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In an important development, a governance dispute within the Aave ecosystem has reignited long-standing concerns around token value capture, operational control, and the blurred lines between decentralized governance and corporate execution. The ongoing debate, which culminated in a highly polarized and controversial DAO vote, highlights broader structural challenges facing DeFi protocols that evolved under restrictive regulatory conditions but now operate at an institutional scale.

Governance Proposal Sparks Heavy Debate Despite Rejection

At the center of the ongoing controversy was a proposal to bring Aave’s brand and front-end assets under direct DAO control, following accusations that Aave Labs redirected protocol-generated fees without prior community approval. Notably, pseudonymous DAO member EzR3aL alleged that fees generated from the DeFi protocol’s integration with decentralized exchange aggregator CoW Swap were routed to a wallet controlled by Aave Labs. 

The critic argued that these fees should have accrued directly to the DAO, drawing an equal opposition from members of Aave Labs. Ultimately, a proposal review was submitted to the DAO seeking complete control of the protocol’s brand assets, such as domains, social media handles, naming rights, etc. Interestingly, more than 55% of voting power opposed the measure, 41% abstained, and just 3.5% voted in favor. 

Commenting on the event, Wintermute CEO Evgeny Gaevoy shared some crucial insights. While recognizing the expectation mismatch between Aave Labs and governance token holders as to who is eligible to what, Gaevoy also criticized the proposal, which he described as premature and lacking critical details. 

The Wintermute boss said: 

I disagree with the forum proposal as it stands now. It makes no sense to commit to a course of action without knowing the specifics. It’s far from obvious how the entity owning the front end and brand would be governed, whether it would be for profit or not, and whether it would actually guarantee value accrual to token holders.

Gaevoy describes value accrual as the “heart of the problem and nudges the Aave Labs to take significant steps in resolving this issue.

Aave CEO’s Response, Vote-Buying Claims, And Path Forward

Following the vote, Aave founder and CEO Stani Kulechov addressed the controversy, emphasizing that disagreement is a natural feature of decentralized governance. He acknowledged shortcomings in communication and pledged to better articulate how Aave Labs’ products generate value for the DAO and general token holders in the spirit of economic alignment. 

Kulechov also rejected claims of vote manipulation tied to his recent $15 million AAVE purchase, stating that the tokens were not used to influence the governance process, but rather showcase his conviction in the DeFi project. Looking ahead, Kulechov stressed that the Aave ecosystem is large enough to support multiple service providers and is committed to improving transparency and alignment. “$AAVE will win,” he concluded, signaling confidence that the protocol can emerge stronger and unified from the governance controversy.

Cardano founder Charles Hoskinson has criticized legacy finance systems, highlighting that networks like Midnight and XRP are already achieving results 100x beyond the ambitions of these initiatives. His statements seemed to focus on structural design and scalability, suggesting that Cardano and XRP’s advantage lies in their architectures and blockchain capabilities. 

Cardano And XRP Outpacing Legacy Finance

In a post on X, Hoskinson shared pointed commentary on the structural gap between established networks and legacy finance systems connected to Canton, a privacy-focused, interoperable Layer 1 blockchain. He noted how Cardano and XRP are already operating far beyond the ambitions and capabilities of these traditional financial systems attempting to enter Web3. 

The Cardano founder made clear that his assessment had nothing to do with market cycles or speculative price momentum. Instead, they appeared to highlight the thoughtful design behind Cardano and XRP, and why their respective infrastructures continue to set native blockchains apart from institutional imitations. 

Notably, both Cardano and XRP were designed with decentralization and global scalability as core requirements. Hoskinson has stated that these features stand in contrast with legacy finance organizations connected to Canton that attempt to adapt blockchain ideas within tightly controlled environments. He indicated that such constraints prevent these systems from realizing their full Web3 potential. 

A primary example cited by Hoskinson in his discussion is Midnight, a new blockchain developed under his leadership. Midnight is a Layer 1 network designed for programmable privacy, addressing long-standing challenges in data protection and compliance. 

This blockchain network introduces a dual economic model through its native NIGHT token and a separate DUST resource used for transaction execution and predictable cost maintenance. Based on his statements on X, Hoskinson has positioned Midnight as evidence that Web3-native systems can meet real-world requirements at a robust scale. 

XRP also presents another pillar of Hoskinson’s comparison. Launched in 2012, the XRP Ledger (XRPL) was designed for high-speed and low-cost settlement of digital assets across borders. Its long operational history and technical stability set it apart from traditional finance systems. 

Over the years, XRPL has grown significantly, leading to speculation that it could challenge legacy payment rails such as SWIFT. Ripple’s regulatory battle with the US Securities and Exchange Commission (SEC) further tested the blockchain network, with the case’s positive outcome reinforcing its legal and operational standing. All of these factors contribute to Hoskinson’s view of XRP as a mature and battle-tested system operating at a scale 100x that of legacy finance.  

The Real-World Asset Comparison 

Hoskinson further explained why he believes that Midnight and XRP are operating at a scale far beyond the ambitions of legacy finance systems with Canton. He argued that tackling the $10 trillion Real-World Asset (RWA) market requires comprehensive technological solutions, not half measures. 

According to him, only complete end-to-end strategies supported by strong partners and engaged communities can succeed in this tokenization space. He emphasized that Midnight and XRP embody these qualities. Their infrastructure and community support give them a significant edge over traditional finance organizations aiming to enter the Web3 space.

Based on reports from industry outlets and internal pricing lists, Bitmain has sharply reduced the asking prices for several of its Bitcoin ASIC models, a move tied to falling mining revenue and bloated inventory.

The cuts place some high-end units near wholesale break-even levels for operators paying standard power rates.

Following the April 2024 halving, which cut the Bitcoin block reward to 3.125 BTC, mining companies are increasingly adopting renewable energy to lower operating costs.

Normally, higher BTC prices help offset the reduced subsidy, but 2025 defied expectations: after peaking above $126,000 in October, Bitcoin’s price dropped sharply to $80,000 by November.

S19e XP Hydro And Bundle Deals

According to dealer price sheets, the S19e XP Hydro and the 3U S19 XP Hydro are being offered at roughly $3 per TH/s in some factory sales and promotions.

The S19 XP+ Hydro units are hovering near $4 per TH/s, market figures note. Older and immersion-ready models such as the S21 Immersion and S21+ Hydro are listed at about $7 to $8 per TH/s in certain offers while some auction listings started with bids near $5.5 per TH/s for S19k Pro variants.

Mining Margins Squeeze Operators

Mining income per unit of hashpower has fallen to levels not seen in several years, according to market trackers. That decline has pushed many operators to reassess expansion plans and look for cheaper gear or lower hosting rates.

Bitmain’s price moves appear geared toward shifting stock quickly rather than supporting margins. Some miners reported the price cuts were large enough to make previously unprofitable deployments look acceptable again — but only if power costs remain low and Bitcoin prices recover.

Market Reaction And Secondary Sales

Used-gear markets reacted fast. Some resellers cut prices further to match factory reductions, creating a cascade of lower bids and more machines changing hands.

Auction formats and bulk sales surfaced in public listings, which analysts say is a sign manufacturers are trying to clear inventory without publishing deep discounts across all channels.

Smaller operators voiced relief; larger operations said they were watching closely, weighing whether to buy new units or delay purchases.

Competition And Industry Context

Reports point to weak demand across the sector, not just at one maker. Competing brands have adjusted offers in response, and secondhand supply has swollen.

The overall effect has been a faster replacement cycle for the most efficient miners and an accelerated scrapping or resale of older rigs.

Hashprice metrics, which measure revenue per TH/s, are at multi-year lows, leaving less room for recovery unless Bitcoin’s price improves or electricity costs fall.

Short-term, cheaper new rigs could ease cash pressure for some operators who can deploy at favorable power rates. Long-term, the market may see consolidation as undercapitalized miners exit.

Featured image from Pexels, chart from TradingView

CoinGlass has drawn the crypto community’s attention to how much was liquidated from the Bitcoin and crypto market this year. The October 10 crash notably stands out as the largest liquidation event in the market’s history. 

Here’s How Much Was Liquidated From The Bitcoin and Crypto Market In 2025

A CoinGlass report revealed that the total nominal value of forced liquidations across both long and short positions was approximately $150 billion. This corresponds to a daily average of roughly between $400 and $500 million in routine leverage washing. CoinGlass noted that the vast majority of trading days were limited to liquidations, which were in the range of tens to hundreds of millions of dollars. As such, these movements had a limited impact on medium to long-term Bitcoin prices and crypto market structure. 

However, CoinGlass stated that the systemic stress was fully concentrated within a few extreme event windows, with the deleveraging event of October 10 being the most obvious for the Bitcoin and crypto market. On that day, the market-wide liquidation volume reached an extreme peak, with short and long liquidations surpassing $19 billion.

This marked the largest liquidation event in the Bitcoin and crypto market’s history and surpassed the single-day highs of all previous liquidation rounds. CoinGlass suggested that the magnitude of the October 10 liquidation may be much higher than $19 billion, given the disclosure timing of certain platforms and feedback from market makers. Based on this, the derivatives analysis platform estimates that the actual nominal liquidation scale likely reached between $30 and $40 billion. 

This figure represents a multiple of the second-highest liquidation event in the previous cycle, which occurred on April 18, 2021. CoinGlass noted that, structurally, the liquidations on that day were heavily skewed toward the long side, with long liquidations accounting for as much as 90% of total Bitcoin and crypto market liquidations. The platform stated that this indicates that prior to the event, BTC and related derivatives markets were in a state of extremely crowded long leverage. 

What Was Responsible For The October 10 Crash

CoinGlass noted that from a casual perspective, the trigger for the October 10 Bitcoin and crypto market crash was Trump’s announcement of 100% tariffs on Chinese goods. This is said to have significantly elevated market expectations for another round of trade tensions between the two countries, prompting investors to shift to a “risk-off” mode. 

However, beyond Trump’s announcement, CoinGlass stated that long leverage utilization in the derivatives market was elevated and that the basis between spot and futures was high. As such, the entire Bitcoin and crypto market was effectively in a fragile state characterized by “high valuation plus high leverage.” Therefore, the derivatives analysis platform suggested that Trump’s announcement was just a catalyst that brought the ‘House of Cards’ falling. 

At the time of writing, the Bitcoin price is trading at around $87,400, down almost 2% in the last 24 hours, according to data from CoinMarketCap.

Bitcoin is closing the fourth quarter of 2025 on a weak note, reinforcing concerns that the market’s correction phase is far from over. After peaking at around $126,200 in early October, the flagship cryptocurrency has slipped into a sustained downturn, losing 30% of its market value at press time. 

Since that peak, Bitcoin has struggled to decisively reclaim the $92,000 level, with repeated rejection at higher prices highlighting fading demand and growing caution among investors. Notably, crypto analyst GugaOnChain warns that the poor quarterly close could extend downside pressure into early 2026, as both on-chain data and sentiment indicators point to a continuation of bearish conditions.

Capitulation Indicators Signal Market Stress To Remain In 2026

According to GugaOnChain in the QuickTake post on Friday, the BTC: Quarterly Price Performance indicator reports a negative Q4 performance of -19.15%, which serves as the foundation of this bearish outlook. Furthermore, several key capitulation indicators also suggest that the market is unprepared for any form of bullish revival. 

For example, the Spent Output Profit Ratio (SOPR) currently sits below 1 at 0.99, indicating that investors are selling Bitcoin at a loss, a common feature of bear market phases. Similarly, the Short-Term Holder MVRV (MVRV-STH) remains below 1 at 0.87, signaling that short-term holders are deeply underwater and more prone to capitulation at the moment.

Further reinforcing this narrative, GugaOnChain points to the elevated percentage of Bitcoin supply in loss, currently standing at 35.66%, pushing more BTC holders into significant loss positions, thereby reducing confidence and driving market stress. In addition to these metrics, the Fear & Greed Index has dropped into the “extreme fear” zone at 20, suggesting widespread pessimism and risk aversion among participants.

 

Bear Market Confirmation Indicators

Beyond capitulation metrics, GugaOnChain highlights additional confirmation indicators that suggest that downside risks will remain dominant in the near term. One of these indicators, the Market Cap Growth Rate, measured by the 30-day versus 365-day moving average gap ratio, is firmly negative at -11.65%, pointing to contracting market growth rather than expansion.

Institutional flows also reflect waning confidence. US Bitcoin spot ETFs recorded $825.7 million in net outflows between December 18 and December 24, 2025, highlighting reduced institutional appetite as the Q4 price struggles persist. Meanwhile, the Coinbase Premium Gap has remained negative at –66.11, signaling weaker demand from US-based investors compared to offshore markets.

In assessing these several metrics together, GugaOnChain concludes the crypto market is likely to remain in a bear phase for the next two to three months. Therefore, investors should anticipate further corrections in the first quarter of 2026 until the capitulation signals ease and demand is stabilized.

At press time, Bitcoin trades at $87,436, reflecting a slight market loss of 0.42% in the last day.

On-chain data shows the year 2025 saw Bitcoin mining become notably harder for miners as Difficulty witnessed net growth of 35%.

Bitcoin Difficulty Has Crossed 148 Trillion Hashes

2025 is coming to a close, and it was a year where Bitcoin miners significantly expanded their facilities. According to data from Blockchain.com, the network Hashrate, a measure of the total amount of computing power connected by the miners, has seen its 7-day average value go from 795.7 terahashes per second (TH/s) at the start of the year to 1070.3 TH/s today.

During this phase of growth, the Hashrate set multiple new records, with the final all-time high (ATH) of 1,151.6 TH/s coming in October. Since then, the metric has slowed down, but even with the decline to the current level, it remains about 34.5% up since January 1st.

Bitcoin miner revenue mostly comes from the block subsidy, which remains fixed in BTC value outside of Halving events, so miners tend to be dependent on growth in the price for a boost in their income. This is why the Hashrate usually follows the price trend.

From the chart, it’s visible that the Hashrate’s ATH came right after the top in the cryptocurrency and the pullback in the metric since then has also come alongside a drawdown in the price. Miners have been more resilient than the asset, however, as BTC is down year-to-date, while the Hashrate is still up notably.

Growth in the Bitcoin Hashrate always results in an increase in another metric, called the Difficulty. The Difficulty is a feature baked into the blockchain’s code, controlling how hard miners would find it to discover the next block on the network.

It automatically changes its value about every two weeks, based on how miners performed since the last adjustment. Satoshi set a standard block time of 10 minutes for the network to follow; if miners take an average period faster than this to add blocks, the chain increases the Difficulty.

The exact degree of the upward adjustment is always just enough to counteract the speed increase of the miners. In other words, it balances out the jump in the Hashrate.

As miners were in a phase of growth this year, Bitcoin had to repeatedly elevate its Difficulty, setting new ATHs in the process.

Since setting a new record above 155 trillion hashes in October, the Bitcoin Difficulty has also witnessed a decline. Even so, the metric at its current value of about 148.2 is still 35% up compared to the 109.8 trillion hashes level from the start of the year.

The growth in the Difficulty has been pretty similar to that in the Hashrate, a natural consequence of the former reacting to the latter.

BTC Price

Bitcoin saw recovery above $89,000 earlier, but it seems the rally couldn’t last as the asset is already back at $87,300.

Japan’s upcoming tax reform is expected to restructure the way crypto assets are treated in the country next year, changing digital assets classification and introducing a separate taxation system for different transactions.

Japan Proposes New Taxation System

On Friday, local news media outlets shared key details of Japan’s upcoming FY2026 Tax Reform Outline, published by the Liberal Democratic Party and the Japan Innovation Party on December 19.

CoinPost reported that the 2026 tax reform will introduce significant changes to current taxation system related to the classification and regulation of crypto assets, which have been long requested by Japanese investors.

Notably, the plan has proposed classifying digital assets as financial products, which indicates a shift from their previous treatment as speculative assets. As a result, the reform is exploring the introduction of a separate taxation system to crypto income, similar to stocks and investment trusts.

According to the report, separate taxation and comprehensive taxation may not cover the same transactions. Under the existing system, crypto gains are taxed as “miscellaneous income,” with rates reaching up to 55%. The regular taxation system and miscellaneous income reporting may still apply depending on the transaction type.

The reform outlines that crypto spot trading, derivative transactions, and Exchange-Traded Funds (ETFs) would be subject for the separate taxation system. However, there’s no specific mention of reward-based transactions like staking or lending, suggesting that the applicable income category and taxation method for these transactions will require future addressing.

Its worth noting that taxation for these transactions is split between the time of acquisition and the time of sale. When crypto assets are received as a reward for activities like staking, it is valued at market price at the time of acquisition and taxed as miscellaneous income. If the rewards are sold later, the resulting capital gain is subject to additional taxation.

Meanwhile, Non-Fungible Tokens (NFTs) will likely remain subject to the comprehensive taxation, as the reform doesn’t explicitly mention them, suggesting that NFTs trading and similar activities could continue to be treated as miscellaneous income and fall under the comprehensive taxation.

Tax Reform To Separate ‘Specified Crypto Assets’

The local news outlet also highlighted that the separate taxation system may apply only to limited cryptocurrencies, as the reform stipulates the new taxation and reporting system for crypto trading business “businesses based on the premise of ‘trading in specified crypto assets.’”

This could suggest that the “specified crypto assets” mentioned in the tax reform outline may not include all digital assets, but could be limited to those within a certain institutionally defined scope.

“Based on the outline’s wording, it is an important point to note that not all cryptocurrency transactions will uniformly fall under the new system; rather, a system design delineating a specific scope is likely to be implemented,” the report detailed.

Moreover, the 2026 tax reform outlined a proposal to allows losses from crypto transactions to be eligible for carryforward deductions for up to three years, similar to FX and stock policies in Japan.

The introduction of carryforward deductions is expected to make tax adjustments easier, as investors previously had to offset unrealized losses against gains in profitable years to reduce taxable income.

Lastly, the report noted the potential introduction of an exit tax in the future. Under the current system, crypto assets are not subject exit tax upon leaving Japan. However, the reclassification as financial instruments under the Financial Instruments and Exchange Act could open the door to a system where unrealized gains become taxable upon departure

In a recent report, market expert Colin Wu shed light on the ongoing issues facing the cryptocurrency industry as a result of stablecoin legislation, notably the GENIUS Act, which was enacted in July under President Donald Trump’s administration. 

While this bill is viewed as a significant win for the digital asset market—anticipating increased adoption and utilization in the foreseeable future—it brings with it a host of complications that warrant attention.

Wu Highlights Potential Risks In The GENIUS Act

Wu’s analysis emphasizes that the GENIUS Act has led to heightened global demand for US dollars and Treasury securities, which, while bolstering the dollar’s international standing, has also inadvertently benefited the Trump family and associates linked to the crypto industry. 

However, this development has opened new challenges for the oversight of dollar flows globally and raises concerns about the stability of the traditional financial system in the United States.

A notable concern is how the trading of crypto assets enabled by USD stablecoins has evolved into a complex and less observable method for the US to extract wealth worldwide. Wu asserts that this mechanism poses significant threats to the monetary sovereignty and financial security of other nations.

The GENIUS Act outlines reserve asset categories like bank deposits, short-term Treasuries, and repo agreements. However, the fluctuating values of these assets can lead to potential insufficiencies in reserves, particularly if Treasury prices decline. 

How Stablecoin Laws May Undermine The Industry’s Foundations

Wu also explained that addressing the challenges of fiat stablecoins, lawmakers are likely to instigate regulations affecting all crypto assets, including Bitcoin (BTC) and Real-World Assets (RWAs), since these assets rely heavily on stablecoins.

Currently, licensed financial institutions cannot directly engage in trading, clearing, or custody of crypto assets due to the lack of legal recognition, leaving these opportunities to unregulated private firms. 

This scenario has reportedly led to higher profits for unregulated actors while increasing pressure on banks and the broader financial ecosystem. Consequently, this dynamic has prompted government authorities to hasten stablecoin regulation.

Once crypto assets receive full legal recognition, banks are expected to step into the market completely. This shift would enable banks and payment institutions to tokenize deposits, allowing them to directly link deposit tokens with traditional financial elements.

The overall trend in the US indicates a move toward a system where heavily regulated banks establish stability. This shift would reportedly facilitate the principle of “same business, same regulation,” leading to diminished risks for the monetary and financial structure.

However, this transformation through stablecoin legislation may threaten the very foundation of the stablecoin industry itself. Wu concludes that in this context, it would be illogical for other nations to replicate the aggressive push for stablecoin development that the US has adopted. 

Featured image from DALL-E, chart from TradingView.com 

Keonne Rodriguez, a co-founder of the Bitcoin privacy tool Samourai Wallet, began serving a five-year sentence and wrote a letter from inside a US federal prison on Christmas Eve.

The letter, shared publicly, offers a short, personal account of intake procedures, the move into housing, and his first days behind bars. He wrote that the place was “confusing and unnatural”, yet “manageable”, and that fellow inmates had treated him with respect.

Inside The Prison Letter

Rodriguez wrote that he had gone through searches and medical checks during intake, and that he was settling in after what he called an emotional goodbye to family days before the holiday.

The note was dated Christmas Eve and marked his seventh day at the facility. Reports said his wife was scheduled as his first visitor on Christmas Day. Those details make the timing — and the human side of the story — hard to miss.

Rodriguez was sentenced on Nov. 19 on charges tied to his role in a crypto mixing protocol. His case has become a touchpoint for a wider dispute about whether building or maintaining privacy software can carry criminal liability when others misuse those tools.

The debate has drawn comparisons to the prosecution of Roman Storm, a co-founder of Tornado Cash, and raised questions about how the law treats open-source code and the people who write it.

Samourai: Legal Debate Over Code And Crime

Supporters say Rodriguez’s prosecution threatens free speech and software development. A petition asking for clemency gathered more than 12,000 signatures, and many privacy advocates argue that no direct victims were harmed by his work.

In public posts, Rodriguez framed his case as “lawfare” and criticized regulators and judges for targeting innovation. Those claims have been repeated widely in crypto circles.

Prosecutors argue differently. They point to the structure and promotion of certain tools and say some actors used them to hide illicit transfers.

Courts have faced the hard question of where to draw the line between code as neutral technology and code used to facilitate crime. That tension is central to why Rodriguez’s sentence has drawn such attention from developers, legal scholars, and privacy groups.

Samourai Drama: Calls For Clemency Gain Traction

US President Donald Trump said on Dec. 16 that he would “take a look” at Rodriguez’s case after it gained public attention. That brief remark kept the possibility of executive clemency in public view, though such reviews do not always lead to action. Rodriguez publicly appealed to the president for a pardon as he began serving his sentence.

Public reaction has been mixed. Some see the petition and media coverage as a push to protect open-source developers. Others stress that courts will weigh evidence about intent and conduct, not just the code itself.

What remains clear is that this case has pulled the issue into the open and made it harder for lawmakers and courts to ignore.

Featured image from Cyber Security News, chart from TradingView

Russian President Vladimir Putin has reportedly said that the United States is interested in using Zaporizhzhia’s nuclear electricity for crypto mining.

US & Russia Are In Talks About Zaporizhzhia Nuclear Power Plant

Russia and the US are negotiating joint control of the Zaporizhzhia nuclear power plant, according to a report from Kyiv Post, citing Russian business newspaper Kommersant. The Zaporizhzhia nuclear power plant is located in Southeastern Ukraine and is the largest nuclear energy facility in Europe. It used to be responsible for more than a fifth of the electricity in Ukraine, but in 2022, Russian forces captured it, and it has since ceased power generation.

It would now appear that discussions have emerged about the future use of the power plant. As per the report, Vladimir Putin said at a meeting with major business figures on Christmas Eve that the US is interested in using the plant’s electricity for crypto mining and for supplying power to Ukraine.

Crypto mining, the most prominent example of which is Bitcoin mining, can be an energy-intensive process, leveraging computing power to solve mathematical puzzles that allow the operator to have a chance at adding the next block to the blockchain.

Crypto mining has features like portability and modularity that have made many consider its application in using waste or excess energy in power grids to produce value in the form of digital assets. On a global scale, Bitcoin mining has seen some rapid expansion during the past three years, with the Hashrate, a measure of the network’s total computing power, expanding by almost five times.

Restarting the Zaporizhzhia nuclear power plant for crypto mining, or any other purpose, however, wouldn’t be a simple task. By late 2022, all six reactors of the plant were shut down, with five of them being put in a state of cold shutdown.

One reactor was kept in hot shutdown to produce steam for nuclear safety purposes. Even so, the plant isn’t in a state where a restart is possible, according to the International Atomic Energy Agency (IAEA). As the IAEA wrote in a press release earlier this year:

Nuclear safety remains precarious at Ukraine’s Zaporizhzhya Nuclear Power Plant (ZNPP) and its six reactors cannot be restarted as long as the military conflict continues to jeopardize the situation at the site, Director General Rafael Mariano Grossi told IAEA Member States this week.

Given this context, it only remains to be seen whether any reported negotiations around the nuclear power plant will actually lead it to be used for any energy-related purpose, crypto mining or otherwise.

Bitcoin Price

At the time of writing, Bitcoin is trading around $88,600, up 1.3% over the last 24 hours.

Bitcoin is struggling to regain market confidence as sentiment continues to deteriorate and apathy dominates trading behavior. Price remains capped below the $90,000 level, with repeated recovery attempts failing to gain traction. As volatility compresses and participation thins, an increasing number of analysts are warning that the market may face further downside before stability can return. For now, conviction on both sides remains limited, leaving Bitcoin vulnerable to renewed selling pressure.

On-chain data underscores this fragile backdrop. A recent report by Axel Adler examines daily capital inflows and outflows across the Bitcoin network, using a seven-day moving average of net capital flow to assess market health.

This metric captures the balance between realized profits, which represent capital entering the network, and realized losses, which reflect capital being destroyed through loss-making sales. When the net flow turns negative, it signals that participants are selling at a loss more aggressively than they are taking profits.

Currently, the seven-day average stands at approximately negative $160 million, meaning the market has been losing an average of $160 million in capital per day over the past week. The period between December 17 and 24 was marked by sharp volatility, with large outflows interspersed with brief positive days. Although December 25 saw another net inflow, it was not enough to offset prior losses.

Elevated Coin Activity Signals Distribution Under the Surface

On-chain data highlighted by Adler shows that Bitcoin remains unusually active despite weak market conditions. The Bitcoin “% Supply Active (Last 180 Days)” metric tracks the share of total BTC supply that has moved at least once over the past six months.

Currently, that figure stands at 31.79%, slightly above its 30-day average of 31.43% and firmly in the 80th percentile compared with historical data. Activity has also risen sharply on a year-over-year basis, up 14.4%, indicating that coins are changing hands far more frequently than they were a year ago.

At face value, elevated activity can sometimes signal renewed interest or accumulation. In the current context, however, it carries a more cautionary implication. High supply activity is occurring alongside a negative net capital flow regime, meaning that much of this movement reflects loss-making sales rather than profitable distribution. Coins are not simply rotating between long-term holders; they are being sold under pressure.

This combination challenges the idea that the market is simply apathetic. Instead, it points to active distribution, with holders choosing to exit positions despite unfavorable prices. The distinction is important: apathy implies indecision, while distribution suggests stress.

For this metric to turn constructive, elevated activity would need to persist while net capital flows recover toward zero or positive territory. Only then would increased coin movement begin to reflect accumulation rather than capitulation.

Bitcoin Stabilizes As Key Trend Loses Momentum

Bitcoin is trading around the $88,700 level on the 3-day chart, attempting to stabilize after a sharp correction from the $120,000–$125,000 highs set earlier in the year. While the broader uptrend that began in 2024 remains technically intact, the current structure reflects a clear loss of momentum and a transition into a corrective phase. Price action has shifted from strong impulsive moves to choppy consolidation, highlighting growing uncertainty among market participants.

From a technical perspective, Bitcoin is now trading below its faster-moving average, which has rolled over and begun acting as dynamic resistance. The loss of this level marked a decisive change in market character, confirming that rallies are being sold rather than extended.

At the same time, price is hovering just above the rising longer-term moving average, which continues to provide structural support and defines the boundary between a healthy correction and a deeper trend reversal.

Volume dynamics reinforce the cautious outlook. The most aggressive volume expansion occurred during the sell-off from above $110,000, while the recent rebound toward $88,000 has unfolded on relatively muted participation. This suggests that selling pressure has eased, but buyers have not returned with conviction.

Structurally, the $86,000–$90,000 range is critical. Holding above this zone preserves the broader bullish framework. However, a failure to reclaim the $95,000–$100,000 region would keep Bitcoin vulnerable to renewed downside pressure in the weeks ahead.

Featured image from ChatGPT, chart from TradingView.com 

Timing a Bitcoin purchase has always been one of the hardest challenges for investors, especially in the current market, which is defined by low sentiment and bearish price action. The safest moment to buy usually arrives after prices have already surged, when confidence is high, and risk is low. 

However, a recent message from Changpeng Zhao has pushed back against that instinct. Zhao’s Christmas message offers a realistic perspective on what a perfect Bitcoin buy actually looks like in practice.

Fear, Not Euphoria, Is Where Strong Entries Form

The idea of a clean, comfortable Bitcoin entry is a myth. Strong buying opportunities rarely show up during periods of excitement or bullish headlines, and most people who buy during this period buy close to the top. Instead, buying opportunities tend to appear when the market feels heavy, price action looks weak, and sentiment has turned decisively negative.

In a Christmas message shared on social media, Changpeng Zhao addressed a common regret that many investors feel when prices rally to new highs. He asked whether people who watched Bitcoin reach all-time highs ever wished they had bought earlier. 

According to Zhao, those who bought early and made the most gains during rallies did not enter at the top. They bought during periods dominated by fear, uncertainty, and doubt, not when sentiment was rosy. The moments investors later wish they had acted are usually the same moments when confidence was lowest, and headlines were negative, much like the current state of Bitcoin and the entire crypto market.

Sentiment Is In the Red: Fear Dominates the Market

One of the most referenced tools for gauging crypto investor mood, the CMC Crypto Fear and Greed Index, is currently reading around 27, which is in the fear threshold. 

Sentiment indicators like this matter because they reflect collective behavior. The index sitting at 27 puts today’s sentiment in the same context as past phases where patient accumulation eventually delivered strong returns.

Interestingly, the CMC Index has been steadily pushing away from negative territory in recent weeks. The current 27 reading is much better than the 21 reading last week and the 15 reading a month ago. This relates to Bitcoin’s price action since then, which has started to steady just below $90,000. 

A sustained recovery above $90,000, supported by a few strong daily closes in the next few days, could help sentiment across the broader crypto market move out of fear and into neutral territory. If that transition takes hold, optimism would likely follow, and sentiment will start to turn green. By the time sentiment turns positive green, many investors will start to realize that the most attractive entry opportunities are already behind them.

Ethereum is trading below the $3,000 mark as it attempts to push higher and reclaim key structural levels needed to signal the start of a recovery. So far, those efforts have failed. Price remains capped by persistent resistance, and market confidence continues to deteriorate.

While short-term bounces have emerged, most analysts and investors expect the broader downtrend to continue, arguing that Ethereum lacks the demand and momentum required to sustain a meaningful reversal. Sentiment has turned deeply pessimistic, with traders increasingly positioned for further downside rather than recovery.

On-chain and technical data reinforce this cautious outlook. A recent CryptoQuant report shows that after Ethereum’s steep decline from its $4,800 peak, the price has become trapped in a narrow range centered around the $2,800 level for nearly a month. This zone has effectively turned into a state of market purgatory. Bulls have been unable to generate the conviction needed to reclaim higher highs, while bears have repeatedly failed to force a decisive breakdown below support.

The result is a prolonged phase of volatility compression. Price action has tightened, signaling widespread indecision among market participants and a lack of directional commitment. Historically, such compression often precedes a sharp move, but the direction remains uncertain.

Muted Layer-2 Flows Reflect Ethereum’s Stalemate

A recent report from CryptoOnchain highlights that Ethereum’s price stagnation is being closely mirrored by on-chain behavior. Weekly ETH netflows on Arbitrum, one of Ethereum’s most important Layer-2 networks and a common proxy for smart-money positioning and DeFi activity, remain subdued and highly choppy.

Rather than showing a clear inflow or outflow trend, the data reflects a market operating without strong conviction, reinforcing the idea that larger participants are choosing to remain on the sidelines.

This lack of directional flow suggests that capital is not aggressively entering or exiting the ecosystem. Instead, investors appear to be waiting for clearer macroeconomic signals or a definitive shift in market structure before committing.

In previous cycles, sustained expansions in Arbitrum netflows have often coincided with periods of renewed risk appetite or decisive trend changes. The current inactivity stands in sharp contrast to those environments.

The alignment between compressed price action around key support levels and dormant on-chain activity points to a buildup of latent energy within the market. Ethereum is effectively coiling. While this equilibrium can persist for extended periods, it rarely resolves quietly. When the balance breaks, moves tend to be swift and forceful.

Arbitrum netflow is now a critical metric to watch. A sudden and sustained expansion in flows could act as an early signal that this prolonged phase of indecision is nearing its resolution, potentially setting the direction for Ethereum’s next major move.

Ethereum Stabilizes Near $3,000 as Downtrend Pressure Persists

Ethereum is trading near the $2,970 level on the daily chart, attempting to stabilize after an extended decline from the $4,800 highs recorded earlier this cycle. While recent candles show modest recovery attempts, the broader structure remains fragile. ETH continues to print lower highs and lower lows, signaling that bearish momentum has not yet been invalidated despite short-term relief bounces.

Technically, price remains below its key daily moving averages. The faster moving average has rolled over sharply and is acting as immediate resistance, while the 111-day and 200-day simple moving averages converge in the $3,300–$3,600 range. This cluster forms a heavy overhead supply zone, limiting the probability of a sustained upside move unless volume and momentum expand meaningfully.

The recent bounce from the $2,800–$2,900 area has helped Ethereum avoid a deeper breakdown for now. However, this move has occurred on relatively muted volume, suggesting a lack of conviction from buyers. In contrast, the initial leg lower was accompanied by strong selling pressure, reinforcing the idea that the dominant trend remains to the downside.

From a structural standpoint, the $2,800 level remains critical support. A decisive break below this zone would likely accelerate losses and confirm bearish continuation. Conversely, for Ethereum to shift momentum, price must reclaim $3,200–$3,300 and hold above its declining daily averages.

Featured image from ChatGPT, chart from TradingView.com 

The recent surge in Bitcoin (BTC) volatility has led to significant liquidations, prompting renewed suspicions of market manipulation among experts. 

Institutional Sell-Off? 

A detailed analysis by market expert NoLimit on the social media platform X (formerly Twitter) reveals that, at the time of the stock market opening, BlackRock’s Bitcoin exchange-traded fund (ETF) IBIT transferred hundreds of millions of dollars’ worth of Bitcoin into Coinbase Prime wallets. 

This timing and location indicate a pattern that institutions often follow when selling their assets. As explained, these coins are not sent to Coinbase Prime merely to remain inactive; they are typically directed there for sale or liquidity management purposes.

NoLimit asserts that when a major player like BlackRock needs to liquidate assets or meet redemption demands, the price of Bitcoin reacts rapidly. 

He suggests that this situation reflects a combination of factors: selling related to ETFs taking place during low liquidity, inventory management in anticipation of upcoming volatility, and risk reduction in light of a significant derivatives event.

Bitcoin Faces Sharp Decline

Compounding these concerns, technical analyst OxNobler highlighted further developments that contributed to the recent downturn, detailing significant sell-offs by various trading platforms. 

In a rapid succession of transactions, Binance reportedly sold 10,155 BTC, Wintermute let go of 5,354 BTC, Coinbase disposed of 10,113 BTC, BlackRock sold 4,945 BTC, and Kraken moved 4,630 BTC. 

Collectively, these actions amounted to over $2.5 billion worth of Bitcoin sold within a mere 30 minutes, raising suspicions of coordinated market manipulation.

According to analysts from Bull Theory, the situation has taken a dire turn, with Bitcoin plummeting by $2,300 and liquidating $66 million in long positions in just 45 minutes. 

Against this backdrop, $60 billion has been wiped from the crypto market without any negative news triggering such a drastic shift. This scenario has led them to assert that manipulation continues to be a significant concern within the broader crypto market. 

At the time of writing, BTC was trading at $87,340, down slightly more than 30% from its all-time highs set earlier in October. 

Featured image from DALL-E, chart from TradingView.com 

While the price of Bitcoin and Ethereum is still struggling with heightened volatility in the crypto market, the balance of trading activity among the two leading digital assets is quietly shifting. This current pivot is sighted across cryptocurrency exchanges as the number of trades displaying a distinct action.

Traders Pivoting From Bitcoin To Ethereum

Amid the ongoing volatile market phase, a growing disparity has been observed among traders of Bitcoin and Ethereum, the largest cryptocurrency assets. In the report from Alphractal, an advanced investment and on-chain data analytics platform, it appears BTC traders are gradually considering ETH.

After examining the action of investors, Alphractal revealed that the number of perpetual market trades completed for BTC across major crypto exchanges has dropped drastically, which indicates a drop in short-term activity. At the same time, the number of trades for ETH has increased as the altcoin grabs a growing share of overall trade flow, signaling renewed involvement from traders and on-chain players.

According to the platform, more trades are now being processed in ETH, putting the altcoin ahead of Bitcoin in terms of traders’ conviction. This difference reveals a shifting market dynamic in which focus and liquidity are slowly shifting from the consolidation phase of Bitcoin to the growing ecosystem and use-driven activities of Ethereum.

It is worth noting that the market experienced the highest number of leveraged trades in the history of BTC between August and November. During the period, over 19 crypto exchanges, including BitMEX and HyperLiquid, recorded up to 80 million trades in a single day, marking their highest level. However, this activity has remarkably decreased, and the 7-day average is now positioned at just 13 million trades. Such a trend implies a drastic contraction in leveraged trading activity.

On the other hand, Ethereum also experienced a surge in 2025, reaching a peak of nearly 50 million trades. What is noteworthy is that the number of recent Ethereum trades is still far higher than that of BTC. Data shows that the 7-day average for ETH is about 17.5 million trades, indicating a clear divergence between the two crypto leaders.

BTC Now In A Reset Phase Following Reduced Trades

Furthermore, this demonstrates that in the perpetual futures market, BTC and ETH exhibit distinct behavioral patterns. Following the massive liquidation event in October, the market turned extremely cautious toward Bitcoin and leverage itself. 

Alphractal noted that the impact of this divergence is evident in the largest Open Interest (OI) drawdown in the history of Bitcoin. In the meantime, the platform believes that Bitcoin is currently in a reset phase. Meanwhile, it will take a long time before conditions go back to normal and institutional and whale interest resumes.

At the time of writing, the Bitcoin price was trading at $88,875, demonstrating a 1.33% rise in the last 24 hours. Its trading volume has also followed suit, attracting a more than 43% increase over the same time period.

A pundit has stirred conversation in the crypto community by suggesting that XRP holders could see unprecedented wealth, potentially reaching millionaire or billionaire status. He cites the evolving crypto regulatory landscape in the United States (US) and XRP’s potential to play a significant financial role in the economy, which could drive strong demand and value growth for the altcoin. 

Why XRP Holders Are Poised For Extraordinary Wealth

Joshua Dalton, the founder of Triblu, an unfunded IT services company, predicted in an X post that XRP holders could become millionaires, billionaires, trillionaires, and even quadrillionaires. He stated that while Bitcoin enthusiasts, including Strategy founder Michael Saylor, may see little to no gains from the token in the future, community members are uniquely positioned to achieve extraordinary wealth. 

In his post, Dalton characterized the altcoin as a unique opportunity for financial growth, potentially surpassing what Bitcoin offers. Trading at just $1.86 compared with Bitcoin’s value of more than $88,000, XRP’s low price gives its investors a notable advantage. This affordability could prove especially beneficial to creating wealth if the cryptocurrency experiences a major price surge in the future. 

In Dalton’s case, the focus is not on price differences but on the potential impact the token could have on the US economy if it becomes a reserve currency. He argued that Bitcoin cannot serve as the official currency for the US reserves because its creator, Satoshi Nakamoto, remains unknown. He also suggested that Bitcoin could potentially be controlled or operated by China, making it untrustworthy and unreliable for national financial purposes.

On the other hand, the Triblu founder noted that the government can fully trust XRP because it is operated by Ripple and entirely based in the United States. Dalton emphasized that, unlike Bitcoin, the altcoin has the capacity to address the national challenges, including the roughly $38 trillion debt crisis. He framed it as a more reliable and strategically valuable asset for the country, highlighting its capacity to support large-scale economic stability in ways that Bitcoin cannot. 

XRP’s Potential Amid Evolving US Regulations

Dalton’s remarks about XRP being a better reserve currency than Bitcoin for the US come amid evolving regulatory developments in the country. In January, President Donald Trump signed an executive order establishing a national reserve for Bitcoin and other altcoins, fueling rumors that the token could be included in the reserve. 

Additionally, this year, the US House of Representatives has passed multiple crypto-related bills, including the CLARITY ACT, GENIUS ACT, and the Anti-CBDC Surveillance State Act. These legislative measures are expected to positively influence the regulatory landscape for cryptocurrencies, potentially fostering wider adoption, increasing investor confidence, and creating a more stable environment for digital assets. 

This is particularly significant for XRP, especially following the resolution of its legal battle with the US Securities and Exchange Commission (SEC), which has strengthened its legitimacy and growth prospects.

The XRP Ledger (XRPL) continues to evolve as Ripple pushes forward with new technical upgrades to strengthen network reliability, expand future use cases, and improve overall network performance. A recently released amendment report highlights several key developments that investors may want to track closely, as these could spark significant changes for the network by 2026. 

Upcoming XRP Ledger Developments

Ripple rolled out the XRPL version 3.0.0 earlier this month, introducing five new amendments currently under review by validators. These proposed changes directly address issues related to price-oracle sorting, token-escrow accounting errors, missing ledger-entry files, Automated Market Maker (AMM) rounding issues, and more. 

Investors are paying close attention to these amendments, as they directly affect asset pricing, accounting, and tracking on the XRP Ledger. These areas can also influence risk assessment and confidence among market participants.

The five active amendments in Rippled 3.0.0, currently open for voting by January 2026, include:

• fixAMMClawbackRounding
• fixIncludeKeyletFields
• fixMPTDeliveredAmount
• fixPriceOracleOrder
• fixTokenEscrowV1

Firstly, the fixAMMClawbackRounding amendment resolves an accounting issue that can occur during AMM clawback transactions involving the final Liquidity Provider (LP) token holder. Previously, rounding errors could create mismatches between AMM balances and trust lines. The newly proposed update ensures these balances remain aligned, allowing invariant checks to function correctly. 

The second amendment, fixIncludeKeyletFields, adds missing identifying fields to several ledger entries. This includes escrow and payment channel sequence numbers, owner fields for signer lists, and document IDs for Oracle entries. The update makes it easier to reference and manage objects within the XRP Ledger. 

The fixMPTDeliveredAmount amendment restores missing DeliveredAmount metadata for direct Multi-Purpose Tokens (MPT) payment transactions. While payments already deliver the correct amounts, the added metadata from the proposed update makes it easier for investors and developers to see and verify what was actually delivered.

To ensure more reliable price data, the fixPriceOracleOrder amendment addresses inconsistencies in how asset pairs are ordered in price oracle entries. By enforcing a consistent order, the change allows applications and users to look up asset prices seamlessly. 

The final amendment, fixTokenEscrowV1, aims to improve accounting accuracy. It corrects an error affecting MPT escrows that include transfer fees. The update ensures that issuer-locked balances and the total supply are reduced by the correct net amounts when escrowed tokens are unlocked, improving the transparency of XRPL. 

XRPL Plans New Institutional Lending Protocol By 2026

Edward Hennis, a software engineer at Ripple, has announced an upcoming XRPL Lending Protocol that is set to transform on-ledger lending. According to Hennis, the protocol will offer fixed-term, fixed-rate, and underwritten credit designed for institutions. 

In his post on X, the Ripple engineer revealed that each loan on the ledger will operate within a Single Asset Vault that isolates risks and allows either private or public contributions. He stated that the protocol is expected to be available for voting by January 2026. Hennis also revealed that Market Makers, PSPs, and fintech lenders will be able to access XRP and RLUSD for a range of institutional use cases through the upcoming lending protocol.

Ongoing volatility across the cryptocurrency market continues to hamper XRP from posting a rally, as recent upward attempts face significant resistance at the $2 price level. However, this persistent downward trend has not entirely crushed the sentiment of investors, especially whale holders.

Large Holders Of XRP Are Stepping Back In

XRP has been in a downward trend for the past few weeks due to a market drawdown in October. After several weeks of subdued price performance and failed upward attempts, key investors are beginning to exhibit positive sentiment towards the leading altcoin.

As observed in the report from Steph is Crypto, a market expert and trader, large investors, also known as whale holders, are making their presence felt once again. Despite the ongoing bearish action of the XRP’s price, there is a steady resurgence in accumulation among the cohort.

While this shift signals growing confidence of deep-pocket investors, it also suggests that they are likely repositioning themselves in anticipation of a broader market move upward. When whale investors start to buy again, it often precedes upward spikes, which raises the question of whether the accumulation could serve as the foundation for the altcoin’s next major direction.

According to the expert, the renewed buying pressure is triggered by large investors holding between 100 million XRP and 1 billion XRP. After days of significant adoption from the group, the total number of coins held by them grew from 8.11 billion to 8.23 billion XRP, valued at approximately $150 million.

A similar resurgence in sentiment and investor activity is also observed among those holding between 10 million and 100 million XRP. Data from the chart shows that these investors now hold about 10.90 billion compared to the 10.88 billion a few days ago. 

Despite large investors buying again, Steph is Crypto believes that the renewed accumulation is more of a cautious move than a bullish move. However, should the trend continue over the following days or weeks, the altcoin may attract enough momentum for an upward move.

Nearly Half Of The Supply In Loss

With XRP’s price declining and trading below the $2 mark, a lot of coins are starting to show major losses. According to on-chain data, the profitability of holders has sharply declined amid the ongoing bearish phase. In a previous post, Steph is Crypto highlighted that nearly 50% of the altcoin’s total supply is now underwater, suggesting a shift in attitude where patience and selectivity are replacing optimism.

The chart shared by the expert shows that the share of XRP supply currently in profit has dropped to 52% following weeks of consistent declines. While nearly half of the total supply held by investors is sitting at a loss, this development increases the risk of panic-driven selling pressure during periods of weakness, as seen in the past. 

However, this cooling in profitability often marks a pivotal phase, as it could still act as a trigger for a notable rally in the upcoming days or weeks. According to the expert, the last time profitability dropped to this level was in November 2024, just before a major upside expansion.

Developers on Ripple’s XRP Ledger (XRPL) have revealed progress on making the network quantum-resistant. This comes as some Bitcoin advocates and developers downplay the imminent risk posed by quantum computing, stating that it is unlikely to be a concern anytime soon. 

Ripple’s XRP Ledger Works On Quantum-Resistant Code

In an X post, Ripple’s XRP Ledger validator Vet revealed that developers are already working on quantum-resistant code on the network. This came as he drew attention to a fully quantum-proof XRPL, including consensus, which is currently in testnet. This marks progress for the network, even as it achieves something that networks like Bitcoin still lag on. 

Vet indicated that creating a quantum-proof XRP Ledger is likely to come with some disadvantages for the network. He stated that one of the downsides of these encryptions is the size of the signatures. He shared a video showing that transaction signatures for payment on the quantum XRPL are much longer than on the XRPL mainnet. 

Vet’s post followed the revelation by XRPL Labs engineer Dennis Angell that the AlphaNet, the developer network for XRPL, is now fully quantum-secure. Angell mentioned that the testnet now has quantum consensus, quantum accounts, quantum transactions, and dilithium cryptography. He further remarked that they had added native smart contracts while declaring that the quantum-resistant future of blockchain is live. 

Notably, this move comes as Ripple and the XRP Ledger look to onboard more institutions onto the network. Concerns about quantum computing are on the rise, with Bitcoin in the spotlight at the moment, as developers have yet to make meaningful progress on making the flagship crypto quantum-resistant. 

Following the XRP Ledger’s progress on making the network quantum-resistant, crypto pundit Jenna questioned the possibility of Bitcoin investors selling their BTC because it’s not quantum-resistant and then buying XRP because it is safer. Another pundit, Mickle, also noted how the XRP Ledger is already pretty much quantum-proof while Bitcoiners argue over whether quantum computing is real or not. 

Why Working Towards Quantum-Resistant Transactions Matters

In an X post, crypto pundit Sandip noted that blockchains such as Bitcoin, XRP Ledger, and Ethereum rely on ECDSA cryptography. This puts them at risk, as a sufficiently powerful quantum computer could theoretically break them in the future. He then remarked that testing this early ensures the network is future-proofed against the time when quantum computers become powerful enough to break these networks.

Meanwhile, Sandip explained that these XRP Ledger developers are testing optional and upgradeable signature schemes. This will ensure that wallets and validators can later support post-quantum keys. It also enables a smooth migration before quantum risk becomes real. The pundit added that this is long-term infrastructure planning, not price manipulation, as it puts the XRPL ahead of many competitors, including Bitcoin. 

Venture capitalist Nic Carter, who has been very vocal about the quantum risk to Bitcoin, has explained why it is important to start preparing against this risk from now. He highlighted how there are several decisions to be made and processes to be taken if developers are to successfully make the flagship crypto quantum-resistant. 

Trust Wallet says a “security incident” hit only one slice of its product stack: the Chrome browser extension on version 2.68. If you are a mobile-only user, the company says you’re not affected. If you are on any other extension version, the company says you’re not affected either. The problem, per Trust Wallet’s own wording, is tightly scoped, even if the fallout doesn’t feel that way when you’re staring at an emptied address.

The first public flare went up on Dec. 25 via on-chain investigator ZachXBT, who posted a Telegram warning that “a number of Trust Wallet users have reported that funds were drained from wallet addresses within the past couple of hours.”

He stressed that “the exact root cause has not been determined,” then pointed out an uncomfortable coincidence: “the Trust Wallet Chrome extension pushed a new update yesterday.” In the same message, he asked victims to DM him on X so he could “update the list of theft addresses below as I verify more,” and he began publishing alleged theft destinations across multiple chains. His list included multiple EVM addresses and a Solana address.

NEW: @zachxbt SAYS “A NUMBER OF TRUST WALLET USERS HAVE REPORTED THAT FUNDS WERE DRAINED FROM WALLET ADDRESSES WITHIN THE PAST COUPLE OF HOURS”

SOURCE: https://t.co/4shDweZnJF pic.twitter.com/MkbQWZKGCc

— DEGEN NEWS (@DegenerateNews) December 25, 2025

Trust Wallet Confirms The Hack

The wallet firm later confirmed the incident on X. “We’ve identified a security incident affecting Trust Wallet Browser Extension version 2.68 only. Users with Browser Extension 2.68 should disable and upgrade to 2.69,” the company wrote, linking users to the official Chrome Web Store listing.

It added: “Please note: Mobile-only users and all other browser extension versions are not impacted.” The post closed with the kind of line every security team ends up typing sooner or later: “We understand how concerning this is and our team is actively working on the issue. We’ll keep sharing updates as soon as possible.”

Then the guidance got more urgent, and more specific. Trust Wallet warned users who hadn’t updated to 2.69: “please do not open the Browser Extension until you have updated. This may help to ensure the security of your wallet and prevent further issues.”

We’ve identified a security incident affecting Trust Wallet Browser Extension version 2.68 only. Users with Browser Extension 2.68 should disable and upgrade to 2.69.

Please refer to the official Chrome Webstore link here: https://t.co/V3vMq31TKb

Please note: Mobile-only users…

— Trust Wallet (@TrustWallet) December 25, 2025

In a follow-up, it spelled out a step-by-step that boils down to: don’t open the extension, go to Chrome’s extensions page for Trust Wallet, toggle it off if it’s still on, enable Developer mode, hit “Update,” and confirm you’re on version 2.69 before doing anything else. It’s not glamorous, but it’s actionable, which is what matters when you’re in incident mode.

As the claims and counterclaims swirled, cybersecurity firm PeckShield put an early dollar figure on the damage. “The Trust Wallet exploit has drained >$6M worth of cryptos from victims,” PeckShield wrote, adding that while about “~$2.8M of the stolen funds remain in the hacker’s wallets (Bitcoin/EVM/Solana), the bulk – >$4M in cryptos – has been sent to CEXs,” with a breakdown of “~$3.3M to ChangeNOW, ~$340K to Fixed Float, & ~$447K to Kucoin.”

One more pressure point surfaced quickly: compensation. ZachXBT said, “I currently have many concerned victims contacting me via DM so can your team please clarify if you will be offering any compensation for Trust Wallet Browser Extension users.” Trust Wallet did not answer that directly in public. Instead, it replied that its customer support team was already in touch with impacted users regarding next steps and directed people to reach out via its support channel.

So what should users do now, in plain terms? If you are on extension version 2.68, Trust Wallet’s instruction is to stop using it as-is: disable it and upgrade to 2.69 before you open it again. If you think you were affected, the company is routing users to support, while independent investigator ZachXBT is asking for reports to help map theft flows.

UPDATE: Binance founder Changpeng Zhao confirmed via X that user will be compensated for the hack. “So far, $7m affected by this hack. Trust Wallet will cover. User funds are SAFU. Appreciate your understanding for any inconveniences caused. The team is still investigating how hackers were able to submit a new version,” Zhao wrote today.

At press time, the total crypto market cap stood at $2.95 trillion.