The US Senate’s crypto market structure bill could take until August to pass and risks not advancing at all if lawmakers cannot pass it before the midterms, said Greg Cipolaro, head of research at financial services firm NYDIG.

Patrick Witt, a senior White House crypto adviser, said earlier this month that he was targeting July 4 for the Senate’s crypto bill to pass, saying there was enough time for a Senate markup, floor vote and House vote. 

“This may represent an aspirational benchmark rather than a fixed legislative deadline,” Cipolaro said in a note on Friday. “The realistic window, however, is June through early August.”

The crypto market structure bill would outline how US watchdogs would regulate crypto and is seen as one of the most important pieces of crypto legislation this year. However, it has been marred by delays as lawmakers and lobbyists have sought to add or amend provisions around stablecoins and government officials’ use of crypto, among other issues.

The bill passed a long-delayed markup in the Senate Banking Committee on Thursday, which voted largely along party lines to advance it to the Senate floor, where it will need 60 votes to avoid prolonged debate and pass.

Senate Banking Chair Tim Scott, pictured at the markup. Source: US Senate

Republicans hold a 53-seat Senate majority and will need at least seven Democrats on board to pass the bill quickly, but some Democrats are concerned that the bill does not go far enough in preventing crime and sanctions evasion.

Cipolaro said Congress has a recess from late July to early September and will then return to a period ahead of the midterm elections in November, when Senate leadership “is unlikely to schedule a contested 60-vote floor fight.”

“If the bill misses that window, the highest-probability remaining pathway becomes a post-election lame-duck session, available only if Republicans hold the Senate and Majority Leader [John] Thune prioritizes it over government funding deadlines,” he added.

Current polling and predictions show a tight race for control of the Senate, with some forecasts showing Republicans with a slight edge, while others put key seats as tossups that could put Democrats in control of the chamber.

Cipolaro said that if Democrats gain control of the Senate, the current Republican-backed crypto market structure bill is unlikely to advance in the next Congress when it begins in January.

“Congressional negotiators face a tradeoff between accepting an imperfect bipartisan framework in 2026 versus risking a substantially different legislative environment after the midterms.”

Cipolaro said that if the bill is passed and signed into law, crypto markets would get a boost as major institutions would be confident enough to invest in the space because of the legal clarity. 

It would also grant regulatory certainty to Bitcoin, classifying it as a commodity under the Commodity Futures Trading Commission and closing “the last significant regulatory overhang for Bitcoin as an institutional asset class,” he added.

However, Cipolaro said the bill could fail because of stalled negotiations over provisions regarding ethics or decentralized finance enforcement, or because of scheduling delays, which would mean the crypto industry would continue to operate under “permanent jurisdictional ambiguity.”

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Aave has restored borrowing against wrapped Ether across affected markets as the decentralized lending protocol continues recovering from the fallout tied to Kelp DAO’s April exploit.

In a post published Sunday, Stani Kulechov said Aave had reinstated loan-to-value ratios for wrapped Ether collateral on Aave V3 Ethereum Core, Ethereum Prime, Arbitrum, Base, Mantle, and Linea, allowing users to once again borrow against WETH and execute collateral or debt swaps.

According to Aave governance documents, the restrictions had been introduced as emergency safeguards after attackers exploited Kelp DAO’s LayerZero-powered bridge on April 18 and used unbacked rsETH as collateral on Aave V3 to borrow large amounts of wrapped Ether. Governance participants later approved a proposal to remove the WETH freeze after recovery efforts progressed without additional user risk.

Earlier stages of the recovery process included restoring backing for rsETH with Ether recovered after the exploit, reopening withdrawals, and coordinating token support from protocols participating in the DeFi United recovery initiative.

Court battle over frozen Ether still unresolved

At the same time, legal and governance procedures surrounding frozen Ether tied to the exploit are still ongoing.

A binding Arbitrum Improvement Proposal opened for voting on May 15 after affected parties sought approval to transfer 30,765 ETH, worth roughly $71 million at the time, from the Arbitrum Security Council wallet to an address controlled by Aave LLC. Court filings showed the funds had been frozen on April 21 after investigators linked the assets to wallets associated with the exploit.

Before the governance process moved ahead, Judge Margaret Garnett of the Manhattan federal court modified an earlier restraining notice on May 9, allowing the transfer to proceed while protecting governance voters and related participants from personal liability tied to the order.

Legal claims over the Ether remain active, however. Gerstein Harrow LLP, representing families pursuing unpaid terrorism judgments against North Korea, argued in court filings that the assets could constitute property linked to the Lazarus Group because blockchain analytics firms attributed the exploit to North Korean state-backed actors. No court has formally determined that attribution as a legal fact.

Responding to the dispute earlier this month, Kulechov stated that the recovered assets belonged to users affected by the exploit and should not be treated as property lawfully owned by attackers.

Lending activity and liquidity conditions change after exploit

Data from DefiLlama showed Aave’s total value locked fell by more than $8 billion after the incident. As of Monday, the protocol held roughly $14.8 billion in TVL compared with nearly $23.5 billion in March.

The exploit itself generated approximately $195 million in bad debt on Aave after attackers allegedly linked to North Korean hacking groups stole around 116,500 Kelp DAO Restaked Ether tokens and used them to drain wrapped Ether liquidity from the lending markets.

Meanwhile, recovery work at Kelp DAO is continuing on a separate track. On Sunday, the protocol announced plans to discontinue rsETH bridging support on Optimism, HyperEVM, Unichain, Avalanche, and MegaETH after June 15 as part of what it described as a network consolidation effort focused on security and integration activity.

Kelp DAO added that users seeking to recover funds after the deadline would face a 100 USDC fee per address. Earlier this month, the protocol also migrated rsETH to Chainlink’s oracle infrastructure while continuing to attribute the exploit to vulnerabilities tied to LayerZero’s cross-chain systems, its former provider.

Aave users are now able to borrow against wrapped Ether on the decentralized finance protocol again, as the Kelp DAO exploit recovery plan continues to progress. 

Aave founder Stani Kulechov said in an X post Sunday that the protocol restored loan-to-value (LTV) ratios for wrapped Ether (WETH) to pre-incident levels across all affected networks: Aave V3 Ethereum Core, Ethereum Prime, Arbitrum, Base, Mantle and Linea. 

“The next step in the rsETH technical recovery plan has been completed with the restoration of WETH LTVs to their pre-incident levels across all affected networks. Users can now once again borrow against WETH on Aave, including through collateral and debt swaps,” Kulechov said.

The temporary freeze on WETH was a precautionary safety measure enacted in response to the exploit, according to Aave, alongside freezes on the rsETH and wrsETH reserves. However, in a governance proposal that passed on Saturday, the protocol said that given the demonstrated progress in recovery, the freeze can be “lifted now without compromising user protection.”

The development marks the final part of “Phase II” of the rsETH recovery plan, which also included restoring rsETH’s backing using the Ether frozen after the exploit and donated tokens from the DeFi United coalition and allowing withdrawals.

Source: Stani Kulechov

Total value locked on Aave down after Kelp exploit

Hackers believed to be linked to North Korean state-backed actors stole 116,500 Kelp DAO Restaked Ether tokens on April 18 from Kelp DAO’s LayerZero-powered bridge, then used them as collateral on Aave V3 to borrow wrapped Ether, resulting in about $195 million in bad debt on Aave.

Total value locked (TVL) on Aave dropped by more than $8 billion following the exploit, according to DefiLlama. As of Monday, its TVL is about $14.8 billion, down from $23.5 billion in March.

Tom Wan, head of data at consulting firm Entropy Advisors, which partners with the Arbitrum DAO, said that since the hack, wrapped stETH and wrapped Ether deposits have fallen.

However, there is now more unused Ether liquidity in the system, and the annualized borrowing rate has fallen to 1.9%, which he said could bring back traders interested in leveraged Ether yield strategies.

Ether utilization has dropped back below 90%. Source: Tom Wan

“ETH utilisation has dropped back below 90% with borrow APY now at 1.9%. Since the rsETH LZ hack, wstETH and weETH deposits are down $1.2B and $1.76B respectively,” Wan said.

“With wstETH/weETH to ETH loops now back to profitable, the question is whether ETH loop demand returns or if the capital stays on the sidelines/flows to Spark/Morpho,” he added.

Kelp sunsetting rsETH bridging on some networks

Meanwhile, Kelp DAO is also in the process of its own recovery efforts. On Sunday, the protocol said it’s “consolidating our supported networks to ensure the highest security standards for rsETH based on usage and integrations,” by sunsetting rsETH bridging in select networks after June 15, including Optimism, HyperEVM, Unichain, Avalanche and MegaETH. 

Related: Aave files emergency motion to lift restraining notice on frozen ETH

After the deadline, recovery of funds will cost 100 USDC (USDC) per address, according to Kelp.

Earlier this month, Kelp DAO migrated its restaking token, rsETH, to the Chainlink oracle platform while continuing to blame the attack on LayerZero’s cross-chain infrastructure, its previous provider. 

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US asset managers Grayscale and VanEck are edging closer to a potential US spot BNB ETF breakthrough, filing amended S-1 registration statements for their proposed products. The updates signal ongoing regulatory dialogue and a concerted effort to align with the SEC’s requirements as both firms position GBNB and VBNB for potential approval.

Grayscale submitted its second amendment to the S-1, while VanEck filed its fifth amendment on Friday. S-1s remain one of the core filings ETF issuers use to seek SEC clearance, detailing fund structure, management fees, strategies and risk disclosures. The repeated amendments suggest the issuers are incorporating feedback from regulators in hopes of bringing a BNB spot ETF to market in a near-term timeframe.

According to Bloomberg ETF analyst James Seyffart, “Another amended S-1 from [Grayscale] on the BNB ETF… have to guess they are going off feedback from SEC and trying to launch in near future? Could be the next crypto asset to get a spot ETF in the US.”

BNB remains a heavyweight in the crypto market, ranking as the fourth-largest cryptocurrency by market cap at roughly $87.4 billion, yet it has not secured a place in the expanding roster of US spot ETFs tracking altcoins such as Solana (SOL), Litecoin (LTC), XRP and Hyperliquid (HYPE).

The public filings for GBNB and VBNB come with broader context: Grayscale filed for GBNB on Jan. 23, 2026, and has not disclosed a management fee for the product. VanEck’s initial filing for VBNB traces back to May 2025, with the firm proposing a 0.39% management fee for the fund.

Key takeaways

• Grayscale and VanEck have submitted amended S-1 filings for GBNB and VBNB, signaling continued SEC engagement and a potential near-term launch path for a US spot BNB ETF.
• BNB’s market position remains outsized (about $87.4B), but the token is not yet part of the US spot ETF lineup, which currently includes other major altcoins.
• The US ETF landscape for crypto has grown under a generic listing standards framework introduced by the SEC, expanding altcoin ETF options beyond a case-by-case review model.
• Recent spot altcoin ETFs have had uneven debuts: Hyperliquid (HYPE) netted about $1.2 million on opening day, far below some earlier launches.
• Overall inflows continue to favor Bitcoin and Ether, while Solana-related products have begun reaching meaningful asset bases, signaling broader diversification in crypto ETF exposure.

BNB’s place in a shifting ETF landscape

The broader shift in the SEC’s approval process matters because it outlines an easier path for new crypto ETFs to gain listing and trading approval. Since September, the agency has moved toward a generic listing standards approach, replacing the prior, more manual case-by-case reviews. For investors, that could translate into clearer timelines and more predictability for launches of altcoin-focused ETFs, including BNB.

Asset managers on Wall Street have continued to test diverse ETF architectures in crypto, from staked products and leveraged strategies to futures-linked structures and multi-asset index funds. The evolving framework is helping issuers consider a wider array of potential products as crypto markets mature and demand for regulated access remains robust among institutional and retail investors alike.

Early performance signals and what they imply for adoption

Despite the regulatory tailwinds, the most recent batch of spot altcoin ETFs has not sparked the same immediacy of demand seen with some earlier launches. The Hyperliquid ETF, issued by 21Shares, reported opening-day net inflows of about $1.2 million — a modest start compared with peers in the space. In contrast, other new entrants have drawn much larger first-day tickets: the Bitwise Solana Staking ETF reported roughly $69.5 million on its debut in October, while the XRP-focused ETF pulled in about $245 million within a few weeks of launch.

Still, inflows to crypto ETFs overall remain heavily skewed toward the largest assets. Bitcoin and Ethereum products have accumulated approximately $58.4 billion and $11.8 billion, respectively, since 2024, underscoring where most investor appetite remains concentrated. Within this broader trend, US Solana-based ETFs have begun to surpass $1 billion in total net assets, currently standing around $1.11 billion, suggesting growing diversification of crypto exposure beyond BTC and ETH.

The picture suggests a nuanced landscape: while the SEC’s generic listing standards have helped unlock more potential products and foster competition among issuers, investor demand for new altcoin ETFs remains uneven. The path for GBNB and VBNB will hinge on how effectively the issuers address disclosure, liquidity, tracking accuracy and risk management in the eyes of regulators and investors alike.

As these amendments move through the review process, stakeholders will be watching for concrete milestones—whether the SEC schedules a vote, sets conditions, or approves the listings with specific requirements. For traders and fund managers, the evolving regime could offer fresh hedging and exposure tools, while for users and developers, it signals a broader acceptance of regulated crypto market access.

Readers should monitor further filings and any updates from Grayscale and VanEck as the SEC responds to the latest rounds of amendments, alongside ongoing market data showing how altcoin ETFs perform on their own merit once they reach the market.

Crypto analysts are divided over whether markets will see a major Bitcoin sell-off in May, a pattern that has emerged in the last two bear markets during US mid-term election years. 

In May 2018, Bitcoin crashed from nearly $10,000 to about $7,000 by the end of the month. It happened again in May 2022, when Bitcoin fell nearly 30% from about $40,000 to $28,500 before falling further in June to $20,000. 

With 2026 also a bear market year coinciding with a US mid-term election, there are concerns it could happen again. 

“The most brutal pattern in Bitcoin history. Nobody wants to hear this. But the pattern is perfect. Mid-term election years. Bitcoin dumps. Every time,” crypto analyst Merlijn Enkelaar said on Sunday.

Enkelaar said a similar move could see Bitcoin prices collapse to $33,000 despite the advancement of key legislation, the CLARITY Act, positive crypto sentiment from the Trump administration and potential trade deals between the US and China.

Joao Wedson, founder and CEO of Alphractal, also said Sunday that there would be a higher probability of a new capitulation phase if Bitcoin remains under $78,000, with bears “showing signs of strength.”

Bitcoin was trading at about $76,900 at the time of writing, down 5.6% over the past seven days.

The calendar didn’t cause previous crashes, analyst argues

Jeff Ko, chief analyst at the CoinEx exchange, told Cointelegraph on Monday that midterm election years have coincided with major Bitcoin bear markets, “so some traders may be tempted to frame 2026 as another ‘sell in May’ setup.” 

However, behind that historical seasonality were more concrete macro drivers, such as the Mt. Gox aftermath, China’s ICO crackdown, Fed tightening and the Terra/FTX collapses, he said.

“The calendar didn’t cause those drawdowns — specific shocks did.” 

Related: Bitcoin slides below $79K on macro fears: Can fixed-income outflows save it?

Ko said he doesn’t expect BTC to repeat the 70% to 80% drawdowns seen in past cycles because the market structure has fundamentally changed.

“Spot ETFs, corporate treasury adoption, and the CLARITY Act moving through Congress have meaningfully broadened and institutionalized the buyer base compared with past cycles,” he added. 

“In my view, a move toward the mid-$60k or high-$50k range could be defensible under a macro shock or a significant ETF outflow cascade. But a move back to $33k would likely require something genuinely systemic to break, rather than simply a repeat of historical seasonality.”

Key support level must hold 

MN Fund founder Michaël van de Poppe was also bullish, saying on X Sunday that the current Bitcoin price action “doesn’t shout for new lows” but is “consolidating after a run of 40%.”

However, an important support level that is currently preventing a larger decline is the $76,000 area, he cautioned. 

“If that level is lost, I would assume that the markets will see a further downward fall towards lower boundaries,” he said.

Trader eyes key support level that must hold. Source: Michaël van de Poppe

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