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A federal judge agreed to pause an ongoing lawsuit between 18 state attorneys general and a decentralized finance lobbyist group against the U.S. Securities and Exchange Commission (SEC) on Wednesday, after the parties noted the SEC’s new leadership.

The state AGs, all Republicans, filed the lawsuit alongside the DeFi Education Fund last November after Donald Trump’s win in the 2024 presidential election. They allege that the federal securities regulator had exceeded its authority in filing lawsuits against crypto exchanges. In Wednesday’s filing, the SEC suggested that Paul Atkins’ confirmation as the new agency chair could end the litigation.

“As support, the Defendants state that due to a leadership transition in the Securities and Exchange Commission, this case could potentially be resolved,” the filing said.

The judge ordered the parties to file a joint status report within 30 days but paused all deadlines for 60 days.

Originally, the lawsuit argued that the SEC’s enforcement actions were intruding on state regulators’ abilities to police digital asset firms within their own borders.

“Some States, for instance, have enacted regulatory regimes for financial institutions focused on digital assets; others have required digital asset platforms to obtain money-transmitter licenses and security bonds to guarantee liquidity,” the lawsuit said.

“While state regulatory approaches have varied in accordance with local needs, they have consistently endeavored to provide transparent and administrable rules of the road. And Congress has repeatedly declined proposals to give federal agencies broad regulatory power over digital assets.”

Congress is expected to pick up market structure legislation that may address federal regulators’ roles in overseeing crypto this year, and key committees have already begun holding hearings.

In the meantime, the SEC has already dropped investigations and lawsuits into more than a dozen companies and paused lawsuits against a few others.

IRS broker rule

A separate lawsuit filed by the DeFi Education Fund, the Texas Blockchain Council and the Blockchain Association against the Internal Revenue Service was also dropped on Wednesday. This lawsuit argued that the IRS’ DeFi broker rule went beyond the agency’s authority.

Trump signed a joint House and Senate resolution under the Congressional Review Act nullifying this rule last week — the first legislative item addressing crypto that he signed as president.

In a filing Wednesday, the parties said the lawsuit had become “moot” after Trump’s signing the resolution.

A modest bitcoin rally to a possible challenge of the $86,000 level quickly reversed during U.S. afternoon trading hours on Wednesday as Federal Reserve Chairman Jerome Powell warned on the effects of President Trump’s tariff regime.

“The level of the tariff increases announced so far is significantly larger than anticipated,” said Powell in a speech. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”

In other words, stagflation — a throwback to a sizable portion of the 1970s when the U.S. experienced weak economic activity alongside double-digit inflation.

“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” continued Powell.

The price of bitcoin (BTC) fell about 2.5% in the minutes following the Powell remarks, now trading at $83,700, down 1.5% over the past 24 hours.

U.S. stocks, which had been trying to mount a comeback from opening declines, also were hit, the Nasdaq slumping 3.4% to a session low.

Welcome to The Protocol, CoinDesk’s weekly wrap-up of the most important stories in cryptocurrency tech development. We’re Margaux Nijkerk and Sam Kessler, reporters on CoinDesk’s Tech team.

In this issue:

Can Ethereum Be Truly Private? Developers Push for Encrypted Mempool, Default Privacy

Nvidia Moves AI Supercomputer Production to U.S., Opening New Avenues for Crypto Miners

MIT-Incubated Optimum Raises $11M Seed Round to Build Web3’s Missing Memory Layer

Noble’s New ‘AppLayer’ Lets Developers Build Stablecoin Tools on Celestia

This article is featured in the latest issue of The Protocol, our weekly newsletter exploring the tech behind crypto, one block at a time. Sign up here to get it in your inbox every Wednesday.

Network News

PRIVACY HEATS UP AMONG ETHEREUM DEVS: When the U.S. government sanctioned the Ethereum-based crypto mixing service Tornado Cash in 2022, it ignited a debate within the crypto community that continues three years later. Advocates argued that complying with the sanctions amounted to censorship — undermining a fundamental cypherpunk principle. President Donald Trump supported the cypherpunks and lifted the sanctions on Tornado Cash in March of this year, but for some Ethereum developers, the situation highlighted a flaw within the network that still exists today: Why should users depend on third-party apps to transact privately on the network? Perhaps emboldened by the recent Tornado Cash developments, Ethereum developers and researchers have once again begun discussing ideas for making the Ethereum network private at its core. “Privacy must not be an optional feature that users must consciously enable — it must be the default state of the network,” said PCaversaccio, whose post outlined his vision for a privacy-oriented Ethereum roadmap. “Ethereum’s architecture must be designed to ensure that users are private by default, not by exception.” In response to PCaversaccio’s post, Ethereum co-founder Vitalik Buterin left a comment on the network’s main developer forum with his own much shorter privacy-oriented Ethereum roadmap. Buterin suggested focusing on privacy for on-chain payments, anonymizing on-chain activity within applications, making communication on the network anonymous, and privatizing on-chain reads. To achieve all of this, Buterin listed various steps like integrating certain third-party privacy features into the core network. — Margaux Nijkerk and Sam Kessler Read more.

NVIDIA AI SUPERCOMPUTER PRODUCTION PLANS COULD BENEFIT CRYPTO MINERS: Nvidia plans to manufacture its next generation of AI chips and supercomputers entirely in the U.S. for the first time, the company said in a statement. The move reflects rising demand for AI infrastructure and a broader push to localize advanced tech manufacturing — one that could also benefit crypto miners repurposing their facilities for AI and high-performance computing (HPC). Many of these operators already have access to the large-scale power and cooling systems needed for data center operations, making them potential players in the growing AI economy. Crypto miners, once singularly focused on hashing power, are increasingly looking for ways to fit into the AI and HPC supply chain. Their existing access to power-dense infrastructure and logistical experience in running industrial-scale operations gives them a foothold as demand for AI computation surges. Recent tariffs by U.S. President Donald Trump, however, is causing anxiety among miners as the policy changes are expected to raise costs on ASIC miners, electrical components, networking hardware and more.— Helene Braun Read more.

MEMORY LAYER OPTIMUM RAISES $11M IN SEED: Optimum, a decentralized, performance-enhancing memory layer for any blockchain, raised an $11 million seed round, inviting its creators from institutions like Harvard and MIT to jump from the world of academia into the commercial crypto arena. The seed round was led by 1kx with participation from Robot Ventures, Finality Capital, Spartan, CMT Digital, SNZ, Triton Capital, Big Brain, CMS, Longhash, NGC, Animoca, GSR, Caladan, Reforge and others. ​​Optimum is building what it calls the missing memory layer of blockchains, making the way data is stored, accessed and propagated, faster, cheaper and truly decentralized, according to a press release. At the core of Optimum’s innovation is a method of decentralized coding for distributed systems, known as Random Linear Network Coding (RLNC), developed by Muriel Médard, an MIT professor. — Ian Allison Read more.

NOBLE’S NEW ‘APPLAYER’ LETS DEVELOPERS BUILD STABLECOIN APPS ON TOP OF CELESTIA: Noble, a blockchain for issuing real-world assets (RWA) and stablecoins, announced Wednesday that it will expand its platform by introducing “AppLayer,” an Ethereum-compatible rollup that allows developers to create their own RWA applications and infrastructure. Noble’s AppLayer aims to let developers build new financial tools optimized for real-world assets like stablecoins — digital assets whose value is pegged to another asset, like the U.S. dollar. AppLayer will leverage Celestia, a data availability blockchain that aims to bring down storage costs for data-intensive blockchain networks. Celestia, like Noble, is plugged into the Cosmos blockchain ecosystem and is compatible with the Ethereum Virtual Machine (EVM), meaning it can read smart contracts from other Ethereum-based chains. — Margaux Nijkerk Read more.

In Other News

Mantra’s OM token fell from over $6 to under $0.45 in a matter of hours on Tuesday with no apparent catalyst. CEO John Mullin said in an X post on Wednesday that he would burn his team’s tokens to win back the trust of the Mantra community. Mullin said the price drop resulted from exchanges closing OM positions, but members of the crypto community cast blame on the Mantra team. OKX founder Start Xu referred to the incident as “a big scandal.” — Jamie Crawley Read more.

Aiming to perhaps replicate Strategy’s bitcoin (BTC) playbook, except with solana (SOL), fintech commercial real estate platform Janover (JNVR) has built a SOL stack worth roughly $21 million and seen its share price rise nearly 20-fold in less than a month. The company purchased earlier this week another 80,567 SOL tokens valued at approximately $10.5 million, bringing its total holdings to 163,651. — Krisztian Sandor Read more.

DWF Labs is investing $25 million in World Liberty Financial (WLFI), the decentralized finance protocol backed by U.S. President Donald Trump and his family. The crypto market maker is also entering the U.S. market with a new office in New York City as part of its broader expansion plans, according to a press release. — Francisco Rodrigues Read more.

Regulatory and Policy

The Securities and Exchange Commission (SEC) is not yet ready to make a decision on two critical features that issuers of the spot crypto exchange-traded funds (ETFs) are hoping to add to their products. The regulator delayed a decision on whether it will allow in-kind redemptions for WisdomTree’s Bitcoin Fund (BTCW) and VanEck’s Bitcoin Fund (BITB) and Ethereum Fund (ETHW). It also moved its deadline for a decision in regards to a proposal by Grayscale to allow staking its Ethereum Trust (ETHE) and Mini Ethereum Trust (ETH), which the asset manager’s exchange, NYSE Arca had requested in February. — Helene Braun Read more.

Seychelles-based cryptocurrency exchange OKX is expanding to the U.S. and establishing a new regional headquarters in San Jose, California. The exchange will rolling out access to its platform and its native OKX Wallet to U.S.-based crypto traders.— Cheyenne Ligon Read more.

Search giant Google will only allow cryptocurrency exchanges and software wallets to advertise in the European Union if they hold a license under the EU’s Markets in Crypto-Assets (MiCA) regulation, starting April 23, the company announced. Google said advertisers must now obtain a certification from the company and demonstrate they are registered as a Crypto-Asset Service Provider (CASP) under MiCA. The company also requires advertisers to comply with any additional country-specific legal obligations.—Francisco Rodrigues Read more.

Calendar

April 30-May 1: Token 2049, Dubai

May 14-16: Consensus, Toronto

May 19-23: Solana Accelerate, New York City

May 20-22: Avalanche Summit, London

May 27-29: Bitcoin 2025, Las Vegas

June 30-July 3: EthCC, Cannes

Oct. 1-2: Token2049, Singapore

Eric Trump, U.S. President Donald Trump’s second son, is set to appear at this year’s Consensus conference to discuss his vision to reshape bitcoin mining in the United States.

Trump will talk about American Bitcoin, a new venture formed with Hut 8 where he serves as Chief Strategy Officer. 

“The launch of American Bitcoin represents a transformative moment for Bitcoin mining in North America,” said Trump in a statement. “I am so proud to finally unveil our bold vision for this initiative, which we believe will become the world’s largest and most efficient pure-play Bitcoin miner.”

Launched on March 31, American Bitcoin said it aims to become the world’s largest pure-play Bitcoin miner, targeting over 50 EH/s of mining capacity.

Eric Trump is scheduled to speak on May 15 at Consensus 2025, which takes place in Toronto May 14-16.

Consensus, which is organized by CoinDesk, is known as the longest-running conference in the digital assets industry, with attendance regularly topping 15,000 people. This year’s event will be at the Metro Toronto Convention Centre in downtown Toronto.

American Bitcoin is one of several crypto ventures launched by the Trump family. Eric Trump also backs World Liberty Financial, a DeFi protocol and planned blockchain-based marketplace where users can borrow and lend cryptocurrencies, create liquidity pools and trade stablecoins. In March, WLFI announced that it plans to launch its own stablecoin, USD1, with BitGo providing custody services.

In addition, Eric Trump is also an advisor to Metaplanet, the largest holder of bitcoin in Japan, which is following a Michael Saylor/Strategy-type bitcoin treasury model. He’s also an advisor to Dominari Holdings, a wealth management firm, which in March disclosed that it had bought $2 million of BlackRock’s iShares Bitcoin Trust (IBIT) shares.

Eric Trump told CNBC this month that the Trump Organization was drawn to crypto after being “debanked” by several financial groups during the Biden Administration. “It actually is what drove us toward cryptocurrency,” he said.

“You realize that cryptocurrency was a lot faster, it was a lot more pragmatic, it was a lot more transparent, it was exponentially cheaper.”“At this point, I know almost everybody in the industry in some way, shape or form,” he told CNBC. “I fell in love with the industry, you know, a few years ago, and really dove head in.”

Eric Trump’s crypto interventions haven’t all been successful. In February, Trump tweeted it was a “good time to add” ether (ETH), which was trading around $2,700 at the time. At press time it is trading around $1,500.

Bitcoin was born as a response to institutional failure, a decentralized escape hatch from corruptible centralized finance and a north star of self sovereignty. Bitcoin’s true vision was a peer-to-peer electronic cash system. That phrase is right there in the Bitcoin white paper’s title from Satoshi himself.

You’re reading Crypto Long & Short, our weekly newsletter featuring insights, news and analysis for the professional investor. Sign up here to get it in your inbox every Wednesday.

Today, Bitcoin is many things:

A store of value

A form of digital gold

A macro asset

But Bitcoin is not electronic cash. It is too volatile for daily use, too slow to scale and too rigid to adapt as a cash equivalent. Somewhere along the way, Bitcoin gave up on being the system, and instead became the signal.

Ethereum, by contrast, might be the one actually delivering on Bitcoin’s original promise.

Thanks to Ethereum’s programmability, we now have stablecoins, arguably the most successful crypto use case to date. Dollar-backed tokens like USDC and USDT settle trillions in peer-to-peer value across borders 24/7 with no bank intermediaries. Stablecoins are Bitcoin’s white paper come to life, minus the volatility.

Ethereum’s scale can be shown through on-chain data.

Stablecoins on Ethereum and its Layer 2s now rival the transaction volume of major credit and debit card networks. In markets where local currencies are unstable or financial access is limited, stablecoins have become lifelines. They are used for remittances, payroll, savings and even commerce.

The irony is that Bitcoin wanted to replace fiat, but it’s Ethereum that has quietly made fiat better. It gave the dollar superpowers like composability, programmability and global mobility. And it’s doing it without centralized permission.

Here’s the kicker: Ethereum’s evolution doesn’t stop at payments. Once you understand the technology, you realize ETH does everything BTC can do, and so much more.

Where Bitcoin remains focused on scarcity, Ethereum is building infrastructure. The rise of real-world asset tokenization (RWAs) is a perfect example. Treasury bills, private credit and fund shares are now being issued on Ethereum, bringing regulated assets into composable finance. BlackRock, Franklin Templeton and other legacy giants aren’t launching on Bitcoin; they’re building on Ethereum.

Additionally, unlike Bitcoin’s inert capital, Ethereum enables native yield through staking, allowing participants to secure the network while earning predictable returns — an increasingly attractive feature for institutions seeking on-chain cash flow.

This isn’t to say Bitcoin has failed. It serves a different role: a monetary anchor in the digital world. But its utility is limited. Ethereum, on the other hand, is becoming the global settlement layer for on-chain assets.

While Bitcoin adoption has captured mainstream headlines, Ethereum’s fundamentals quietly continue to grow as the platform gains institutional market share. Some metrics to back up Ethereum’s growing influence and usage include:

Developer activity

Stablecoin usage

Real-world adoption

Ethereum isn’t replacing Bitcoin. But it’s fulfilling what Bitcoin started: a decentralized, global financial system with open access and programmable trust — in short, digital cash. Bitcoin sparked the movement. But Ethereum is scaling it.

For further information, please click here to view Advantage Blockchain’s last quarterly report.

The first quarter of 2025 was a reality check for digital assets. While the year began with optimism fueled by the election of a pro-crypto U.S. president and expectations of a friendlier regulatory environment, macroeconomic challenges quickly came to dominate the narrative. Bitcoin briefly reached a new all-time high of $109,356 before ending the quarter down 11.6%, its second-largest quarterly decline since Q2 2022. Altcoins fared worse, with indices more heavily weighted toward smaller-cap tokens such as the CoinDesk Memecoin Index (CDMEME) and the CoinDesk 80 (CD80) declining by 55.2% and 46.4%, respectively.

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Beneath the surface, a more fundamental shift is playing out. The gap between bitcoin and the rest of the market continues to widen, driven in large part by institutional behavior. As outlined in our latest Digital Assets Quarterly Report, institutions are playing an increasingly decisive role in shaping capital flows, preferring liquid and regulated large-cap assets. This shift is pushing the digital asset market toward more structured, benchmark-driven strategies.

One of the clearest signs of this realignment comes from bitcoin dominance, which expresses bitcoin’s total market capitalization as a percentage of the market capitalization for all cryptocurrencies combined. This figure rose to 62.2% in Q1, its highest level since February 2021. Notably, this increase occurred despite a 26.9% drop in bitcoin’s total market capitalization from its January peak. Our latest chart of the week highlights this trend, showing how capital rotated out of speculative assets and into bitcoin as macro volatility and geopolitical uncertainty mounted.

The CoinDesk 20 Index (CD20) has emerged as a useful lens for tracking this institutional shift. While the index fell 23.2% in Q1, it significantly outperformed most major digital assets. XRP was the only CD20 constituent to post a positive return, rising 0.4% in the quarter, driven by the dismissal of the SEC’s case against Ripple, as well as strong growth in its RLUSD stablecoin. RLUSD’s market cap surged 323% in Q1 to reach $245 million, while cumulative trading volumes exceeded $10 billion in just over three months.

By contrast, ether fell 45.3% — underperforming most major assets amid continued migration of user activity to Layer 2s and a lack of positive catalysts. U.S. spot ETH ETFs saw net outflows of $228 million in Q1, compared to net inflows of over $1 billion for bitcoin ETFs. The ETH/BTC ratio declined to 0.022, its lowest level since May 2020, reinforcing the shift in relative dominance this cycle.

Bitcoin’s broader role as a macro asset also continued to gain traction. In addition to strong ETF flows, public companies added nearly 100,000 BTC to their holdings in Q1, representing a 34.7% increase. This brought the total held by such companies to 689,059 BTC — equivalent to more than $56.4 billion at current prices. The launch of the U.S. Strategic Bitcoin Reserve, along with the introduction of a broader Digital Asset Stockpile by the Treasury, further underscored bitcoin’s growing legitimacy within U.S. policy.

Looking to Q2, the tone in markets has improved following the recent pause in new tariff measures. Risk assets responded favorably, and altcoin ETF optimism remains high. Nearly 40 spot ETF applications for altcoins were submitted in Q1 alone, led by those for Solana and XRP, which each had eight filings. Other assets applying for spot ETFs included Litecoin, Dogecoin and Polkadot. With Solana futures now live on the CME, the precedent for institutional-grade altcoin exposure continues to build.

The first quarter offered a reminder that digital assets are no longer moving in isolation. As macro conditions evolve and policy shifts begin to reshape the regulatory environment, capital is consolidating into assets with deeper liquidity, stronger narratives and institutional relevance. Bitcoin’s rising dominance, shifting ETF flows and the fragmentation of altcoin performance all point to a market recalibrating around structural factors rather than sentiment alone.

For a deeper dive into these dynamics, including full index performance and constituent insights, you can access the full Digital Assets Quarterly Report here.

Novel decentralized finance (DeFi) protocol Neutrl aims to bring a hedge fund trade — once limited to sophisticated investors — to the masses in the form of a crypto token.

The protocol is launching its NUSD “synthetic dollar” token, designed to generate returns by arbitraging discounted altcoin deals in over-the-counter (OTC) markets, the team told CoinDesk in an exclusive interview.

Neutral also raised $5 million in seed funding led by digital asset private marketplace STIX and venture firm Accomplice. They were joined by Amber Group, SCB Limited, Figment Capital and Nascent alongside a range of crypto angel investors including Ethena founder Guy Young and derivatives trader Joshua Lim of Arbelos Markets, recently acquired by FalconX.

Tokenized hedge fund strategy

Neutrl is the latest entrant to the rapidly growing roster of protocols that offer hedge fund-like investment strategies wrapped into a token with a stable price, often called “synthetic dollar.” $6 billion DeFi protocol Ethena spearheaded the trend, offering yield to token holders via holding spot cryptos and shorting perpetual futures, farming the funding rate.

Read more: Resolv Labs Raises $10M as Crypto Investor Appetite for Yield-Bearing Stablecoins Soars

Neutrl’s structure is built around buying locked altcoins at discounts in private markets, then hedging exposure with perpetual futures. For example, a trader might acquire Solana’s SOL or Avalanche’s AVAX at a 20% discount from a foundation and simultaneously open a short position for the token. The return comes from the price gap, not market movement.

This is a popular hedge fund investment strategy producing high double-digit yields to sophisticated investors who don’t want to take directional bets on crypto prices, Neutrl co-founder Behrin Naidoo explained in an interview.

But, instead of managing these trades manually, Neutral users can hold a single token—NUSD—that encapsulates the strategy, opening access to a broader set of investors, he said.

With a flood of altcoin unlocks over the next few years, Neutral estimates that there’s a $10 billion market for locked up tokens. This offers an attractive yield opportunity for investors, especially now when crypto yields in decentralized finance compressed to multi-year lows, Naidoo said.

Neutrl is targeting to grow to $2 billion in assets in the two years, he added.

The performance of bitcoin (BTC) mining stocks was mixed in the first two weeks of April, with pure play operators outperforming those with exposure to high-performance computing (HPC), JPMorgan (JPM) said in a research report Wednesday.

Only MARA Holdings (MARA) and CleanSpark (CLSK) outperformed the largest cryptocurrency during the period, while miners with exposure to HPC, which is used in applications including AI, such as Bitdeer (BTDR), TeraWulf (WULF), IREN (IREN) and Riot Platforms (RIOT) underperformed.

The bank noted that March was a good month for the U.S.-listed miners. They added 15 exahashes per second of capacity, and mined more tokens. The first two weeks of April were not as positive.

“Network hashrate growth outpaced U.S. operator expansion, and average bitcoin price declined over the first half of April, which has pressured mining economics,” analysts Reginald Smith and Charles Pearce wrote.

The bank estimated that U.S.-listed miners are currently trading around 1.2 times their proportional share of the four-year block reward opportunity, which is the lowest level in more than 2 years.

Miners earned about $41,500 in daily block reward revenue per EH/s in the first two weeks of the month, a 12% decline from March, the report said.

The network hashrate has risen 85 EH/s month-to-date to an average of 900 EH/s, the bank noted. The hashrate refers to the total combined computational power used to mine and process transactions on a proof-of-work blockchain, and is a proxy for competition in the industry and mining difficulty.

The total market cap of the 13 U.S.-listed bitcoin miners that the bank tracks fell 2% to $16.9 billion in April.

Read more: Bitcoin Mining Profitability Down 7.4% in March as Prices, Transaction Fees Fell: Jefferies

Crypto exchange Coinbase (COIN) is facing a weaker outlook as uncertainties introduced by President Donald Trump’s on-and-off tariff threats cast a shadow over retail crypto activity, analysts at Oppenheimer wrote in a report.

The investment bank cut its full-year trading volume forecast by 19% to $1.3 trillion and its first-quarter estimate to $380 billion, down 13% from the previous quarter as the appetite for risk declined.

Despite a generally more supportive tone from Washington — with pro-crypto signals from the White House, Congress and regulators — the analysts said the market hasn’t fully embraced the shift.

“Since the election, we have seen the most pro-crypto President, Administration, Congress, regulators, executive orders, and SEC statements, that are meant to signal to the world that the US is open for blockchain businesses to attract capital, projects, and talents,” analyst Owen Lau wrote. “During the process for the public to believe in such a day-and-night move, it’s unfortunate to see Trump’s on-and-off again tariffs have driven bear market concern, recession fear, and pullback of retail trading,”

Coinbase stock has fallen 30% this year, underperforming bitcoin (BTC) and the S&P 500, which are down 10% and 8%, respectively. While those numbers mark an improvement from the 2022 downturn — when COIN dropped 86% — they still highlight the platform’s sensitivity to broader macro signals.

Oppenheimer also lowered its 2025 and 2026 forecasts for revenue and earnings and cut its shares price target to $279 from $388, saying that retail participation may remain subdued during the policy uncertainty. It has an outperform rating on the shares, which fell 1.2% to $173.39 on Wednesday.

One upside: market share. Coinbase accounted for 69% of U.S. spot crypto trading volume in February, gaining ground against rivals like Robinhood (HOOD). Maintaining that lead will depend on whether the market can shake off tariff jitters and regain momentum.

Oppenheimer said despite the near-term hurdles, it remains optimistic about Coinbase’s long-term potential.

“As a focused leader in crypto with optionality in tokenization and payments use cases, we believe COIN can command a premium. In our view, COIN is a strong rebound stock if/when tariff tensions deescalate,” Lau wrote.

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.

Where’s the bottom for bitcoin (BTC)?

While acknowledging it’s possible that level has already been hit, on-chain analyst James Check suggested a true bottom may not be in place until after bitcoin suffers a true capitulation event.

That would likely require a decline to the $65,000 area, said Check, calling it the “true market mean,” i.e., the average cost basis for active investors.

At that point according to Check, who spoke on the TFTC podcast, the average investor may begin to feel the pressure of unrealized losses. Even long-term holders, including those who have held bitcoin for five years, could find themselves underwater. Interestingly, this price level aligns closely with Michael Saylor’s Strategy, which has a similar cost basis of around $67,500.

Where does capitulation take the market?

While Check expects sizable declines from the $65,000 area, he sees strong support in the $49,000-$50,000 range, those prices representing the launch of the ETFs in 2024 as well as a $1 trillion market cap for bitcoin. A drop to as low as $40,000 seems unlikely, he said, barring a global recession.

Check also took note of the extended period of “chopsolidation” in 2024 — where bitcoin traded for months in a wide range between $50K and $70K — as establishing a strong foundation of support.