Macro Update

Last week, Bitcoin dropped to around $100,500 following a public fallout between President Trump and Elon Musk. The drop triggered $950 million in liquidations, the largest since April’s tariff-related decline, before rebounding to $105,700. Following his $100 million liquidation in late May, perp trader James Wynn faced another setback, losing an additional $3 million on a new leveraged BTC position. Meanwhile, spot Bitcoin ETFs experienced $131 million in outflows. In contrast, spot Ether ETFs saw $281 million in weekly inflows, continuing a 14-day streak, the longest in 2025.

JPMorgan advanced its crypto services last week, accepting crypto ETF shares (like IBIT) as loan collateral, building on its recent decision to allow clients to invest in Bitcoin. Additionally, the bank is exploring a joint stablecoin initiative with Bank of America and Citigroup, pending stablecoin regulatory advancements. 

Strategy bolstered its Bitcoin reserves with a $75 million purchase of 705 BTC, raising its total to 580,955 BTC at an average cost of $70,020 per Bitcoin. As highlighted last week, corporate crypto adoption extends beyond Bitcoin, exemplified by Nasdaq-listed Classover Holdings’ $500 million convertible note deal, with up to 80% allocated to SOL purchases. The announcement, which follows a prior $400 million equity agreement for SOL purchases, sparked a 40% stock surge, mirroring recent enthusiasm for crypto-aligned stocks like Sol Strategies and Strategy.

On Wednesday, the Ethereum Foundation unveiled a new treasury policy, shifting from seemingly sporadic Ethereum sales, which are often picked up on-chain. The policy focuses on more strategic budgeting and is backed by 94,000 ETH alongside  $130 million in fiat. As part of the move, they will cut annual spending caps from 15% to 5% over a period of five years, and pledged to maintain a 2.5-year fiat runway. Amid scrutiny over governance, roadmap volatility, and price performance, the move signals a bid to rebuild trust and ensure long-term financial stability for Ethereum.

Our take: By accepting Bitcoin ETF shares as collateral, banks like JPMorgan are tacitly endorsing the legitimacy of decentralized assets, blurring the lines between fiat and crypto ecosystems.

Stablecoin Update

Circle’s IPO marked a seismic moment for the stablecoin sector, drawing considerable demand from TradFi investors as it represents the first direct exposure to the stablecoin sector. Initially targeting 24 million shares at $24–$26, the IPO was upsized to 34 million shares at $31, raising $1.1 billion at a fully diluted valuation of $8.1 billion. Shares then kept soaring to $107 in the secondary market by the weekly close. The 25x oversubscribed IPO attracted investors like BlackRock (10% stake) and ARK Invest ($373 million), signaling confidence in USDC’s institutional promise.

Bolstered by a pro-crypto U.S. administration post-November 2024 elections, USDC’s market cap surged 96% YoY to $61 billion, raising its market share from 20% to 25%. Onshore preference and robust DeFi integrations on Ethereum and Solana have fueled this growth, as platforms prioritize regulatory alignment to address regulatory scrutiny. The anticipated GENIUS Act further strengthens USDC’s compliance advantage, solidifying its appeal to institutional investors.

On the other hand, USDT’s market cap saw more muted growth at 28% YoY to $154 billion, seeing its market share decline, though it retains 60% of CEX trading volume as the primary quote currency.  Additionally, USDT appears to be expanding its influence in DeFi through its integration into Hyperliquid EVM, a growing ecosystem where TVL surged 360% from $350 million to $1.6 billion since April. The cross-chain OFT version of USDT, USDT0, powers protocols like Hyperlend and Felix, with over $36 million currently circulating on the HyperEVM ecosystem. If Hyperliquid EVM maintains traction, with the absence of USDC on hyperEVM, USDT0’s role will likely grow, helping USDT retain some share in DeFi.Aforementioned growth pushed the total stablecoin market capitalization to a record $250 billion last week, up from $160 billion a year ago, attributed to an increase in crypto trading, expanding real-world use (e.g., cross-border payments in developing regions), and the rise of tokenized treasury protocols like Ondo and Maple Finance.

Our take: Circle’s valuation, relative to its current revenue and business model, suggests investors may be highly optimistic about the stablecoin growth potential, channeling capital into one of the few publicly traded assets positioned to capture this emerging market’s expansion.

DeFi Update

Pump.fun reportedly plans to raise $1 billion through a token sale at a $4 billion valuation. The proposed PUMP token may entitle holders to a share of protocol revenue, though details on whether this extends to PumpSwap earnings remain unclear. The protocol generates $1-2 million daily revenue, placing Pump.fun among the top DeFi protocols by monthly revenue. The announcement of the ICO triggered a memecoin sector sell-off, potentially because traders anticipated capital shifting from the volatile Pump.fun memecoins to the upcoming PUMP for direct exposure to the platform’s revenue stream. Consequently, the GMMEME index, which encompasses the market capitalization of leading memecoins, fell 13%, while GMCI30 and GMCIMID dropped by 0.4% and 3%, respectively.

PancakeSwap, a leading DEX on BNB Chain, achieved a $98 billion trading volume in May 2025, a 200% month-over-month increase and the highest since November 2021. This surge can partially be attributed to heightened activity from BNB Chain native tokens featured in the Binance Alpha program, the Infinity CAKE Emission Program, which allocates up to 1,440 CAKE daily to boost liquidity in Hook-enabled pools, and the Meme2Million campaign, a five-week memecoin promotion. PancakeSwapX’s zero-fee, gasless swaps further amplified onchain activity. The growth coincides with a $2 billion influx of USD1 (World Liberty Finance-issued stablecoin) liquidity on BNB Chain, boosting stablecoin supply on BNB Chain by 45% in under a week. The capital infusion was preceded by Abu Dhabi-based MGX’s $2 billion USD1 investment with Binance earlier in 2025.

Our take: Since 2024, memecoin trading has remained a major contributor to onchain activity. Unless a new narrative attracts as many users, memecoin infra projects like Pump.fun, Axiom, and DEXs that incentivize memecoin trading are set to dominate revenue generation in DeFi.