Despite this week’s market downturn, some analysts predict that the inclusion of digital assets in US 401(k) retirement plans may unlock billions of dollars in new inflows by the fall, potentially driving Bitcoin to record highs.
This “bullish” development may push Bitcoin (BTC) above $200,000 before the end of the year, signaling another $122 billion worth of new capital while assuming a modest 1% portfolio allocation, André Dragosch, head of European research at crypto asset manager Bitwise, told Cointelegraph.
Corporate Bitcoin treasury acquisitions continue to attract new entrants, such as the Nasdaq-listed healthcare service provider and Bitcoin treasury firm KindlyMD, which made its first Bitcoin investment of $679 million on Tuesday.
Other big investors are turning from Bitcoin to bet on Ether (ETH) price appreciation. On Thursday, a Bitcoin whale sent $189 million worth of BTC to the Hyperliquid decentralized exchange and converted most of it into a $295 million perpetual future long position and a subsequent $240 million spot ETH position.
Crypto in US 401(k) retirement plans may drive Bitcoin to $200,000 in 2025
The inclusion of cryptocurrency in US retirement plans could mark a milestone for Bitcoin adoption and unlock billions of dollars in new capital, potentially pushing the asset above $200,000 by the end of 2025, according to André Dragosch, head of European research at crypto asset manager Bitwise.
President Donald Trump paved the way for cryptocurrency inclusion in US 401(k) retirement plans by signing an executive order on Aug. 7, granting Americans access to digital assets through their retirement plans.
The inclusion of crypto in 401(k) plans may be even more significant for the Bitcoin (BTC) price than the approval of US spot Bitcoin exchange-traded funds (ETFs) in January 2024, Dragosch said.
This “bullish” development may be “bigger than the US Bitcoin ETF approval itself,” signaling another $122 billion worth of new capital while assuming a modest 1% portfolio allocation, Dragosch told Cointelegraph during the Chain Reaction daily X spaces show on Monday, throwing in a price prediction for good measure:
“The official prediction remains $200,000 by the end of the year.”
“If you look at 401(K) and defined-contribution retirement plans in the US, they are huge,” said Dragosch, adding that 1% was a “relatively conservative” allocation estimate for the $12.2 trillion industry.
Including digital assets in retirement plans will enable 401(k) portfolio managers to invest in Bitcoin ETFs, which may push Bitcoin’s price to new all-time highs, flashing another optimistic signal for Bitwise’s $200,000 Bitcoin price target for the end of 2025.
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Kanye West YZY sniper wallet linked to $21 million LIBRA extraction scheme: Analysts
An onchain investigation by pseudonymous analyst Dethective linked a wallet that sniped the Kanye West-themed token YZY to another set of wallets behind the LIBRA token, suggesting that the same operator extracted tens of millions of dollars using insider knowledge.
In a series of X posts on Thursday, Dethective revealed that a YZY sniper wallet managed to buy $250,000 worth of tokens at just $0.20, far below the price most traders paid. Within minutes, the wallet secured over $1 million in profit, which was later funneled into a treasury wallet.
The same treasury wallet had also received large sums from wallets tied to LIBRA’s launch six months ago. Two “Libra sniper” wallets extracted a combined $21 million. In total, nearly $23 million was pulled across the YZY and LIBRA launches, with funds later moved to Kamino or Binance.
“We can be sure this is someone with clear inside info,” Dethective wrote. “The proof is that he did not snipe any coin besides $YZY and $LIBRA and he was prepared with huge size,” they added.
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Bitcoin bull and billionaire files for $250 million SPAC targeting DeFi, AI
Early Bitcoin investor and billionaire Chamath Palihapitiya filed to raise $250 million in blank-check company “American Exceptionalism Acquisition Corp A,” targeting the decentralized finance, AI, energy and defense sectors.
The special purpose acquisition company (SPAC) would be led by Social Capital managing partner Steven Trieu as CEO and Palihapitiya as chairman, according to the registration statement filed with the US Securities and Exchange Commission on Monday.
The $250 million raise seeks to offer 25 million shares at $10 each under the ticker AEXA on the New York Stock Exchange.
Palihapitiya and Trieu are betting on decentralized finance, not Bitcoin, to lead the next wave of financial innovation, focusing on solutions that bridge traditional markets with blockchain technology:
“While Mr. Palihapitiya has long been a proponent of Bitcoin as an inflation hedge and alternative to fiat currencies, we believe that the next stage of development is the increased integration between traditional finance and decentralized finance.”
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Ex-White House crypto director Bo Hines takes Tether advisory role
Stablecoin giant Tether hired former White House Crypto Council Executive Director Bo Hines as its new strategic adviser for digital assets and US strategy, signaling a push to expand in the world’s biggest economy.
Tether, the issuer of the USDt (USDT) stablecoin, appointed Hines to directly engage and coordinate the company’s US strategy and expansion as part of its core focus with immediate effect, according to a Tuesday announcement shared with Cointelegraph.
Hines previously served in President Donald Trump’s administration, where he worked on initiatives to foster digital asset innovation, set guardrails for stablecoin issuers and develop collaboration between government and the blockchain industry.
In his new role, Hines will work with Tether’s leadership team to execute its US market entry and cultivate “constructive relationships” with policymakers and industry stakeholders.
Hines’ “deep understanding of the legislative process, combined with his passion for practical blockchain adoption, makes him an invaluable asset as Tether enters the biggest market in the world,” said Paolo Ardoino, CEO of Tether, adding:
“Bo’s appointment demonstrates our commitment to building a strong U.S.-based presence that spans across multiple sectors, starting with digital assets and expanding to new opportunities, including a deep focus on potential further investments in domestic infrastructure.”
Tether Investments has already reinvested almost $5 billion in the US economy. Hines’ addition aims to “reinforce” this commitment and alignment to the US market, the announcement said.
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Ethena crosses $500 million in cumulative revenue as synthetic stablecoins gain ground
Ethena Labs on Thursday said its Ethena protocol has generated more than $500 million in cumulative revenue. Growth in both revenue and the circulating supply of its synthetic stablecoin, Ethena USDe (USDe), has accelerated since July as synthetic stablecoins gain market share.
Ethena Labs shared the news via a post on X, saying that in the past week, protocol revenue hit $13.4 million and USDe supply hit an all-time high of $11.7 billion.
“Ethena’s revenue has been driven by strong inflows into USDe and favorable market conditions that have amplified returns from its delta-neutral hedging reserve model,” an Ethena Labs spokesperson told Cointelegraph. “The protocol’s momentum reflects growing demand for and confidence in USDe as a store of value.”
According to decentralized finance analytics platform DefiLlama, Ethena USDe had the third-largest market capitalization of all stablecoins at the time of writing. It also had the top market capitalization among synthetic stablecoins. In the past month, the market cap of Ethena USDe has risen 86.6%.
Along with Ethena USDe, other synthetic stablecoins are gaining momentum and market share. Sky Dollar (USDS), which powers the Sky ecosystem and is an upgraded version of DAI (DAI), has seen a 14% increase in market cap. Falcon USD (USDf), a synthetic dollar created by Falcon Finance, has seen its market cap jump 89.4%.
Synthetic stablecoins have benefits as well as risks. Because they are not collateralized by physical assets, they may have lower transaction costs. There’s also a risk of instability and depegging, which can result in significant investor losses.
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DeFi market overview
According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the red.
Memecoin launch platform Pump.fun’s (PUMP) token fell over 22% marking the week’s biggest decline, followed by the SPX6900 (SPX) token, down over 18% over the past week.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.
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