Macro Update

Bitcoin shook off last week’s geopolitical jitters, quickly recovering from $100K to $105 early in the week before grinding higher to the $107K range, where it held a tight band (~1.3% through Sunday, briefly crossing $108K.

The tight trading range since Wednesday translates into the Bitcoin volatility index (DVOL) continuing to drop, trading very low (38.84), as we cap off the last full week of trading before the summer months, with implied volatility now in the 1st percentile, among the lowest levels recorded this year.

The market looked past recent geopolitical and macro headlines, even as Iran-Israel tensions persist. Last week’s flare up sparked serious concerns, which seemed to be temporary as the U.S. quickly got involved with a ceasefire negotiation.

Meanwhile other macro events, like hotter-than-expected U.S. PCE inflation (2.7% vs 2.6% cons.), J.Powell’s congress hearing, and the Canadian trade talks collapsing, did little to shake the market. With recession odds appearing lower and liquidity conditions expected to ease into year-end, markets seem to be shifting away from broad macro overhangs.

Instead, price action is increasingly being driven by idiosyncratic, project level catalysts as narratives seem to become somewhat more micro-focused with headlines like Wormhole’s (+41% WoW) XRP integration and renewed Solana (+17% WoW) staking ETF chatter helping to drive rotation and activity across individual tokens.

The Solana move follows news that REX Shares is set to launch the first-ever Solana staking ETF, with analysts noting the SEC appears comfortable with its rare c-corp structure. ETF analyst Eric Balchunas confirmed the updated prospectus is complete, calling it “all systems go” for launch, a milestone the industry had long anticipated, with staking features in ETFs seen as a key next step for crypto’s integration into public markets.
Finally, zooming out across the broader market, mid caps (GMMID +18.4%) led this week’s recovery followed by small caps (GMSMALL +15.4%). Looking within the sectors, we see continued outperformance of DeFi (+18.3%) with a notable recovery in Gaming (GMGM +18.5%) and AI (GMAI 17.11%) after a more meaningful selloff earlier this month. Still, most sectors remain in the red on a 30-day basis, signaling the rebound is more tactical than

Our take:

“As BTC volatility pulls back, project announcements and partnerships are having an impact on markets again after we move on from geopolitics and monetary policy”

As we slide into the summer months, Bitcoin volatility dropped to multi-month lows, creating a potential calmer backdrop for price action. With geopolitical concerns and rate policy largely absorbed, investor focus is turning back to project-specific developments. Announcements, partnerships, and ETF inflows/outflows are driving markets more meaningfully than over the past few weeks.

Polymarket Raising $200m At $1b Valuation

Two large prediction markets disclosed a capital round this week. The centralized platform Kalshi announced a  $180m round at $2b valuation and while blockchain based Polymarket is reportedly raising $200m at a $1billion valuation, and in doing so puts it on track to become the latest crypto unicorn. The round is led by Pieter Thiel’s Founder Fund, an existing investor.

After a drought post the 2021 bull run, it looks like capital is flowing back into equity of crypto assets. Not only only on the public site in the likes of Circle, Coinbase, and accumulators but we’re seeing meaningful activity on the private side as well with deals like OG Labs ($357m), Monad ($244m), Athena Labs ($100m), Bitwise Invest ($70m) and LayerZero Core ($55m) all closing rounds this year.

Nine months after Polymarket rose to fame in the runup to the U.S. election, the successful crypto-based prediction market is raising capital for its next growth leg as crypto equity-capital markets are heating up.

Our take:

Polymarket being close to raising $200 million shows confidence, as supported by onchain metrics, that PM is able to continue growth post its 2024 U.S. election tailwinds”

After gaining attention during the 2024 U.S. presidential election, when it not only saw a sharp increase in activity but also managed to call the result hours before most major media outlets, it cemented its reputation as a serious player in the prediction markets space.

After gaining attention during the 2024 U.S. presidential election—when it not only saw a sharp uptick in activity but also managed to call the result hours before most major media outlets—the platform cemented its reputation as a serious player in the prediction markets space.

Recent analysis shows Polymarket has good predictive value, with  markets’ implied probabilities aligning closely with real-world outcomes across multiple timeframes, up to a month in advance. 

This predictive strength reflects the power of real-time, financially-incentivized crowd insights, an edge likely to grow with broader participation. Though still largely unmonetized, it offers clear potential for future commercialization as the platform matures.

“So how does Polymarket move on from the U.S. 2024 elections?” That was the big question six months ago, after $1.54 billion, or 61% of total monthly volume, came from election markets in October alone. Many expected platform activity to fade once the election passed. The concentration was even clearer when looking at individual wallet activity with fewer than 10% of wallets during 2H24 not engaging in election-related bets. 

As shown below, since then Polymarket has broadened its scope, from F1 to commodities and geopolitics, and kept its user base engaged, increasing that share to 30% during 2025, all without meaningful growth in active wallets.

Onchain activity shows that Polymarket has moved beyond the 2024 election spike and is now showing promise in broader predictions. Whether it’s Polymarket or someone else, it’s clear prediction markets are showing signs of resilience and maturation as they go mainstream. 

Chainlink And Mastercard Partnership

This week, Chainlink and Mastercard announced a partnership with Zerohash, Swapper Finance, Shift4 Payments, and XSwap, while leveraging the Uniswap protocol to allow cardholders to purchase crypto assets directly onchain. The modular nature and combination of centralized and decentralized components in the partnership is the most interesting part, as both converge into a new wave in fintech applications.
Going forward, we expect to see more of these partnerships, as blockchain-based consumer financial applications are built across three layers: orchestration, asset, and infrastructure, each combining centralized and decentralized components, as shown below.

The inclusion of Uniswap as liquidity provider on the asset layer is the most interesting inclusion. It’s clear that Uniswap’s recognized liquidity, combined with its emphasis on distribution and partnerships outside its own frontend (Uniswap labs), is paying off.

Our take:

“Uniswap is turning into a foundational liquidity layer for a new wave of blockchain-based financial applications."

The next leg of fintech innovation, sometimes called Open Finance (OpenFi) or Fintech 4.0, will include blockchain and decentralized components to offer low-cost, modular services with deeper functionality across payments, investing, remittances and more. Uniswap’s inclusion in this partnership is evidence of this.

Uniswap is no longer just a raw DeFi primitive with its own basic UI. It now seems well-positioned to take part in this new wave of innovation as the backbone or P2P liquidity layer. Early signs already point to a pivot in that direction.

Starting by looking at the average trading size per user over time, we see a sharp drop to $3.6K today, a ~94.8% decrease from its 4Q21 peak. At the same time, user numbers surged, especially in the past year, as Uniswap expanded through partnerships and deeper integration. Combining both observations tells us that new Uniswap users are trading smaller avg. tickets, hinting to an increased portion of users being retail/consumers.

Further evidence lies in the changing composition of flows. Since the introduction of L2s and low-cost chains, the share of ETH-based transactions has steadily declined, while average trading volume per user has dropped. 

With lower fees, users are no longer forced to trade in larger sizes to justify gas costs, unlocking usage involving smaller, more frequent transactions typical of retail behavior. At the same time, broader asset usage suggests deeper engagement across dApps.

As shown below, average trading volume on Uniswap started dropping as soon as it rolled out on L2s. Today, transactions settled on Ethereum L1 only make up ~3.7% of total tx volume.

Finally, to benchmark this shift, we compare Uniswap to PancakeSwap, a platform known for strong retail activity. At its peak in November 2021, Uniswap’s average transaction size per trade was 31.9x larger than PancakeSwap’s. Since then, it has steadily declined to near parity, while PancakeSwap’s levels remained stable, showing that Uniswap has fully gravitated toward a more retail-like profile.

In short, Uniswap is no longer just a liquidity layer. Even at first glance, there is growing evidence it's evolving into a potential foundational layer for the next generation of consumer-facing crypto financial services, catering increasingly to everyday usage, not just institutional or DeFi-native flows.