Crypto World
How Ethereum buys are powering the next wave of utility protocols
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Institutional accumulation of Ethereum signals rising confidence and renewed momentum for DeFi expansion.
Summary
- Institutional Ethereum inflows are boosting new DeFi protocols like Mutuum Finance, which has raised over $20.7m from 19k holders.
- Mutuum Finance builds non-custodial crypto lending on Ethereum, using mtTokens and debt tokens to manage liquidity and loans.
- Mutuum Finance expands DeFi lending with over-collateralized loans, letting users borrow against assets without selling them.
The top crypto market is currently witnessing a concentration of capital as institutional players increase their holdings of Ethereum (ETH). This trend of accumulation is providing a foundation of liquidity that often precedes a broader expansion in the decentralized finance (DeFi) sector.
As large-scale purchases signal growing confidence in the Ethereum network, the focus of the market is shifting toward utility-driven protocols that utilize this infrastructure to provide automated financial services.
Ethereum
Recent market data highlights a substantial increase in Ethereum accumulation. On March 2, the firm BitMine executed a significant acquisition of 50,928 ETH. This purchase brings the company’s total holdings to approximately 3.71% of the total Ethereum supply, moving them closer to their stated target of 5%.
Several analysts have noted that such large-scale movements often indicate potential growth for the asset regardless of short-term price fluctuations. Technical indicators like the Chaikin Money Flow (CMF) and Money Flow Index (MFI) currently suggest a high level of investor confidence and sustained buying pressure.
At present, Ethereum is trading within a range that has established a market capitalization of several hundred billion dollars. Following this recent accumulation, market observers are watching key resistance zones near the $3,800 and $4,000 levels. If the asset can maintain its support above $3,400, it may provide the necessary stability for the rest of the ecosystem to grow.
How massive Ethereum buys power utility protocols
Large Ethereum purchases do more than just influence the price of ETH; they act as a catalyst for the next wave of utility protocols. When institutional capital enters the Ethereum ecosystem, it validates the network’s security and longevity.
This confidence encourages developers and investors to explore new complex protocols like Mutuum Finance (MUTM), which is building a non-custodial framework for automated lending and borrowing. According to its official whitepaper, Mutuum Finance aims to create a decentralized environment where digital assets can be managed through code rather than human intermediaries.
The project has already achieved significant milestones, raising over $20.7 million in funding and establishing an investor base of 19,000 participants. The MUTM token is currently priced at $0.04. By building on the Ethereum network, protocols like Mutuum Finance benefit from the deep liquidity and security provided by the massive ETH accumulation currently taking place.
The Protocol’s mechanics
The economic model of Mutuum Finance relies on a transparent system of receipts and obligations. When a user deposits an asset like ETH into a liquidity pool, the protocol issues mtTokens (such as mtETH) as a yield-bearing digital receipt. These tokens represent the user’s share of the pool. As borrowers pay interest, the value of the mtToken increases. For example, if a pool has a 5% Annual Percentage Yield (APY), a user who deposits 20 ETH will find that their 20 mtETH is redeemable for 21 ETH after one year.
To manage the other side of the transaction, the protocol uses Debt Tokens. When a user borrows against their collateral, the system mints these tokens to track the principal and the accrued interest in real-time. The safety of these loans is managed by the Loan-to-Value (LTV) ratio. If the LTV for a specific asset is set at 75%, a user providing $4,000 in ETH as collateral can borrow a maximum of $3,000 in another asset, like a stablecoin. This ensures that every loan remains over-collateralized, protecting the protocol from potential bad debt.
Furthermore, this mechanism benefits the borrower by allowing them to access liquidity without having to sell their original assets. By borrowing against their ETH instead of selling it, the user can obtain liquidity for immediate use while still maintaining their investment position. If the value of the ETH increases during the loan period, the borrower still gains from that price growth.
The V1 protocol and risk-free testing
The Mutuum Finance V1 protocol is currently the primary environment for testing these features. It focuses on high-liquidity assets including USDT, ETH, WBTC, and LINK. By using the V1 testnet, users can interact with the system’s automated smart contracts. This provides a risk-free environment to understand how mtTokens grow in value, how Debt Tokens track interest, and how LTV ratios function under different market conditions.
In this V1 setup, the protocol uses decentralized oracles to provide live price feeds. These feeds are essential for calculating the “Stability Factor” of each user’s position. If the value of a user’s collateral drops and their Stability Factor falls below a safe threshold, automated liquidation bots sell a portion of the collateral to repay the loan. This mechanical approach ensures that the system remains solvent at all times, regardless of market volatility.
The synergy between Ethereum and protocol roadmaps
The future of both Ethereum and Mutuum Finance is defined by their respective roadmaps. Ethereum is continuing its transition toward greater scalability and lower transaction costs through its “Dencun” and subsequent upgrades. These improvements are vital for DeFi protocols, as they allow for more frequent and cheaper interactions with smart contracts. As Ethereum becomes more efficient, the cost of lending, borrowing, and staking decreases for the end-user.
The Mutuum Finance roadmap is also entering a critical phase. The protocol moves toward the launch of the Safety Module and its staking system. These two components work together to ensure the protocol remains healthy while rewarding users who help protect it.
In decentralized finance, sudden market shifts or technical issues can sometimes create a gap between what the protocol owes and what it holds. The Safety Module acts as a backstop by holding a pool of assets that the protocol can use to cover these unexpected losses. By having this reserve, the system ensures that lenders can always withdraw their funds, even during periods of high market stress.
Staking is the process by which users contribute to this security. When a user stakes MUTM tokens or mtTokens, they are essentially locking them into the Safety Module. By doing this, the user is acting as a guarantor for the protocol’s stability. Because the user is providing a vital service by backing the system’s safety, the protocol compensates for commitment.
This is where the Buy-and-Redistribute mechanism comes in to provide rewards. The protocol collects fees from every loan and trade made on the platform. A portion of these fees is used to buy MUTM tokens directly from the open market. Those tokens are then distributed to the people who have staked mtTokens in the Safety Module. This creates a sustainable cycle: as more people use the protocol, more fees are generated, which leads to more rewards for the stakers who keep the system secure.
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TLDR:
- Fidelity data shows Bitcoin volatility hitting record lows even months after the 2025 price peak near $126,000.
- Public companies and ETFs now hold nearly 12% of Bitcoin supply, signaling major institutional accumulation.
- Bitcoin’s MVRV ratio has stayed near 2x realized value this cycle, far below peaks seen in past bull markets.
- Fidelity’s profit-to-volatility ratio has remained above 0.015 since 2023, marking the longest stability period.
Bitcoin’s market behavior may be entering a new phase, according to recent research from Fidelity Digital Assets.
The firm argues that long-standing boom-and-bust cycles could weaken as institutional demand reshapes the market. Data shows volatility hitting record lows even months after Bitcoin reached new price highs.
The question now is whether the classic four-year Bitcoin cycle still defines the crypto market.
Bitcoin Volatility Trends Challenge the Classic Four-Year Cycle
Bitcoin reached a market capitalization near $2.5 trillion during its October 2025 peak. Prices climbed above $126,000 during that rally.
However, volatility moved in the opposite direction. One-year realized volatility recorded 17 new all-time lows in January 2026.
According to Fidelity Digital Assets research, this pattern differs sharply from previous cycles. Historically, volatility surged as Bitcoin approached market peaks.
The current trend suggests a shift toward a larger and more liquid market. Fidelity compared Bitcoin’s growth to large-cap technology companies reaching maturity.
The firm notes that Bitcoin’s market size has expanded rapidly across cycles. The asset is now twice as large as its 2021 peak valuation.
It also stands nearly ten times larger than the 2017 cycle peak. Compared with 2013, Bitcoin’s market capitalization has expanded more than 200-fold.
Fidelity’s data shows volatility began declining in late 2023. At the time, Bitcoin traded near $27,000 before starting its latest rally.
Institutional Demand Reshapes Bitcoin Market Structure
Demand patterns have changed significantly as institutions enter the market. Public companies and exchange-traded products now hold a growing share of supply.
According to Fidelity Digital Assets, 49 public companies hold more than 1,000 Bitcoin each. Combined holdings exceed one million BTC.
That amount represents more than five percent of Bitcoin’s circulating supply. The cohort has steadily increased holdings since early 2020.
Exchange-traded products have accelerated institutional accumulation. Spot Bitcoin ETPs launched in the United States in January 2024.
By January 2026, those vehicles collectively held nearly 1.3 million Bitcoin. This equals roughly 6.4 percent of the circulating supply.
Fidelity reported that the leading Bitcoin ETF surpassed $75 billion in assets within two years. Gold’s GLD ETF required almost seven years to reach that milestone.
On-chain metrics also suggest a calmer market cycle. Bitcoin’s market value to realized value ratio has remained near two throughout the current bull market.
Earlier cycles saw sharper expansions. The ratio reached six during 2013 and four during both the 2017 and 2021 cycles.
Fidelity estimates that reaching a ratio of four again would imply a $4.5 trillion Bitcoin market cap. That level corresponds to roughly $225,000 per coin.
The firm also introduced a “Profit to Volatility Ratio” metric. It compares profitable addresses with realized volatility.
That ratio has remained above 0.015 since late 2023. Fidelity describes this period as the longest stretch of stability in Bitcoin’s history.
TLDR:
- Claude Opus 4.6 found 22 Firefox bugs in 2 weeks, 14 flagged high-severity by Mozilla researchers.
- The 14 high-severity finds equal nearly a fifth of all such Firefox bugs Mozilla fixed in 2025.
- Claude succeeded in building working exploits in only 2 of several hundred automated attempts.
- Anthropic spent roughly $4,000 in API credits testing Claude’s exploit development capabilities.
Anthropic’s Claude Opus 4.6 identified 22 security vulnerabilities inside Firefox in just two weeks. Fourteen of those bugs were classified as high-severity by Mozilla. That figure represents nearly a fifth of all high-severity Firefox flaws remediated throughout 2025.
The findings emerged from a structured research partnership between Anthropic and Mozilla.
Claude AI Uncovers High-Severity Firefox Bugs at Record Speed
The collaboration began as an internal model evaluation.
Anthropic wanted a harder benchmark after Claude Opus 4.5 nearly solved CyberGym, a known security reproduction test. Engineers built a dataset of prior Firefox CVEs and tested whether the model could reproduce them.
Claude Opus 4.6 replicated a high percentage of those historical vulnerabilities. That raised a concern: some CVEs may already have existed in Claude’s training data.
Anthropic then redirected the effort toward finding entirely new bugs in the current Firefox release.
Within twenty minutes of beginning exploration, Claude flagged a Use After Free vulnerability inside Firefox’s JavaScript engine. Three separate Anthropic researchers validated the bug independently.
A bug report, alongside a Claude-authored patch, was filed in Mozilla’s Bugzilla tracker.
By the time that first report was submitted, Claude had already produced fifty additional crashing inputs. Anthropic ultimately scanned nearly 6,000 C++ files and submitted 112 unique reports to Mozilla. Most fixes shipped to users in Firefox 148.0.
Firefox 148 Ships Fixes as AI Exploit Research Raises New Alarms
Mozilla triaged the bulk submissions and encouraged Anthropic to send all findings without manual validation. That approach accelerated the pipeline significantly. Mozilla researchers have since begun testing Claude internally for their own security workflows.
Anthropic also tested whether Claude could move beyond discovery into active exploitation.
Researchers gave Claude access to the reported vulnerabilities and asked it to build working exploits. The goal was to demonstrate a real attack by reading and writing a local file on a target system.
Across several hundred attempts, spending roughly $4,000 in API credits, Claude succeeded in only two cases.
According to Anthropic’s published findings, the model is substantially better at finding bugs than exploiting them. The cost gap between discovery and exploitation runs at least an order of magnitude.
The exploits that did work required a test environment stripped of standard browser security features. Firefox’s sandbox protections were not present.
Anthropic noted that sandbox-escaping vulnerabilities do exist and that Claude’s output represents one component of a broader exploit chain.
Anthropic urged software developers to accelerate secure coding practices. The company also outlined a “task verifier” method, where AI agents check their own fixes against both vulnerability recurrence and regression tests.
Mozilla’s transparent triage process helped shape that approach throughout the research.
TLDR:
- HTX confirms all FLOW assets remained intact during the Flow network incident and verification process
- Flow developers patched the vulnerability responsible for abnormal transactions on December 27
- HTX restored FLOW trading, deposits, and withdrawals after verifying network stability
- Exchange removed its January notice following Flow’s detailed post-incident security report
Flow blockchain’s December security incident has reached a full resolution after coordination between the network and major exchange HTX.
The update confirms the vulnerability responsible for abnormal transactions has been patched and network operations restored. HTX also verified that all user-held FLOW tokens on its platform remain intact.
Trading, deposits, and withdrawals for the token have resumed normal operations.
Flow Network Incident Resolved as HTX Confirms Normal Operations
The Flow ecosystem shared an update confirming that the issue reported on December 27 has been fully resolved. The incident involved abnormal transactions triggered by a technical vulnerability on the network.
HTX activated internal emergency procedures once it detected the event. The exchange maintained communication with Flow ecosystem partners while monitoring the situation.
The latest update indicates that developers patched the vulnerability and restored normal network activity. The Flow team also identified and addressed abnormal minted assets during the review process.
Flow stated that ecosystem services have stabilized after the corrective actions. Network operations now function normally across supported platforms.
HTX verified user asset balances during the investigation period. The exchange reported that all FLOW tokens held by customers remain fully validated.
HTX Restores FLOW Trading, Deposits, and Withdrawals
HTX confirmed that FLOW trading resumed after reviewing the network’s recovery. Deposits and withdrawals for the token now operate without restrictions.
The exchange initially issued a notice about the incident on January 13. That notice questioned the security status of the Flow network at the time.
HTX later removed the notice after reviewing the Flow Foundation’s post-incident report. According to HTX, the report provided detailed explanations addressing earlier concerns.
The exchange stated that the new information clarified how developers handled the vulnerability. It also confirmed that the response restored stability across the network.
Flow Foundation acknowledged the collaboration between both organizations during the investigation period. The foundation stated it expects continued cooperation with HTX moving forward.
HTX reiterated that user asset security remains its top priority. The exchange said it will continue monitoring supported networks and working with ecosystem partners.
The update confirms the incident no longer affects current operations. FLOW trading infrastructure across HTX now runs under normal conditions.
Bitcoin fell to $67,960 by Saturday morning, down 3.4% over the past 24 hours and retreating sharply from the past week’s high. The move fits what has become a recurring script in recent months, with late-week selling dragging prices toward the lower end of the range heading into Saturday.
Majors took the harder hit again. Ether dropped 4.4% to $1,974, solana fell 4% to $84.31, dogecoin lost 2.9% to $0.09, and BNB slid 2.6% to $627. XRP fell 2.2% to $1.37.
The weekly picture tells a more nuanced story though. Bitcoin is still up 3.6% over seven days. Ether has gained 2.6%. BNB added 2.1%. The mid-week surge absorbed the war shock and then some, even if Friday’s pullback took the shine off.
Meanwhile, the dollar posted its steepest weekly gain in a year, strengthening as markets priced in higher energy costs, stickier inflation, and a Fed that has even less room to cut rates. That’s a direct headwind for bitcoin and every other asset denominated against the dollar.
“As tensions escalated in the Middle East last week, investors moved quickly to the safety of the U.S. dollar, which strengthened as markets began pricing in higher energy prices and reignited inflation fears, potentially delaying Federal Reserve rate cuts,” said Björn Schmidtke, CEO of Aurelion, in an email to CoinDesk.
The on-chain data paints a fragile picture beneath the surface. Glassnode data shows 43% of bitcoin’s total market supply is now sitting at a loss. That’s a significant overhang.
As bitcoin recovers, those underwater holders have an incentive to sell into any rally to break even, creating persistent resistance on the way up. It’s one reason the push to $74,000 on Thursday couldn’t hold. Every bounce toward higher prices runs into supply from people who’ve been waiting months to get out.
One bright spot came from stablecoin flows. Messari recorded a 415% jump in net stablecoin inflows to $1.7 billion over the week, with daily transfers up nearly 10%. That’s potentially dry powder waiting to be deployed, and it suggests retail isn’t entirely absent despite the fear-heavy sentiment. Whether that capital rotates into bitcoin or waits for lower prices is the question.
The war continues to set the tempo. The U.S.-Iran conflict showed no signs of resolution this week. Oil remains elevated. The Strait of Hormuz is still disrupted. And the macro backdrop of strong dollar, sticky inflation, and delayed rate cuts is the worst combination for risk assets.
Bitcoin’s week looked impressive in headlines, touching $74,000 mid-week, but the round trip from $68,000 to $74,000 and back to $68,000 is just another lap of the range.
Retail investors have been scooping up Bitcoin after it slipped below $70,000, but whale activity suggests the price could still head lower if past patterns repeat, according to crypto sentiment platform Santiment.
“The moment Bitcoin hit $74k, these key stakeholders began taking profit,” Santiment said in a report on Friday.
Santiment explained that whales — those holding between 10 and 10,000 Bitcoin (BTC) — “accumulated heavily” between Feb. 23 and Mar. 3, when Bitcoin was trading between $62,900 and $69,600.
Since Wednesday, when Bitcoin climbed past $70,000 and touched $74,000, the cohort has offloaded around 66% of their recent purchases, Santiment said. Meanwhile, retail investors — those holding below 0.01 Bitcoin — have been increasing their positions.
Correction may not be over yet, says Santiment
“When retail buys while whales sell, it typically signals that the correction is not yet over,” Santiment said. Bitcoin is trading at $67,984 at the time of publication, according to CoinMarketCap.
Bitcoin’s price decline led the Crypto Fear & Greed Index to fall 6 points, pushing it further into “Extreme Fear” territory with a score of 12 on Saturday.
MN Trading Capital founder Michael van de Poppe shared a similar outlook, saying a further decline is possible. “If Bitcoin doesn’t find support in this $67-68K region, then we’re likely going to retest the lows for liquidity before bouncing back upwards,” van de Poppe said in an X post on Friday.
Spot Bitcoin ETFs post largest outflow day in three weeks
The decline coincided with US-based spot Bitcoin ETFs posting their largest outflow day since Feb. 12, with a total of $348.9 million in net outflows across the 11 ETF products, according to Farside data.
Related: Trump’s National Cyber Strategy pledges to support crypto and blockchain
Bitcoin’s price fell as low as $60,000 on Feb. 6 during its downtrend from the October all-time high of $126,000 before showing a modest recovery. Economist Timothy Peterson suggests this level could be the floor for the time being.
“This valuation level has always marked a bottom for Bitcoin. About 99.5% chance it stays above $60k,” Peterson said in an X post, referring to the Bitcoin Price to Metcalfe Value chart.
Magazine: The debate over Bitcoin’s four-year cycle is over: Benjamin Cowen
The US administration released its National Cyber Strategy on Friday, signaling that crypto and blockchain technologies are now explicitly targeted for protection and secure integration within the nation’s digital infrastructure. Industry executives say the emphasis could shape policy levers ranging from funding for security research to potential enforcement actions. The six-page document frames the crypto ecosystem not only as a financial frontier but as a critical layer in national security, calling for secure supply chains and privacy protections from design to deployment. As crypto firms digest the implications, questions linger about how the administration will balance innovation with controls on privacy tools, mixers, and unregulated off-ramps.
Among the bold lines, the strategy states a commitment to “build secure technologies and supply chains that protect user privacy from design to deployment, including supporting the security of cryptocurrencies and blockchain technologies.” That clause, highlighted by industry observers as a first for a US cybersecurity framework, signals a potential opening for closer public-private collaboration on security standards. Yet, the policy also contains tougher language about criminal infrastructure and the denial of financial exits for illicit actors, a section that some analysts say could justify crackdowns on privacy-focused tools and crypto mixers in the longer run.
“We will build secure technologies and supply chains that protect user privacy from design to deployment, including supporting the security of cryptocurrencies and blockchain technologies.”
For Galaxy Digital’s head of firmwide research, the wording is a telling shift. Alex Thorn argued that explicitly naming crypto and blockchain as technologies to be protected marks a milestone in how Washington views the sector’s role in national security. The broader document, the industry veteran noted in a post, maps a future where cybersecurity risk management dovetails with crypto governance, potentially guiding federal engagement with crypto firms and infrastructure projects.
Another thread running through the document concerns resilience against emerging threats, notably quantum computing. Castle Island Ventures founder Nic Carter has been vocal about quantum risk to Bitcoin and the broader crypto ecosystem. In a take that aligns with the strategy’s emphasis on modernizing federal information systems, Carter pointed to the section calling for “post-quantum cryptography, zero-trust architecture, and cloud transition” as proof that policymakers are taking quantum threats seriously. “Sure seems like they’re taking quantum seriously. Nothing to worry about, I’m sure,” he said on X.
Bitcoin’s quantum risk lens tightens policy dialogue
The strategy’s posture toward quantum resilience comes at a time when the industry has debated how close practical quantum computing is to undermining current cryptographic underpinnings. Carter’s views reflect a broader tension inside the crypto community: balancing the need for robust, future-proof security with the practicalities of ongoing network upgrades and governance. The document’s emphasis on post-quantum cryptography is not merely an academic exercise; it foreshadows potential standards for federal and industry-grade security that could ripple through crypto custody, exchanges, and other critical components of the ecosystem.
In the same breath, the strategy reframes AI as a frontier technology that warrants careful risk management and innovation safeguards. The document states, “We will secure the AI technology stack—including our data centers—and promote innovation in AI security.” For crypto developers and asset managers, that phrasing suggests a growing overlap between AI-enabled security tooling, data integrity, and the safeguarding of sensitive financial information within crypto networks.
Beyond technology, the strategy highlights the importance of recruiting the next generation of cyber professionals to design and deploy advanced cyber technologies. This workforce emphasis mirrors a broader policy objective of aligning national security priorities with a vibrant tech economy, including the crypto sector, which relies on sophisticated cryptography, secure software supply chains, and resilient cloud infrastructure.
Market context
Market participants are watching how this policy direction translates into practical steps. The strategy’s emphasis on secure technologies and anti-criminal enforcement may influence risk sentiment, regulator expectations, and capital flows within crypto markets. While the document stops short of prescribing specific new rules, its signaling—particularly around post-quantum security, zero-trust architectures, and secure supply chains—could shape future standards, audits, and compliance requirements for crypto firms and their service providers.
Why it matters
For crypto users and investors, the strategy’s framework could translate into clearer security expectations and potentially more formal coordination between government agencies and the private sector on safeguarding digital assets. Acknowledging crypto and blockchain as technologies warranting protection might open avenues for collaboration on security research, testing, and standard-setting, helping to reduce systemic risk in the space.
For builders and operators, the document signals that security-by-design will be a central theme in any future regulatory guidance. Post-quantum readiness, zero-trust adoption, and robust cloud migration plans could become de facto prerequisites for governmental contracts, subsidies, or public-private partnerships, shaping how wallets, exchanges, and custody solutions structure their software, audits, and incident-response playbooks.
From a policy perspective, the juxtaposition of safeguarding innovation with criminal offense enforcement creates a dynamic tension. The “uproar against criminal infrastructure” language may push policymakers to balance privacy rights with anti-money-laundering goals, a debate that will likely surface in regulatory conversations and legislative proposals in the months ahead. Market participants will need to watch not only for new rules but for how agencies interpret and implement the strategy’s guardrails across different fiscal cycles and political winds.
What to watch next
- Implementation details on the post-quantum cryptography rollout and zero-trust adoption across federal information systems.
- Guidance or proposed regulations related to privacy-focused tools, mixers, and off-ramps for digital assets.
- Standards development and collaboration efforts between government agencies and crypto industry participants on secure supply chains.
- Budget allocations or policy actions that fund cybersecurity research relevant to crypto infrastructure.
Sources & verification
- President Trump’s Cyber Strategy for America (White House PDF): https://www.whitehouse.gov/wp-content/uploads/2026/03/President-Trumps-Cyber-Strategy-for-America.pdf
- Galaxy Digital’s Alex Thorn on crypto security in the strategy: https://x.com/intangiblecoins/status/2030078133303455922?s=20
- Nic Carter on quantum readiness and policy emphasis: https://x.com/nic_carter/status/2030091238742053115?s=20
- Bitcoin quantum risk discussion and institutional concerns: https://cointelegraph.com/news/bitcoin-quantum-computing-risk-institutions-developers
- Bitcoin price context referenced in coverage: https://cointelegraph.com/bitcoin-price
National Cyber Strategy reframes crypto under security and quantum guardrails
The six-page document makes it clear that the administration views cryptography, digital assets, and blockchain as components of critical national infrastructure rather than peripheral technologies. While the exact regulatory path remains to be seen, the emphasis on post-quantum readiness and secure, privacy-conscious design sets a baseline for how federal agencies intend to engage with the crypto ecosystem. Industry voices have already started parsing the strategy’s language for practical implications—ranging from research funding opportunities to potential investigations into privacy-preserving architectures and on-ramps.
The strategy’s commitment to privacy-by-design, coupled with its tough stance on combatting illicit financial activity, positions the policy as a pivot point for the sector. Whether this translates into collaboration on cryptographic standards or a tightening of enforcement around privacy tools remains to be seen. What is clear is that the policy framework now recognizes crypto and blockchain as central to national security considerations, not just speculative technologies with speculative risk profiles.
TLDR:
- Former CFO diverted $35M into DeFi lending platforms despite company policy requiring conservative investments.
- Crypto investments promising 20% yields collapsed within weeks, wiping out nearly all of the company funds.
- The software firm laid off 60 employees after the financial losses triggered a major restructuring.
- A federal court sentenced the executive to two years and ordered repayment of the full $35,000,100.
A former chief financial officer has received a two-year prison sentence after diverting $35 million in company funds into risky cryptocurrency investments.
U.S. federal prosecutors said the executive secretly transferred the money to a DeFi platform he controlled. The funds quickly collapsed in value after being placed in high-yield crypto lending protocols.
The case exposes how unauthorized crypto bets can devastate corporate finances.
CFO Moves $35M Into DeFi Lending Platforms
Nevin Shetty served as chief financial officer at a private software company beginning in March 2021. The firm raised capital to support growth and product development.
Company leadership adopted an investment policy designed to protect those funds. The policy restricted investments to conservative instruments such as money market accounts.
According to the U.S. Attorney’s Office for the Western District of Washington, Shetty helped draft that policy. However, he later transferred company funds into a cryptocurrency venture he secretly controlled.
Court records show Shetty launched a side company called HighTower Treasury in early 2022. The business had no outside customers.
Between April 1 and April 12, 2022, Shetty ordered wire transfers totaling $35,000,100 from a Chase branch near his home. The funds moved into HighTower Treasury accounts.
Prosecutors said Shetty then deployed the money across decentralized finance lending protocols. These platforms advertised yields exceeding 20 percent.
HighTower planned to return a smaller fixed payment to the software company. Shetty and his partner would keep the remaining profits.
Federal prosecutors stated the arrangement allowed Shetty to personally benefit from returns generated with company funds.
Crypto Investments Collapse Within Weeks
Initial results appeared profitable. According to court filings, the strategy generated roughly $133,000 in profits during the first month.
However, the DeFi investments soon deteriorated. Crypto market losses rapidly erased the value of the positions.
By May 13, 2022, the investment portfolio had nearly reached zero value. Almost the entire $35 million disappeared.
After the collapse, Shetty informed two fellow executives about the transfers. The company dismissed him immediately.
The financial damage forced the firm to restructure operations. Court documents state the company laid off around 60 employees after the loss.
The U.S. Attorney’s Office described the scheme as a calculated fraud carried out over several months. Prosecutors argued Shetty misled colleagues and financial institutions during the transfers.
Following a nine-day trial, a jury convicted Shetty in November 2025 on four counts of wire fraud. Federal investigators from the FBI’s Seattle field office supported the case.
A federal judge sentenced Shetty to two years in prison and ordered repayment of $35,000,100. He will serve three years of supervised release after prison.
The court also barred him from serving as a corporate officer without approval from a probation officer.
Bitcoin is firmly in the deepest phase of the bear market and the pain may worsen, according to CK Zheng, founder of crypto investment firm ZX Squared Capital.
“Bitcoin’s price is convincingly in deep bear market territory now. We expect a further 30% price drop during 2026 as the Iran war started,” Zheng told CoinDesk in an email, citing the “four-year cycle” as one of the key catalysts.
The world’s largest cryptocurrency has already nearly halved since hitting a record high of over $126,000 in October last year, according to CoinDesk data. As of writing, it changed hands at around $68,000.
The four-year bitcoin cycle
Crypto investors often talk about the “four-year cycle” – a pattern in which prices surge, crash, and then recover, centred on the quadrennial mining reward halving.
The halving, most recently implemented in April 2024, is a programmed event that halves bitcoin’s supply expansion rate every 4 years. As of today, 3.125 BTC are emitted as rewards for each block mined on the Bitcoin network, down from the original 50 BTC at launch after four halving events to date.
Historically, bitcoin’s price has tended to peak about 16–18 months after a halving, followed by a bear market that typically lasts about a year.
BTC topping out in October last year, roughly 18 months after the April 2024 halving, means the cycle is playing out again. So, the bear market could deepen in the near term.
Zheng said that the cycle is proving very difficult to break. According to him, the reason is simple: human psychology.
“The “Four-year crypto cycle” momentum is gaining strength and is extremely difficult to break due to individual investors’ psychological behaviors,” Zheng said.
Individual investors tend to behave in predictable ways — buying during hype and selling during panic. That behavior reinforces the boom-and-bust four-year pattern that has defined crypto markets for more than a decade.
Because of this, Zheng said bitcoin still trades more like a speculative asset than a safe haven like gold.
He added that the institutional adoption of bitcoin remains very slow and limited in scope at this stage and warned that some firms that have purchased bitcoin as a treasury asset may be forced to sell, leading to a deeper price sell-off.
“The total size of crypto ETFs and Digital Asset Treasury companies is only around 10% of the whole crypto market. Some Digital Asset Treasury firms may be forced to sell cryptos to meet certain debt servicing requirements during this bear market, which may create a vicious cycle,” Zheng said.
For now, Zheng’s outlook is clear: crypto’s bear market may have further to run before the next cycle begins.
“Our long-term target is $0.9000,” one analyst stated.
Ripple’s XRP has registered a minor uptick over the past week, coinciding with the broader cryptocurrency market’s revival.
However, some analysts believe its price may decline sharply in the near future and even fall below the psychological $1 level.
New Pullback Ahead?
Earlier this week, XRP tried to reclaim the $1.50 mark but failed and now trades at around $1.39 (per CoinGecko’s data). The asset’s market capitalization stands at approximately $85 billion, making it the fourth-biggest cryptocurrency, trailing behind BTC, ETH, and USDT.
One person who has been closely monitoring its performance is the X user TradingShot. In their view, XRP has been moving within a downward channel throughout its entire bear cycle, which, according to the chart, began in July 2025 – shortly after the price reached its all-time high of over $3.65.
TradingShot noted that the severe decline in February this year hit the previous target on the 1W MA200, suggesting the asset’s next potential pullback may lead to a further drop to the 1M MA100 support, set at under $0.90.
“This level is critical as it formed the June 2022 bottom of the previous Bear Cycle. Our long-term Target is $0.9000,” the X user concluded.
X user WealthManager also presented a bearish forecast. They believe XRP looks “very dangerous” right now, warning that a “huge drop could be imminent.”
Meanwhile, the prominent Bitcoin educator and advocate Adam Livingston spoke sharply against Ripple’s native cryptocurrency. He said he would rather have $100,000 in FTX customer refund claims than $100,000 in XRP.
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“At least SBF might send a heartfelt apology from prison before he dies of old age,” Livingston added.
The Bullish Scenario
Despite the pessimistic views some express toward XRP, many indicators suggest its price may head north soon. Numerous market observers pointed out that large investors have purchased almost 4.2 billion tokens (worth a whopping $5.7 billion at current rates) since the October 10 crash.
This development reduces the amount of XRP tokens available on the open market, and economic principles dictate that the valuation should rise if demand doesn’t diminish. Moreover, this shows that whales are confident in the asset and view lower prices as an opportunity, a signal that could encourage smaller players to follow suit.
XRP’s exchange netflow is next on the list. Over the past several weeks, outflows have consistently exceeded inflows, indicating that investors are moving their holdings off centralized platforms and into self-custody. This shift reduces the amount of coins immediately available for sale, easing short-term selling pressure.
The asset’s Relative Strength Index (RSI) is also worth mentioning. It has fallen to around 30 on a weekly scale, marking oversold territory that can sometimes be a precursor to a rally. On the other hand, ratios above 70 are considered bearish.
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Crypto industry executives are combing through US President Donald Trump’s National Cyber Strategy after it was released on Friday, searching for hints about what it could signal for government support of the crypto industry.
“Crypto and blockchain are explicitly named as technologies to be ‘protected and secured.’ This is a first for any US cybersecurity strategy,” Galaxy Digital’s head of firmwide research Alex Thorn said in an X post on Friday.
Crypto and blockchain were mentioned once in the six-page report:
“We will build secure technologies and supply chains that protect user privacy from design to deployment, including supporting the security of cryptocurrencies and blockchain technologies.”
However, industry executives have also been interpreting other parts of the document to see how they relate to crypto.
Thorn pointed to a section pledging to “uproot criminal infrastructure and deny financial exit and safe haven.” “This language could easily justify crackdowns on mixers, privacy coins, and unregulated off-ramps,” he said.
Bitcoin VC points out that quantum has been taken “seriously”
Castle Island Ventures founder Nic Carter, who has been vocal about the threat of quantum computing to Bitcoin (BTC) in recent times, pointed to the section saying the government “will accelerate the modernization, defensibility, and resilience of federal information systems by implementing cybersecurity best practices, post-quantum cryptography, zero-trust architecture, and cloud transition.”
“Sure seems like they’re taking quantum seriously. Nothing to worry about, I’m sure,” Carter said in an X post.
It comes as the crypto industry continues to debate about how close quantum computing is to being a serious threat to Bitcoin. On Feb. 15, Carter said that major Bitcoin-holding institutions may eventually lose patience with Bitcoin developers for not addressing quantum computing concerns quickly enough.
Trump points to the next generation as a priority
Trump said that the National Cyber Security outlines his priorities for “ensuring that America remains unrivaled in cyberspace.” Artificial intelligence was a key focus of the report.
“We will secure the AI technology stack—including our data centers—and promote innovation in AI security,” it said.
Related: Community banks and crypto industry ‘are allies’ in CLARITY Act debate: Exec
Trump also emphasized the importance of recruiting the next generation of workers in the cyber workforce to “design and deploy exquisite cyber technologies and solutions.”
The US typically releases a national cybersecurity strategy every administration, outlining the government’s priorities for emerging technologies.
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