Weekly Top Stories - 5/30

This week in the newsletter, we write about the big Bitcoin Conference in Las Vegas, Ethereum’s recent outperformance, and an exploit on Sui’s largest decentralized exchange.

Bullish Vibes at Bitcoin 2025

The world descends on Vegas to celebrate Bitcoin. BTC Inc.'s sixth annual Bitcoin Conference flooded the Venetian hotel this week with more than 30,000 attendees reveling in the top cryptoasset's growing adoption. U.S. Vice President J.D. Vance addressed a standing-room-only crowd and urged Bitcoiners to support the Trump administration’s effort to seize "a once-in-a-lifetime opportunity to unleash innovation and use it to improve the lives of countless American citizens." (He notably said passing a crypto market structure bill was a “priority” for the administration.)

Other government officials in attendance included SEC Commissioner Hester Peirce, Treasury Senior Counselor for Digital Assets Tyler Williams, Executive Director of the White House Presidential Working Group for Digital Assets Bo Hines, White House Crypto and AI Czar David Sacks, Sen. Cynthia Lummis (R-WY), Rep. Tom Emmer (R-MN), and many more.

Discussions focused on global adoption, Bitcoin treasury strategies, nation-state adoption, and game theory. Bitcoin OGs mingled with macro hedge fund managers, representatives from big banks, government officials, and an enormous cohort of first-time attendees to celebrate Bitcoin's success and plan for the next decade of growth.

One of the more notable announcements was Jack Dorsey’s company, Block (formerly Square), enabling Bitcoin and Lightning payments on its merchant point-of-sale terminals nationwide. New York City Mayor Eric Adams promoted the concept of bitbonds, and Pakistan (yes, the world’s fifth most populous country and 24th largest economy) announced that it will create its own strategic bitcoin reserve.

OUR TAKE:

The vibes in Vegas were unabashedly bullish. I've attended every one of these Bitcoin conferences since the first one in June 2019. That conference took place in the open-air, multi-story parking lot of a decommissioned car dealership and hosted maybe 1,000 attendees. Ross Ulbricht, creator of the Silk Road, phoned in a voicemail that later landed him a month in solitary confinement.

Six years later, the story is shockingly different. Ulbricht is a free man, having been pardoned by President Trump in January, and spoke at the Vegas conference. The 30,000+ attendees make it one of the world’s biggest business conferences, comparable in size to the crowd at the International Council of Shopping Centers convention for mall developers. More than a dozen publicly traded companies are adopting crypto (mostly Bitcoin) treasury strategies. The world's biggest brokerage firms have launched or announced support for Bitcoin purchases. The biggest banks are reportedly banding together to try to launch their own stablecoins. And some of the highest-ranking American politicians are deeply engaged in crypto policy. Step back and think about it: The sitting vice president of the United States just spoke at a Bitcoin conference. This would have been unthinkable in 2019.

Big questions remain. The administration has yet to explain how it intends to implement the President's executive order on a Strategic Bitcoin Reserve. Coursing through the conference was mixed sentiment about so-called Bitcoin treasury companies, with many bullish on the "accretive dilution" but others whispering concerns that the leverage-based strategy could lead to a blowup. Whether or not it eventually implodes, we're still in the early innings of that story.

Another widely asked question at the event: Who is selling? With so many institutions and even countries buying BTC, why isn’t the price even higher? One plausible answer is that longtime holders, who tend to take profits during bull markets, are doing so now. Data from Glassnode suggests this may be the case: The seven-day moving average of the spent output profit ratio (SOPR) climbed 20% over the past five days, signaling that it’s becoming more profitable for long-term holders to sell.

A bigger question I can't help but ask, as a longtime Bitcoiner and six-time conference attendee, is whether this newfound institutional and government adoption conflicts with Bitcoin's core cypherpunk values. The tension is undeniable, but this is what winning looks like. There is no world where Bitcoin is widely adopted that doesn't include pensions, endowments, institutions, TradFi, and yes, nation-states. The challenge is how the Bitcoin community -- developers, stakeholders, evangelists -- will merge the permissionless, libertarian ethos of Bitcoin with the dilution and coercion of mainstream adoption.

If the memes and culture that enforce and pass down the ethos of Bitcoin do not persist and remain strong, then the fundamental features those memes describe may not remain a part of the protocol. Figuring out how to translate these world-altering features into a package that the mainstream institutional community can consume is a challenge that we at Galaxy readily accept and have built our business to meet. – Alex Thorn

ETH Rebounds

Following months of poor performance, ETH finally got its pump. After hitting a five-year low of 0.018051 on April 21, 2025, the ETH/BTC ratio staged a sharp rebound, climbing 38% to reach 0.024927 on May 29. The bulk of this move occurred between May 7 and May 10, when the ratio surged from 0.018666 to 0.024659. Over the same period, ETH's price jumped from $1,812 to $2,583. ETH has since stabilized around $2,661, broadly in line with the overall market.

The rebound was accompanied by a modest 0.37 percentage point drop in BTC dominance, to 61.81%, and a slight uptick in ETH’s share of the overall crypto market cap by 2.04 points between May 7 and May 28, to 9.20%. Additionally, ETH’s open interest leverage ratio hit an all-time high, indicating an elevated risk appetite and a market skewed toward bullish positioning with a decreasing put/call ratio.

OUR TAKE:

While the 35% price increase looks impressive, the move was concentrated within a three-day window from May 7 to May 10. During that time, the total crypto market cap jumped from $3.096 trillion to $3.494 trillion, a 12% increase. Altcoins also rallied broadly alongside ETH: memecoins saw a 43% rise in market cap, while DeFi tokens climbed 29.5%. Since May 10, ETH has largely traded in line with broader market beta, fluctuating around the $2,600 level.

The timing of the rally coincided with the implementation of Ethereum’s Pectra upgrade. While Pectra certainly deserves attention, the more meaningful takeaway may be the narrative it reinforces: Ethereum’s renewed focus on improving the L1 experience. Pectra was designed to enhance both user and validator experiences directly on L1.

For instance, among the 11 Ethereum Improvement Proposals (EIPs) included in Pectra, EIP-7702 introduces a significant improvement by adding smart contract capability to externally owned accounts (EOAs). This change could improve wallet design and address longstanding criticisms of Ethereum’s user experience. Another major upgrade is EIP-7251, which raises the validator staking limit from 32 ETH to 2,048 ETH. This encourages validator consolidation, reduces coordination overhead, and improves scalability on the Ethereum mainnet.

The Pectra upgrade also comes after a shakeup of the Ethereum Foundation leadership, which now operates under a dual Executive Director structure to enhance responsiveness and transparency. One of the focuses iterated by the foundation is on pursuing the “success of the Ethereum mainnet protocol” (while “supporting the success of L2 chains”) by “improving the developer and user experience, clarifying standards, strengthening ecosystems, and smoothing the journey from ideas to live applications.” Meanwhile, Ethereum creator Vitalik Buterin has proposed replacing the Ethereum Virtual Machine (EVM), the computation engine at the heart of the network, with RISC-V, again with the goal of improving mainnet performance, modularity, and compatibility.

It's too early to say whether these upgrades have had a tangible impact on L1 usage. Adoption of EIP-7702, for example, remains limited, with only 74,000 EOAs upgraded so far, compared to roughly 500,000 daily active mainnet addresses. In this light, Pectra’s significance may lie less in immediate utility and more in what it signals: a clear attempt to shift the narrative back toward restoring the L1.

Alongside ETH’s price surge, we've also seen a reversal in U.S. spot ETH ETF flows, which had been negative from early February through mid-April. The reversal suggests renewed institutional optimism, perhaps driven by growing interest in tokenization and stablecoin development, topics that have recently gained traction in the headlines.

However, while Ethereum has so far captured the lion’s share of tokenization activity, its dominance has been concentrated in areas like real-world assets (RWAs) and stablecoins. Solana, by contrast, is carving out a niche in tokenized equities and high-velocity asset trading. Its high-throughput, low-cost infrastructure makes it well-suited for these use cases. Recent developments underscore this positioning: the Kraken exchange announced a partnership with Solana to bring tokenized U.S. stocks to non-U.S. clients, and R3 (a survivor from the long-ago heyday of permissioned enterprise blockchains) plans to bring regulated assets onto a chain often associated with meme coins. While it may not directly threaten Ethereum’s lead in broader tokenization efforts, Solana’s differentiated approach could position the chain as a strong complementary player in tokenized public equities and fast-settling digital assets.

In short, ETH’s outperformance in early May was driven by a combination of a risk-on market environment and a narrative pivot back to L1. The question remains whether this L1 narrative can take hold in a sustainable way. With a majority of activity having migrated to L2s, value accrual to ETH on mainnet remains a central challenge. – Jianing Wu

SUI Validators Mitigate $223M Hack

In the early hours of May 22, 2025, Cetus Protocol, the Sui blockchain’s flagship decentralized exchange, was exploited for an estimated $223 million in assets, including 12.9 million SUI (~$54 million), $60 million USDC, and $4.9 million haSUI. The attacker exploited a flaw in the protocol's overflow check within its liquidity calculation function, using a flash loan to open a concentrated liquidity position, which triggered an integer overflow in Cetus’s code. As a result, a one-token deposit yielded a massive liquidity position, which the attacker used to withdraw the majority of tokens from Cetus before the team could pause the contracts.

In response, Sui validators took an on-chain governance vote to freeze and reclaim the hacked funds. The proposal, “Whether to Return Stolen Assets of the Cetus Protocol Through a Special Transaction,” passed with 99 votes in favor, two against, and two abstentions, representing 92% of the total stake. Upon approval, roughly $162 million of the stolen assets were transferred to a multisig wallet with keys held by Cetus, the Sui Foundation, and auditor OtterSec. While validators’ quick action saved most of the exploited funds, approximately $60 million was bridged out of SUI before the hacker could be stopped.

To cover the deficit, the Sui Foundation has extended a loan to Cetus Protocol to make up the remaining shortfall. While the loan is denominated in SUI, the other terms (maturity, interest rate) are unknown. The loan plugged Cetus’ immediate hole, but left it structurally short tens of millions of its ecosystem’s native SUI token.

OUR TAKE:

This is the first major exploit on SUI. The validator freeze illustrates the perennial trade-off in blockchain governance between pragmatic fund recovery and the ethos of immutability. Rapidly seizing 70%+ of stolen funds preserved user confidence and stemmed losses, but runs counter to a trustless, censorship-resistant ideal. Parallels can be drawn to Ethereum’s 2016 DAO hack, when the community was faced with a difficult choice and hard-forked to recover 3.6 million ETH (~$60 million), ultimately splitting the network into Ethereum and Ethereum Classic and igniting a fierce debate over ledger finality.

That debate went to the very soul of blockchain: was code truly law, or was human intervention justifiable? Purists who believed in absolute immutability saw the fork as a betrayal of the “trustless” ideal. If a smart contract could be tampered with, what distinguished a permissionless ledger from a traditional database? Their objections weren’t just academic; they sprang from a deeply held conviction that any override, no matter how well-intentioned, undermined the integrity of decentralized systems and set a dangerous precedent for future governance.

By contrast, the recent Sui community vote to freeze and recover stolen funds from the Cetus hack passed almost entirely unchallenged. Validators and token holders alike recognized the urgency of stemming further losses and preserving user confidence, choosing pragmatic asset recovery over rigid adherence to non-interventionist doctrine. In doing so, they demonstrated an evolved maturity: lessons learned from Ethereum’s schism tempered ideological rigidity, and the Sui ecosystem rallied around a solution that balanced real-world risk mitigation with a long-term commitment to decentralization. Instead of a crucible of polarized philosophies, the Sui community’s response is a case study in how smart contract communities can adapt governance in response to emergent threats, without fracturing their networks. Like it or not, blockchain consensus is social, not immutable. – Thad Pinakiewicz

Charts of the Week

Ethereum's pivot to rollups, laid out in the 2021 roadmap and accelerated through the introduction of blobs via the 2024 Dencun hard fork, is working out exactly as developers outlined. Ethereum is achieving much-needed scalability through its Layer 2 networks, increasing throughput from about 15 transactions per second (TPS) on the base layer to around 150 TPS on some L2s, with a much higher theoretical maximum.

The charts below highlight Uniswap, one of Ethereum’s most prominent decentralized applications, as a key example of how L2 adoption is unfolding in line with Ethereum’s scalability roadmap. In May 2025, the share of monthly Uniswap trading volume conducted on Ethereum L2s reached a new all-time high of 46.83%.

Uniswap trading volume on Ethereum L2s has grown significantly over time, reaching some of its highest levels in late 2024 and, after a dip, rebounding strongly in May 2025.

Other News

• SEC exempts staking from securities rules.

• Circle presses ahead with IPO, seeks $624m, despite takeover rumors

• GameStop buys $512m of BTC for corporate treasury

• Cantor Fitzgerald makes its first bitcoin-backed loans

• Michael Saylor calls publishing proof of reserves a risky practice

• U.S. Labor Department softens stance on crypto in retirement investments