Welcome to Galaxy Research's Weekly Top Stories. Subscribe to get this newsletter delivered to your inbox every Friday morning.
In this week's edition, Alex Thorn analyzes Trump’s executive order to expand Federal Reserve payment network access to nonbank (including digital asset) firms; Will Owens looks at the pre-IPO company markets on Polymarket and Hyperliquid; and Lucas Tcheyan unpacks the Ethereum Foundation’s brain drain.
Got feedback on this newsletter? Email [email protected]. We’d love to hear from you.
Market Update
The total crypto market cap stands at $2.66tn, down 1.78% from last week (when it stood at $2.70tn). Bitcoin's network value is 4.90% of gold's market cap. Over the last seven days, BTC is down 3.69%, ETH is down 5.44%, and SOL is down 3.47%. Bitcoin dominance is 58.36%, down 85 basis points from last week.
Ethereum’s Spring of Discontent
The Ethereum Foundation is facing new scrutiny after another round of senior exits. Researchers Carl Beek and Julian Ma announced their departures on Monday, joining a list this year that includes co-Executive Director Tomasz Stańczak, board co-steward Josh Stark, Protocol Guild contributor Trent Van Epps, Protocol cluster leads Barnabé Monnot and Tim Beiko, and a three-month sabbatical for researcher Alex Stokes. That’s eight high-profile exits in five months, five of them in May alone. Adding fuel to the fire, on Wednesday, Bankless podcast co-founder David Hoffman, who once described himself as holding 99% of his net worth in ETH, disclosed he had sold his entire position.
The departures followed the EF's March Mandate, a 38-page document codifying a principle called CROPS (keep Ethereum censorship-resistant, open-source, private, and secure) and framing the Foundation as one steward among many rather than the driver of Ethereum's adoption. But no singular reason has been given for the exodus, with growing concern and demand for clarity from prominent community members. Prysm contributor Potuz called the cluster of exits a "textbook case of how to capture an organization." Researcher Dankrad Feist, who left EF for Stripe-backed L1 Tempo last year, posted a prescription for a separately funded $1 billion organization accountable to ETH holders.
Our Take
Exhaustion is the dominant sentiment across Ethereum right now. The timeline is tired of roadmap resets, unclear value accrual, and being told every awkward transition is decentralization working as intended.
Some of that frustration is a result of ETH’s underwhelming performance. For most of crypto’s short history, owning the native token of the most credible general-purpose L1s was a safe trade. That trade is now broken. The Fat Protocol thesis has given way to the Fat App thesis. A $300b+ network value is harder to defend when the apps running on top capture most of the economics.
Regulatory clarity and easier access made the problem worse. The marginal buyer of ETH used to be a crypto native willing to underwrite neutrality as a terminal value. Increasingly the marginal buyer is an allocator comparing ETH against a Bitcoin ETF as the reserve asset trade, HYPE as the onchain exchange trade, ZEC as the privacy trade, and VVV as the AI usage and burn trade.
This is why the communication gap around the EF departures matters much more than in the past. The exits may have benign individual explanations. But without a clear public account of what is driving them, every camp gets to project its own story – burnout, compensation, politics, ideology, loss of conviction, or forced restructuring – at the same time as alternatives are beginning to shine. Ethereum increasingly looks like an ecosystem in drift.
Part of the tension is that the market increasingly wants the EF to behave like a competitive corporate steward for ETH, while the EF Mandate makes clear the organization does not see that as its role. The document is explicit. The EF exists to preserve Ethereum’s neutrality and uphold CROPS principles at the base layer, not maximize ETH price, optimize tokenholder returns, or aggressively coordinate commercial expansion across the ecosystem. That may frustrate parts of the market, but the Foundation appears directionally aligned around that vision. The problem is that large parts of the ecosystem no longer are.
The path back is hard, but it is not unprecedented. The closest recent parallel is Solana after the collapse of FTX when SOL was written off and its credibility was damaged by association with Sam Bankman-Fried. It recovered by fixing technical bottlenecks, compressing its identity into a clear thesis (the high-throughput consumer chain) and dominating the vertical driving onchain attention (memecoins). The analogy is imperfect. Ethereum is larger, more institutionally held, and more constrained by its neutrality premium. But Solana’s recovery is instructive.
Ethereum needs the same discipline. First, address the constraints that pushed users and developers elsewhere while getting in front of the narratives most likely to matter next cycle: L1 scaling, onchain privacy, post-quantum security, and AI-native economic infrastructure. The Strawmap maps much of this work directly (see Galaxy Research's Mapping the Strawmap for an in-depth overview). The harder task is the institutional and commercial one. Pick the verticals where Ethereum has a defensible moat (high-value DeFi, asset issuance, tokenized RWAs, stablecoin settlement, privacy-preserving financial infrastructure, and eventually autonomous economic agents) and concentrate resources there. Ethereum can win the markets where credible neutrality is a feature users are willing to pay for. Then commit to a single, legible thesis for ETH as an asset and stick to it. The current pitch is too diffuse. ETH cannot simultaneously be sold as ultrasound money, a tech-index proxy, L2 settlement collateral, institutional reserve asset, AI-agent money, privacy infrastructure, and generic "world computer" exposure without the market eventually discounting all of it.
The near-term agenda is straightforward. Ship the Glamsterdam upgrade. Keep Hegotá on track. Explain who owns what inside the EF. Concentrate on the verticals where Ethereum has real moats. Give the market a one-sentence answer on ETH value accrual. Pull that off and this spring could go down in history as a painful but necessary redistribution of responsibility. Fall short and the market will keep treating the churn as confirmation that Ethereum's strongest asset, its decentralized social layer, has become its biggest coordination problem. – Lucas Tcheyan
The Private Market Just Opened to the Public
Elon Musk’s SpaceX is preparing to go public, but the plebs already have a way to get a piece of the action, thanks to crypto: Trade.xyz launched SpaceX pre-IPO perpetuals on Hyperliquid at $1.78t implied valuation Sunday. Typically, the only way to bet on a private company before it lists has been to know somebody. Forge, Hiive, EquityZen, Nasdaq Private Market: all of these venues are gated behind accreditation, and all of them are illiquid, updating prices on the cadence of funding rounds and broker quotes. Crypto just blew the gates open in real time, and the proof points are stacking up faster than anyone expected.
On May 1, trade.xyz launched the first pre-IPO perpetual (IPOP) on Hyperliquid: Cerebras Systems, ticker CBRS, reference price ~$175 (~$48.9b implied valuation). The contract was cash-settled and synthetic, with no shares, no voting, no IPO allocation. It’s purely a directional bet on where the equity will open once it lists. Until the listing, the market itself is the oracle. Price is a 30-minute exponential moving average (EMA) of the contract’s impact price (the average price at which large orders execute), capped at 20%-25% above or below a reference price set by the platform. Post-listing, IPOPs convert to a standard equity perp on external oracle pricing.
The Cerebras market worked. The morning of the IPO, Hiive had Cerebras priced at $220. Trade.xyz was around $290 in the morning and ~$340 an hour before the bell. Cerebras opened on Nasdaq at $350, within 3% of the price on Hyperliquid. Cerebras board member Eric Vishria tweeted about the IPO, and in one of the images, you can clearly see a trader with Hyperliquid pulled up on the screen. The crowd beat the accredited venue, and the bookrunner knew it.
Then came SpaceX. The contract, trading under the ticker SPCX-USDC, launched with a $150 reference price based on SpaceX’s reported 11.87 billion fully diluted shares, implying a starting valuation of roughly $1.78 trillion. Within hours, SPCX spiked to $216, pushing the implied valuation above $2.5 trillion, before settling near $205. The market drew $33 million in 24-hour volume and $21.8 million in open interest in its first session. SpaceX is targeting a June 12 listing in the $1.75t-2t range. The perp is already above that.
The market is voting on the venue too. HYPE, Hyperliquid’s native token, broke its all-time high Thursday morning, trading above $62 (+16% on the day and ~46% on the week), clearing the $59.40 peak set in September 2025. ETF inflows are the proximate catalyst (Bitwise’s BHYP and 21Shares’ THYP both posted a record day Wednesday).
The legal architecture is the other half of the story. Anthropic first posted its investor warning in February, and on May 11 updated the page to declare all unauthorized secondary transfers of its shares null and void, naming eight platforms across the stack. Gabe Shapiro flagged that “void” (rather than “voidable”) is the most aggressive language available under Delaware law. Entire chains of secondary trades can be wiped from the cap table at once. The action targeted the underlying share transfer every wrapper relies on. Since no shares change hands with synthetic perps, there’s nothing for the issuer to invalidate with IPOPs.
Two days after SPCX went live, Polymarket came at the same wall from a different angle. It announced the launch of the first prediction markets tied to private company performance and milestones. Through an exclusive agreement, Nasdaq Private Market will serve as the resolution data provider for private company markets on Polymarket. The first markets cover OpenAI, Anthropic, SpaceX, Stripe, Kraken, Anduril, and Databricks. These are binary YES/NO event contracts resolved with NPM’s transaction and valuation data. The Anthropic market, for example (LINK), is already a real probability ladder: $950b valuation by June 30 at 96%, $1t at 79%, $1.1t at 37%, $1.5t at 9%. Current NPM-implied valuation is $936b. The crowd is pricing a near-certain cross of $950b and a coin-flip case for $1.1t before quarter-end. However, this market only has ~$71k of volume and therefore carries limited weight.
Our Take
This is the most underrated category unlock in crypto this year. Pre-IPO is a category where the traditional rails are actually broken: Accreditation gates, Forge and Hiive prints that lag by weeks, funding round valuations that are negotiated rather than discovered. Crypto just turned the lights on.
Cerebras is the data point everyone should be looking at. The perp printed $340 an hour before a $350 open while the accredited-only incumbent sat at $220 that morning. That’s a 24/7, permissionless, USDC-collateralized market embarrassing the gated venue on price discovery for one of the biggest IPOs of the year, with the bookrunner checking the Hyperliquid chart.
SpaceX is the harder test. The contract is already implying valuations well north of the $1.75t-2t range. Maybe the crowd is right, and the bankers are sandbagging SpaceX. Maybe the crowd is high on narrative. Either way, we will find out in public, on a blockchain, with tens of millions of daily volume voting in real time before the June 12 listing.
The Polymarket-NPM deal is an interesting institutional angle. NPM is the plumbing for private secondary liquidity, and it just plugged directly into a crypto-native prediction market. This means that NPM’s institutional clients now have a free, liquid, public read on what the crowd thinks. Remember how useful wisdom of the crowd is.
The legal architecture is what makes the perps durable, and the Anthropic action is the cleanest illustration of why. Tokenized special-purpose vehicles (SPVs), closed-end funds, and direct marketplaces all depend on a share transfer the issuer can invalidate. Synthetic perps and binary milestone contracts don’t transfer equity at all; they reference valuation. There’s nothing to void. Because of this, the issuer can’t touch these products, and it’s the moat the synthetic category didn’t even have to design.
A few honest risks: Pre-listing IPOP markets use the contract’s own impact price as the oracle, so thin books drift and as noted, the initial reference is set by the platform. Leverage still liquidates, but this is the case with all perps and should be widely known by now. Companies don’t endorse these financial instruments, which means narrative-driven mispricings are a feature.
Roughly $3.5t of listings are queued behind SpaceX: Anthropic ($860b-900b target, October 2026); OpenAI ($1t+, as early as Q4 2026), Stripe, Databricks. Binance just listed SpaceX pre-IPO futures, following OKX, Crypto.com, and Trade.xyz; every major venue is racing in. The interesting question is how long until the bankers running the next billion-dollar roadshow start checking the crypto chart before they set a range. We already know it works.
Watch SPCX through June 12, the next IPOP launches, Polymarket volume on the OpenAI markets, and whether any traditional broker or ETF starts referencing onchain pricing as a primary signal.
The plumbing is here. The proof is on the tape. Thank you Jeff and thank you Shoku. - Will Owens
Skinny Accounts, Big Stakes
President Trump signed an Executive Order Tuesday called “Integrating Financial Technology Innovation into Regulatory Frameworks.” This fintech executive order is broad, but its most consequential provision may be the one aimed at the Federal Reserve’s payment rails. Section 4 requests that the Federal Reserve evaluate whether uninsured depository institutions and non-bank financial companies (including firms engaged in digital assets, “novel activities,” and direct participation in instant-payment networks) should be allowed to access Reserve Bank payment accounts and services. The White House gives the Federal Reserve 120 days to report back on its legal authority, options for expanding access, any legal impediments, and whether the 12 regional Reserve Banks should handle these requests independently or whether there should be a Board-level framework. The order then asks the Fed to establish transparent application procedures and make determinations on complete applications within 90 days.
Last October, Fed Governor Christopher Waller floated the idea of a “payment account” (effectively a “skinny master account”) that would give legally eligible firms access to Fed payment rails without the full bundle of privileges that come with a traditional master account. Waller described an account with no interest, no daylight overdrafts, no discount-window access, and potentially capped balances.
On Wednesday, the day after Trump’s executive order, the Fed formally requested comment on a payment-account proposal with those same basic features: a settlement-only account with automated controls to prevent overdrafts, no intraday credit, no interest, and no discount-window access.
In March, the Federal Reserve Bank of Kansas City approved a limited-purpose account for Payward Financial, which does business as Kraken Financial and is chartered in Wyoming as a special purpose depository institution (SPDI). The Kansas City Fed said Kraken was reviewed under the Fed’s Account Access Guidelines as a Tier 3 institution and approved for an initial one-year term with restrictions tailored to its business model and risk profile. Kraken said the account makes it the first digital-asset bank to gain direct access to core U.S. payment infrastructure, including Fedwire, and reduces its reliance on correspondent banks. Bank trade groups criticized the approval as opaque and premature, arguing that it front-ran the public process around the skinny-account framework.
Custodia is the cautionary tale on the other side. The Wyoming-chartered SPDI applied for a Fed master account in October 2020, was told in early 2021 that it was legally eligible for one, then spent years in review before being denied. In March, the Tenth Circuit denied rehearing by the full court, leaving in place a ruling that Reserve Banks have broad discretion over master-account applications.
That outcome sits uneasily next to developments abroad. The Bank of England has allowed authorized payment and e-money institutions to hold real-time gross settlement (RTGS) accounts since 2017, and direct participation in the U.K.’s Faster Payments system grew from 10 firms in 2015 to 45 in 2023. In Europe, the Eurosystem now allows payment institutions and e-money institutions that meet requirements to access TARGET services, including T2 and TIPS, while Lithuania’s central bank-operated CENTROlink system has more than 130 participants, most of them payment and e-money institutions.
Our Take
The White House is pushing the Fed to address a question it has avoided for years: is access to central bank settlement a bank-only privilege, or basic payment infrastructure that regulated nonbanks should be able to use? Whether the Fed chooses to answer the question is another question.
The executive order is drafted carefully to only “request” that the Fed look into expanded payment accounts rather than “order” it to do so. The Federal Reserve is an independent agency accountable to Congress, and master-account decisions still turn on the Federal Reserve Act, Board policy, Reserve Bank discretion, and the courts. “Fed independence” is a hot-button topic. Attacking it on this vector wouldn't make sense, especially after the resolution of the recent dustup about the Fed’s renovation expenses paved the way for Kevin Warsh’s confirmation as the new Fed chair. Still, the order is political pressure, agenda-setting, and a very public nudge. Even without directly ordering the Fed around, this type of pressure can still have an effect. Then again, the Fed's request for comment on payment accounts suggests it was already moving in the administration's preferred direction.Maybe the EO is Trump's idiosyncratic way of giving the Fed air cover.
Today, fintechs, crypto firms, stablecoin issuers, and payment companies mostly must access Fed rails through banks. That gives banks a legitimate risk-management role, but it also gives them a veto over would-be competitors. A “skinny master account” is a clean middle ground and would democratize access to some of our system’s most crucial monetary plumbing. Kraken and Custodia show why a clear framework is needed. Maybe Kraken’s restricted account and Custodia’s denial reflected different risk profiles, but from the outside, the process looks slow, opaque, and ad hoc. One Wyoming SPDI fought for years and lost; another got a Fed account. From an outsider’s view, these examples look like random discretion more than a repeatable and clear process.
The banking lobby has raised alarms about risks that could arise from granting such accounts to nonbanks, with questions about weak controls, stablecoins, policies to prevent money laundering, and cyber risk at the top of their list. But, in our view, limited settlement accounts expand access, not risk. And the U.K. and EU have already shown this is not a radical step. Both jurisdictions have allowed non-bank access to central bank payment rails for years, with each formalizing the distinction between actual banks vs. firms that need access to payments, and the sky has not fallen.
On this, as with tokenized securities and stablecoin yield, one has to wonder whether the banks are using fears about risks as cover to defend their moats. The Fed does not need to open the door to everyone, and but it should finally expand access to its key payments systems and write clear rules for who gets narrow access, on what terms, and why. – Alex Thorn
Other News
👀 Check out the caveat, bottom of page 1 of this OCC enforcement action
🇺🇲 U.S. signs LOIs to invest $2b in quantum computing ecosystem
🚢 Iran said to offer maritime insurance “settled in BTC” for Strait of Hormuz
🤝 Tether buys out SoftBank’s stake in bitcoin DAT Twenty One Capital
📈 Blockchain.com, an OG crypto firm, files for a U.S. IPO
🚫 OFAC sanctions six Ethereum addresses linked to drug cartel
🚀 SpaceX discloses 18,712 BTC holding at $35k cost basis in IPO filing
🤖 NYSE owner ICE plans its own futures market for compute
🔐 Crypto custodian Copper said to seek a buyer for $500m
🙏 RIP former Rep. Barney Frank (Dodd-Frank Act, Signature Bank)
Charts of the Week: The State of Crypto Leverage
The crypto lending market is slowing, but resilient compared to past cycles. For example: As of March 31, Galaxy Research tracked $25.43 billion of open borrows from centralized finance (CeFi) lenders. This represents quarter-over-quarter (QoQ) shrinkage of 7.23%, or -$1.98 billion, CeFi’s first QoQ contraction since Q4 2023, and $18.59 billion (+271.69%) growth since the bear market trough of $6.8 billion in Q4 2023. Still, CeFi borrows outstanding are 30.47% below their Q1 2022 all-time high of $36.58 billion.
All told, crypto-collateralized lending contracted by $3.62 billion (-5.1%) in Q1 2026 to $67.42 billion. This is 14.3% lower than the Q3 2025 high of $78.67 billion. Lending through DeFi apps (such as Aave) fell for the second consecutive quarter in Q1, contracting by $4.53 billion (-13.82%) to $28.22 billion. Collateralized debt position (CDP) stablecoins were the only category that saw QoQ growth in Q1, adding $2.89 billion (+26.54%) in supply. Sky’s USDS and DAI were the primary drivers of CDP stablecoin growth, adding $2.88 billion through Q1.
Read Galaxy Research’s comprehensive report covering crypto leverage here.
Legal Disclosure:
This document, and the information contained herein, has been provided to you by Galaxy Digital Inc. and its affiliates (“Galaxy Digital”) solely for informational purposes. This document may not be reproduced or redistributed in whole or in part, in any format, without the express written approval of Galaxy Digital. Neither the information, nor any opinion contained in this document, constitutes an offer to buy or sell, or a solicitation of an offer to buy or sell, any advisory services, securities, futures, options or other financial instruments or to participate in any advisory services or trading strategy. Nothing contained in this document constitutes investment, legal or tax advice or is an endorsement of any of the stablecoins mentioned herein. You should make your own investigations and evaluations of the information herein. Any decisions based on information contained in this document are the sole responsibility of the reader. Readers should consult with their own advisors and rely on their independent judgement when making financial or investment decisions.
Participants, along with Galaxy Digital, may hold financial interests in certain assets referenced in this content. Galaxy Digital regularly engages in buying and selling financial instruments, including through hedging transactions, for its own proprietary accounts and on behalf of its counterparties. Galaxy Digital also provides services to vehicles that invest in various asset classes. If the value of such assets increases, those vehicles may benefit, and Galaxy Digital’s service fees may increase accordingly. The information and analysis in this communication are based on technical, fundamental, and market considerations and do not represent a formal valuation. For more information, please refer to Galaxy’s public filings and statements. Certain asset classes discussed, including digital assets, may be volatile and involve risk, and actual market outcomes may differ materially from perspectives expressed here.
For additional risks related to digital assets, please refer to the risk factors contained in filings Galaxy Digital Inc. makes with the Securities and Exchange Commission (the “SEC”) from time to time, including in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, filed with the SEC on November 10, 2025, available at www.sec.gov.
Certain statements in this document reflect Galaxy Digital’s views, estimates, opinions or predictions (which may be based on proprietary models and assumptions, including, in particular, Galaxy Digital’s views on the current and future market for certain digital assets), and there is no guarantee that these views, estimates, opinions or predictions are currently accurate or that they will be ultimately realized. To the extent these assumptions or models are not correct or circumstances change, the actual performance may vary substantially from, and be less than, the estimates included herein. None of Galaxy Digital nor any of its affiliates, shareholders, partners, members, directors, officers, management, employees or representatives makes any representation or warranty, express or implied, as to the accuracy or completeness of any of the information or any other information (whether communicated in written or oral form) transmitted or made available to you. Each of the aforementioned parties expressly disclaims any and all liability relating to or resulting from the use of this information. Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Galaxy Digital and, Galaxy Digital, does not assume responsibility for the accuracy of such information. Affiliates of Galaxy Digital may have owned, hedged and sold or may own, hedge and sell investments in some of the digital assets, protocols, equities, or other financial instruments discussed in this document. Affiliates of Galaxy Digital may also lend to some of the protocols discussed in this document, the underlying collateral of which could be the native token subject to liquidation in the event of a margin call or closeout. The economic result of closing out the protocol loan could directly conflict with other Galaxy affiliates that hold investments in, and support, such token. Except where otherwise indicated, the information in this document is based on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date hereof. This document provides links to other Websites that we think might be of interest to you. Please note that when you click on one of these links, you may be moving to a provider’s website that is not associated with Galaxy Digital. These linked sites and their providers are not controlled by us, and we are not responsible for the contents or the proper operation of any linked site. The inclusion of any link does not imply our endorsement or our adoption of the statements therein. We encourage you to read the terms of use and privacy statements of these linked sites as their policies may differ from ours. The foregoing does not constitute a “research report” as defined by FINRA Rule 2241 or a “debt research report” as defined by FINRA Rule 2242 and was not prepared by Galaxy Digital Partners LLC. Similarly, the foregoing does not constitute a “research report” as defined by CFTC Regulation 23.605(a)(9) and was not prepared by Galaxy Derivatives LLC. For all inquiries, please email [email protected].
©Copyright Galaxy Digital Inc. 2026. All rights reserved.