roughly 35%. Even after that pullback, AXTI’s annual gains remain spectacular and rank among the best of the entire stock market.

The rally was driven by the explosion of AI infrastructure demand. Hyperscalers like Google, Amazon, Microsoft, and Meta accelerated data center construction, generating a record backlog for AXT and lifting expectations of major future capacity expansions.

AXT’s Indium Phosphide substrates power next-generation lasers and optical transceivers running at 800G and 1.6T speeds. These components enable ultrafast interconnects within modern AI data centers, making them critical to the entire ecosystem.

Advertisement

The company controls roughly 40% of the global Indium Phosphide supply. Few short-term substitutes exist, giving AXTI rare pricing power and a near-monopoly in a specific corner of the AI infrastructure supply chain.

Indium Phosphide Wafer Market Size and Share. Source: Mordor Intelligence

In its Q1 2026 earnings report released on April 30, AXT Inc. (AXTI) posted revenue of $26.9 million, up 39% YoY from $19.4 million.

The company significantly improved its gross margin to 29.6% (from negative 6.4% in Q1 2025), while narrowing its GAAP net loss to $1.6 million ($0.03 per share), beating analyst expectations.

Strong demand for Indium Phosphide substrates for AI data centers drove the results, with a record backlog exceeding $100 million.

How Bitcoin and Ethereum Compare Over the Same Year

Bitcoin and Ethereum experienced the opposite story. The king of the crypto market traded near $110,000 one year ago and now sits close to $60,700, a decline of roughly 40% across the same twelve-month period.

Advertisement

This week the picture worsened sharply. Bitcoin suffered a heavy liquidation event, dropping more than 17% in a single week and breaking below $60,000, approaching yearly lows that few major holders expected.

Bitcoin (BTC) Price Performance - 1 Year. Source: TradingView
Bitcoin (BTC) Price Performance – 1 Year. Source: TradingView

The macro backdrop did not help. Spot Bitcoin ETFs recorded outflows above $1.7 billion this week alone, the largest weekly data in over a year, according SosoValue data. Meanwhile a strong United States jobs report reduced expectations for upcoming rate cuts.

Ethereum has followed a similar downward path. The asset traded near $2,685 one year ago and now around $1,560, a correction of roughly 35% across the same broader twelve-month window.

This week was equally tough for ETH. The token dropped more than 22% in 7 days, breaking key technical support levels and reflecting the same risk-off sentiment now dominating both crypto and traditional financial markets.

Ethereum (ETH) Price Performance – 1 Year. Source: TradingView

The AXTI story illustrates a powerful lesson. In the current AI cycle, certain specialized “picks and shovels” suppliers can deliver returns that dwarf even the most popular crypto narratives, including Bitcoin and Ethereum across an equivalent investment window.

Yet AXTI remains highly volatile. Elevated valuation, AI sector dependence, and significant production exposure in China are real risks. The trajectory simply highlights the enormous upside hiding inside the quieter corners of the AI supply chain.

Advertisement

The post This Hidden AI Stock Up 5,100% While Bitcoin and Ethereum Lost Nearly 40% appeared first on BeInCrypto.

Source link

Advertisement
Continue Reading

Crypto World

Ethereum Store Value Debate Heats Up As Analysts Question ETH’s Monetary Value and Market Performance

Published

on

Crypto Breaking News

Key Points

  • The success of Ethereum going forward may depend on ETH’s ability to hold long-term monetary value
  • With the development of Layer-2 networks, there is debate regarding the impact of Ethereum’s adoption on ETH’s value
  • Weakness in ETH prices and lower support levels have raised questions about Ethereum’s economic model

Identity of Ethereum Undergoes Scrutiny Again

Questions have emerged once more about whether Ethereum serves as a good store of value as stakeholders analyze the link between the success of the Ethereum network and the intrinsic value of ETH. The discussion came into focus when comments from one of the co-founders of Bankless were widely shared within the cryptocurrency community.

In his comments, Ethereum was said not to be distinct from its underlying asset. This point led some people to believe that backing the future of Ethereum while disregarding its value was contradictory. This triggered further discussion from different quarters about the economic base of Ethereum.

Advertisement

Layer 2 Expansion Brings Up Value Creation Considerations

Moreover, the discussion grew even more heated when a co-founder of Bankless gave his point of view about how Ethereum creates value. The latter’s consideration was based on the question of whether an increase in blockchain usage means that the value of its token will go up.

The topic has been highly relevant lately due to Layer 2 expansion on Ethereum. Networks built on top of Ethereum perform increasingly more transactions, allowing better scaling and decreasing costs for end users. At the same time, however, it brings up concerns whether the activity conducted on Layer 2 brings direct value for ETH holders.

According to critics, the broad use of applications does not mean that the demand for tokens goes up as well. The reason is that there might be no connection between the network’s development and token growth if most activity occurs within the apps themselves.

Advocates of Ethereum state that ETH has remained the centerpiece of the ecosystem despite Layer 2 development. ETH still acts as the main asset for staking, is used as a major form of collateral in DeFi protocols, and remains one of the sources of network security.

Advertisement

Scarcity and Proof of Stake

Ethereum’s shift to proof-of-stake resulted in a reevaluation of its monetary policy. The upgrade implemented a mechanism that allows for the reduction of net ETH creation in periods of high network activity. It has led to narratives among supporters that the token becomes scarce under such conditions.

Supporters believe that the introduction of scarcity will contribute to Ethereum’s attractiveness as an investment. However, skeptics argue that scarcity alone may not ensure long-term demand given rising competition from new blockchain projects that can offer services and attract capital at lower costs.

Market Performance Brings Additional Pressure

Market performance recently added another dimension to the debate. ETH was trading at $1,669, marking a decline of about 3.7% over the reporting period.

The crypto had been struggling in a crucial support area of $1,725 before undergoing a notable drop. Even though buyers were able to stop the fall in the $1,650 range, the downturn increased focus on the asset’s future prospects.

Advertisement

At this point, the main concern does not revolve around Ethereum’s ability to attract new projects and developers. More investors are questioning whether progress in the ecosystem will eventually translate into higher ETH prices.

The further development of the project remains controversial: some investors focus on ecosystem expansion while others emphasize the need for ETH appreciation.

Risk & affiliate notice: Crypto assets are volatile and capital is at risk. This article may contain affiliate links. Read full disclosure

Advertisement

Source link

Continue Reading

Trending

Copyright © 2025