Weekly Top Stories - 5/23

This week in the newsletter, we write about bitcoin reaching a new all-time high, the Senate stablecoin bill clearing a key vote, and Bancor’s lawsuit against Uniswap.

BTC Hits All-Time High

BTC reached a new all-time high of $112,000 on Thursday, May 22, continuing a week of decisive upward momentum. It broke through prior highs throughout the week, starting with Wednesday’s $109k, ripping past $110k, and touching $112k. The previous ATH was set on January 21, 2025, the day after Trump’s inauguration, at approximately $107k. From there, over the past four months, BTC experienced a sharp correction to $77k, a ~39% decline driven by tariff uncertainty, geopolitical instability, and a weakening macroeconomic outlook. At the time of writing, at 8 am on May 23, bitcoin has retreated along with global assets following Pres. Trump's announcement of 50% tariffs on Europe, though BTC remains near its prior all-time high in the $108k - $109k range.

This recent breakout is supported by signals across derivatives markets. Open interest across all exchanges hit an ATH, and the call-put ratio on major exchanges sits at 1.5. Meanwhile, short-term implied volatility has dropped to an 18-month low of 35 - 40%. This mix of bullish sentiment and compressed vol typically suggests excess leverage is building, and it likely served as a key driver in pushing BTC through resistance.

OUR TAKE:

The timing of BTC hitting ATH is remarkable. This rally is occurring in contrast to broader market weakness as U.S. equities (S&P 500 and Nasdaq 100) drop, and treasury yields rise. While gold has delivered a 1.7% return this week, its return cannot be compared to BTC’s 8.1%. BTC is increasingly behaving like a store of value as it moves in tandem with gold, but BTC outperforms it in both magnitude and momentum as BTC enters a new phase of price discovery.

The rally in BTC may have been sparked by Moody’s downgrade of the U.S. credit rating from Aaa to Aa1, citing unsustainable fiscal dynamics and a ballooning $36 trillion debt load. Following the announcement, equities, bonds, and the USD declined, while BTC and gold rose, an early signal that markets were repricing risk and looking toward non-sovereign assets.

The repricing continued throughout the week. Long-end U.S. Treasury yields rose significantly, with the 30-year yield reaching 5.14% on Thursday, its highest level since 2007. This was preceded by a weak 20-year auction on Wednesday, where investor participation faltered amid mounting concerns over fiscal deficits and growing debt.

Importantly, this dynamic is not isolated to the U.S. In Japan, yields on 30- and 40-year government bonds also hit ATHs this week following a poorly received auction, which was the weakest demand since 2012. The Bank of Japan’s reduction in bond purchases, coupled with a Q1 economic contraction, is creating structural challenges in Japan’s debt market. Long-end yields in the U.K., Canada, and Europe have also climbed, reflecting global investor unease around inflation, trade war, fiscal policy, and sovereign creditworthiness.

These developments have put a spotlight on debt sustainability on a global scale. In the U.S., that backdrop became even more complex on Thursday, when lawmakers advanced a substantial multi-trillion-dollar tax and spending package pushed by the Trump administration. The House Budget Committee approved a proposal incorporating SALT deductions and expansive tax cuts, which could add $5.2 trillion to the national debt and increase the federal deficit by $600 billion next fiscal year. This comes at a time when investor tolerance for deficit expansion is already showing signs of fatigue.

Against this backdrop, BTC and gold are emerging as preferred hedges. With traditional safe-haven assets under pressure, BTC’s non-sovereign, supply-constrained nature is gaining increased relevance. Meanwhile, regulatory tailwinds are beginning to support crypto markets as well. As we wrote last week, the SEC has continued to push forward on tokenization, opening the door for broker/dealers to handle digital assets. This could accelerate the integration of public blockchains with traditional capital markets and facilitate broader access to tokenized securities. In parallel, the GENIUS Act cleared cloture in the Senate this week, a key step forward for stablecoin legislation. As highlighted in a previous note, stablecoin regulatory clarity is essential not only for the crypto sector but also for the global standing of the USD. In the backdrop of a fragile bond market, stablecoins have the potential to reinforce demand for U.S. Treasuries, offering some relief to a weakened demand.

Institutional and sovereign adoption continues to provide consistent price support. On Monday, Strategy purchased 7,390 BTC, while Metaplanet acquired 1,004 BTC, which was its second-largest purchase to date. Strategy further filed to raise up to $2.1 billion through a 10.00% Series A perpetual preferred share issuance (STRF) to fund additional BTC accumulation on May 22. These actions reinforce a steady stream of corporate demand.

On the access front, JPMorgan announced it will offer BTC trading to clients, joining a wave of traditional financial institutions expanding into crypto. Other major banks – including Morgan Stanley, Merrill Lynch, and Wells Fargo – are either enabling or preparing to support crypto and crypto ETF trading. Meanwhile, ETF flows remain strong, with $3.9 billion in inflows since the start of May, further underscoring sustained institutional demand.

Altogether, BTC is increasingly trading in line with its foundational value proposition: a scarce, decentralized, and non-sovereign store of value. As it enters price discovery in a different macro environment, these attributes are becoming more salient. With next week's Bitcoin conference in Las Vegas on the horizon, bitcoiners are hoping for continued price appreciation, though history may not be on their side. – Jianing Wu

U.S. Senate Stablecoin Bill Clears Key Vote

U.S. Senate stablecoin bill clears key vote, set for floor debate ahead of likely passage. On Monday night, the U.S. Senate voted to enact cloture on the GENIUS Act, comprehensive stablecoin legislation, by a vote of 66-32. Then Wednesday, 3 additional Senators voted yes, with Sen. Moran (R-KS) and Sen. Warnock (D-GA) flipping their votes from N to Y, and Sen. Kelly (D-AZ) voting Y after previously not voting, bringing the final cloture vote tally to a whopping 69-31.

On Thursday, the Senate passed a motion to proceed on the debate by simple majority, which starts the process of formal floor debate in which senators can offer amendment, each of which would need 60+ votes to be added to the bill. After that process, as soon as late next week, the Senate will undertake a final vote on the bill’s passage with only a simple majority required.

If the Senate does achieve final passage of the bill, the House will then need to pass its own version (such as the STABLE Act), and then the two chambers would need to create a reconciled version to send to the President’s desk for signature, all of which could happen by Congress’s recess in August.

OUR TAKE:

Monday’s successful cloture vote, which effectively overcomes a filibuster, was the clearing of a key hurdle to the bill’s passage and followed a previously failed vote in which even the bill’s Democratic co-sponsors, Sen. Alsobrooks (D-MD) and Sen. Gillibrand (D-NY), voted no on May 8, which we wrote about 2 weeks ago. Since then, Republicans agreed to several changes to sway key Democrats, including a ban on stablecoin issuance by big tech companies, that ultimately led to 16 Democrats voting Y for cloture on Monday.

Opponents of the bill continue to allege that it lacks key consumer safety provisions, creates systemic risks, makes it easier for terrorists to transact, or is a handout to the crypto industry. The reality is that there are effectively no rules or regulations around stablecoin issuance today in the United States, and this bill creates a robust, strict federal oversight and regulatory regime far beyond what currently exists. To be clear, the crypto industry can already issue stablecoins today, as exhibited by the more than $250bn in USD-denominated stablecoins currently in circulation. The regulatory framework created by the GENIUS Act would enact new, strict standards for collateral management, AML/KYC, bankruptcy remoteness, customer protection, oversight and supervision, foreign issuers marketing in the U.S., and much more. A key provision banning the passage of yield to stablecoin holders is opposed by portions of the crypto industry but was included specifically to guard against systemic risks by reducing the likelihood of capital flight from banks and money market funds into stablecoins.

This is a dollar dominance bill, not a crypto bill. The crypto industry will face increased regulation, while traditional finance will finally have the clarity it needs to enter in earnest. The GENIUS Act upgrades the dollar, utilizing the settlement efficiency, transactional transparency, and self-custody capabilities of public blockchains to let the dollar flow worldwide like never before. At the same time, this bill will create enormous net-new demand for U.S. debt at a time when demand for sovereign debt worldwide is waning, including U.S. debt. These digital dollars will utilize a blacklist, not a whitelist, allowing anyone to transact without prior approval while maintaining the ability to freeze and seize assets to comply with OFAC sanctions or other legal orders. It represents the culmination of more than 5 years of work by blockchain innovators, think tanks, economists, intelligence officials, members of Congress, and the U.S. Senate. If it gets across the finish line, the GENIUS Act will be one of the most consequential overhauls of the U.S. payments and monetary system in decades, a major bipartisan achievement for the 119th Congress, and a victory for crypto, blockchains, and advocates for innovation. – Alex Thorn

Bancor vs Uniswap: A Landmark Patent Battle in DeFi

On May 20, 2025, decentralized finance platform Bancor filed a patent infringement lawsuit against Uniswap Labs and the Uniswap Foundation in the U.S. District Court for the Southern District of New York. Bancor alleges that Uniswap has used its patented Constant Product Automated Market Maker (CPAMM) model without proper authorization, a mechanism that uses mathematical formulas to govern the deposit and withdrawal of assets from liquidity pools. The CPAMM model, developed by Bancor in 2016 and patented in 2017, enables decentralized exchanges (dexes) to facilitate permissionless onchain token swaps via smart contracts, replacing traditional order books and centralized intermediaries. Bancor claims Uniswap has “profited greatly” from using this model without authorization, license, or partnership.

The lawsuit seeks damages and highlights concerns about preserving incentives for innovation in decentralized finance. Bancor currently holds a total value locked (TVL) of approximately $59 million, in contrast to Uniswap’s $4.87 billion. In response to the allegations, Uniswap founder Hayden Adams dismissed the suit as “possibly the dumbest thing [he’s] ever seen,” adding that he looks forward “to not thinking about this again” until a lawyer tells him he’s won.

OUR TAKE:

Patent infringement, especially involving failure to license patented technology, is a longstanding issue in the technology sector. In Web2, it has been a frequent and sometimes highly publicized aspect of the competitive landscape. In Web3, while still relatively new, we’re now beginning to see similar legal tensions arise, as illustrated in the Bancor vs Uniswap lawsuit.

Pointing to Vitalik Buterin presenting the idea in 2016, dismissing the lawsuit as anti-DeFi, or noting that Uniswap’s code is open source are likely moot points in the eyes of patent law. The U.S. Supreme Court has repeatedly ruled that abstract ideas, even when implemented on a computer, must be tied to a specific application or inventive concept to be eligible for a patent. You cannot patent a bare formula like x * y = k, however, you can patent a specific method of applying that formula within a technical system, a unique architecture or protocol that operationalizes it in a novel way, or a concrete implementation using hardware/software in a practical application.

Legally, the strength of Bancor’s case may hinge on how closely Uniswap’s implementation resembles what Bancor patented. If Uniswap simply replicated the CPAMM mathematical model but applied it in a technically distinct way, Bancor’s claim may be weak. However, if Uniswap’s system is substantially similar to Bancor’s patented method, even if the code differs, there could be grounds for a valid infringement case.

The outcome of Bancor’s lawsuit could significantly influence how intellectual property is enforced in decentralized finance, but it comes with substantial risks. While a victory might establish stronger protections for patented innovations, Bancor is already facing backlash from the crypto community, the critical constituency behind any protocol’s adoption and longevity. The outcome could also influence DEX competition and the willingness of developers to innovate openly. In an ecosystem built on open-source principles, legal action against a prominent competitor like Uniswap is seen by many as contrary to the spirit of decentralization. As a clear David versus Goliath scenario, Bancor’s already small footprint and dwindling community support appear to be eroding further amid growing online criticism. – Chris Rosa

Charts of the Week

Bitcoin reached a new all-time high of $112,000 this week. However, the number of daily active addresses is still trending negatively from the high of 1.19 million reached in January 2021. The current dynamic of price grinding higher against declining daily active addresses is a defining aspect of the bullish trend that started in December 2022, as in past cycles, new all-time highs in price were met by all-time highs in daily active addresses. Bitcoin exchange traded products (ETPs) are a contributing factor to this dynamic, as investors can access to BTC through them without having to custody the underlying BTC onchain or move the coins in onchain transactions to exit their holdings.

U.S. spot-based Bitcoin ETPs reached another new all-time high in cumulative inflows since launch at $44.3 billion. Thursday, May 22 saw $934 million in net inflows, the eight largest day since they launched in January 2024.

BTC Inc.'s flagship Bitcoin conference is next week in Las Vegas, with several key government officials and elected representatives set to attend. If prior history is any guide, BTC has had mixed to poor performance during and following prior Bitcoin Conferences. Will this year be any different?

Other News

• Kraken introducing tokenized stock trading on Solana in collaboration with Backed Finance for non-US users

• VanEck launches Avalanche-exclusive fund to back builders across the stack

• Vitalik Buterin proposes lightweight nodes to reduce Ethereum’s storage burden

• Solana proposes consensus upgrade with Alpenglow, rethinking proof of history

• SEC delays decision on proposed XRP and DOGE ETF filings seeking more input

• SEC charges Unicoin and executives over alleged $110 million crypto fund