Autor Cointelegraph by Christina Comben

Fears of AI-driven DeFi hack epidemic overstated for now — but not for long

Fears of AI-driven DeFi hack epidemic overstated for now — but not for long

Uverejnil používateľ | júl 23, 2026 |

A wave of high profile crypto hacks in April that many suspected had been orchestrated using sophisticated AI tools to identify smart contract exploits, led to fears that every DeFi protocol was suddenly at risk.In May, Manuel Aráoz, founder of the blockchain security platform OpenZeppelin, declared “all of DeFi unsafe” following $630 million in crypto losses from exploits in April.But even as the industry braced for the scenario of DeFi protocols falling like dominoes to agentic AI, the stream of attacks seemed to ebb. That led Dragonfly managing partner Haseeb Qureshi to declare recently that fears of a DeFi “hackpocalypse” were a “false alarm.” He pointed out that even including April’s big hacks, the year to date has seen “a lower rate of hacked $ per month” and that the “median hack size by year is also declining.”So who’s right? Are the fears of an AI driven hacking epidemic totally overblown, or is this just the lull before the storm?“I think the ‘hackpocalypse’ narrative is overstated if it suggests AI has already replaced compromised keys, weak infrastructure and human error as the main causes of Web3 losses,” Stephen Ajayi, Hacken’s leading offensive security engineer, tells Magazine.But he adds that doesn’t mean the fears are entirely misplaced.“I would not confuse ‘not dominant yet’ with ‘not coming.’ My view is that we are still in the early stages: the hype is ahead of the incident data, but the capability curve is catching up quickly,” Ajayi clarifies.AI is changing attacks, even if it isn’t causing themWeb3 protocols lost more than $1.3 billion across 344 security incidents in the first half of 2026, according to CertiK’s H1 report. It’s impossible to say how many of those incidents involved AI-identified or assisted exploits. Natalie Newson, senior blockchain investigator at CertiK, explains that “proving whether AI was used to find an exploit can be difficult.”Related: AI-driven hacks could kill DeFi — unless projects act nowRather than looking for direct attribution, Newson says she watches for circumstantial evidence like changes in attacker behavior. She notes there’s been a large increase in older smart contracts and unverified contracts being exploited. CertiK’s report found that 73 code vulnerability incidents in the first half of 2026 had been deployed for at least a year before being exploited. “In 2025 as a whole this number was 45,” Newson says. This suggests AI is helping attackers analyze far larger volumes of code than was previously practical.Instead of inventing entirely new attack classes, AI appears to be making existing ones cheaper, faster and easier to scale.Monthly change in crypto exploit amounts and number of incidents across H1. Source: CertiK“AI systems can help analyze codebases, identify patterns associated with known vulnerabilities, flag suspicious logic, summarize complex code, and prioritize areas for deeper review,” Newson says. “An attacker, or a defender, can examine far more contracts in a given amount of time,” she said, meaning that older codebases may now be at risk.The real danger is scaleBlockchain data platform Chainalysis also sees AI’s biggest impact as being a multiplier for activity, thereby industrializing familiar forms of crypto crime.Sully Hanif, head of UK public sector at Chainalysis, tells Magazine, “Our 2026 crypto crime report found that AI-enabled crypto scams are 4.5x more profitable than traditional scams, extracting $3.2 million per operation versus $719,000.” “AI is enabling scammers to reach and manipulate far more victims simultaneously.”The danger does not just come from smart contract exploits. Chainalysis found that impersonation scams increased more than 1,400% year over year in 2025, with criminals using AI-generated deepfakes and face-swapping software readily available on Telegram marketplaces.“We’ve seen AI supercharge existing playbooks,” he says. “The fraud-as-a-service ecosystem now offers modular, turnkey services and AI makes each module more effective.”Related: AI models led to a ‘vulnerability apocalypse’ in crypto security: Immunefi CEOChainalysis recently identified $36.7 million stolen from protocols whose smart contract source code had never been publicly verified. Hanif warns that attackers are using large language models to reverse engineer raw bytecode and identify vulnerabilities at scale.The data: $36.7 million from unverified contracts. Source: Chainalysis“AI is likely to have its greatest impact where human effort has traditionally been the bottleneck,” Newson says. “We’re observing AI being used to impersonate support staff, video calls, influencers […] The biggest risk is that attackers no longer need technical expertise or strong language skills.”So where are the billion-dollar hacks coming from?Looking at the data, the biggest crypto losses of 2026 could have been carried out without the use of AI.CertiK’s report found wallet compromise remained the most damaging attack vector during the first half of the year, accounting for more than $444 million in losses across just 33 incidents.Hacken’s Q2 2026 Web3 security report found that roughly 88% of all value stolen during the second quarter was due to compromised keys, signers and operational infrastructure rather than smart contract bugs, largely driven by the two North Korean-linked attacks against Drift Protocol and KelpDAO.Of the $763,971,791 stolen, 88.3% was traced to compromised keys, signers, and infrastructure. Source: HackenAjayi s that rather than replacing traditional attack methods, AI is amplifying them by identifying vulnerable employees, generating convincing phishing campaigns, analyzing public code and accelerating exploit development. However, compromised governance, poor operational security and weak infrastructure still determine whether attacks succeed.“AI is a new amplifier, but the old security failures still determine how large the blast becomes,” he said.AI changes the battlefield, but not the fundamentalsOf course, AI can also be used as a force for good, and the security industry is deploying it defensively as well. Hanif said investigators are moving from reactive to preventative, and “the tools exist now to stop scams before victims lose money.” “Ultimately, AI is likely to enhance the capabilities of both attackers and defenders,” Newson said, “with the balance of advantage depending on which side is able to integrate and operationalize the technology most effectively.” Magazine: Strategy became a symbol of the dot-com crash: Could history repeat?Cointelegraph publishes long-form journalism, analysis and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Content published in here does not constitute financial, legal or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence.

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The digital euro: Surveillance money, or a better alternative to cash?

The digital euro: Surveillance money, or a better alternative to cash?

Uverejnil používateľ | júl 22, 2026 |

The digital euro is one of Europe’s most contentious financial projects.Supporters see it as a way to preserve the bloc’s monetary sovereignty, reduce its reliance on foreign payment providers, and ensure central bank money survives in an online economy dominated by USD stablecoins.Critics, however, argue the digital euro could be a way for a supranational organization to surveil — and in certain circumstances, even control — the population of Europe.The official view is that: “The digital euro will reduce Europe’s excessive dependence on non-European providers. It will ensure that Europeans can pay with their money — the sovereign money issued by their central bank — in the digital economy,” said Piero Cipollone, member of the executive board of the European Central Bank (ECB).The alternative perspective is that the Central Bank Digital Currency (CBDC) may curtail the freedom of citizens to spend money how they wish.“These are the 8 most dangerous words if you care about freedom: “The digital euro is here to protect Europeans,” said former Deutsche Bank managing director Pius Sprenger.“This is how they will be able to control EVERY euro you spend. Goodbye money. The ECB will decide how much digital money you can have,” said José Vizner, a Spanish financial commentator.So who’s right? The suited Brussels bureaucrats who seem to get a kick out of reading your private messages or the tinfoil hat adjacent cypherpunks who want to separate money and state?What is the digital euro?The digital euro is a proposed digital form of the euro that would be issued by the ECB, making it a digital form of central bank money, or CBDC.The term “CBDC” tends to raise the hairs on the back of the necks of privacy-loving crypto folk, invoking 1984-style vibes of government overreach and surveillance.President Donald Trump signed an executive order to ban CBDCs from the US in January, citing threats to the financial system, individual privacy and the country’s sovereignty. A ban until 2030 was formalized more recently in housing bill legislation. Despite this, the ECB says they’ll do just fine for Europe.Related: US CBDC ban to go into effect without Trump signoff on housing billIt argues the digital euro would give people living in the euro zone another way to make everyday transactions with central bank money as payments move increasingly online; and that it will complement, rather than replace, physical banknotes and coins.Not everyone is sold on the benefits of the digital euro. Source: Pius the Banker“The main reason for issuing a digital euro is to preserve the benefits of cash in the digital era,” Cipellone said in an interview on July 14.That’s nice, except that one of the major benefits of banknotes that is they can be tracked, traced and frozen at will, as Vizner pointed out. “They promise privacy… but it’s money that’s trackable by design.” Why does Europe want one?The ECB obviously isn’t talking up the benefits of spying on everyday payments. Instead, officials argue that as cash use declines, Europe risks becoming more reliant on private or overseas-operated payment systems like Visa or Mastercard.Some policymakers have expressed concern that the continent lacks control over its critical payment infrastructure, with ECB President Christine Lagarde saying in 2025:“The entire infrastructure mechanism that allows for payment, credit and debit, is not a European solution… We need to make sure there is a European offer, just in case.”Consumer groups such as the European Consumer Organization (BEUC) have also highlighted potential benefits for users.Deputy head of communications, Andrew Canning, told Cointelegraph that the digital euro could provide consumers with a “secure and inclusive” payment option that complements existing solutions, particularly for people who face barriers accessing digital payments.Related: South Korea eyes September launch for second phase of CBDC pilot: ReportYet critics argue that the digital euro would give governments and central banks control over how citizens can spend money. These fears are not theoretical, even in Western democracies. During Canada’s 2022 Freedom Convoy protests, authorities ordered banks, crowdfunding platforms and other financial institutions to freeze accounts linked to the blockades.Why do we need a digital euro? Source: ECBEfrat Fenigson, a tech entrepreneur and privacy advocate, said that the digital euro could become “the infrastructure for programmable money, programmable identity and programmable behavior,” warning that “freedom doesn’t disappear overnight. It disappears one permission at a time.”Patrick Schueffel, a professor of banking and finance at the Fribourg School of Management, also warned that CBDCs could significantly expand governments’ ability to monitor financial activity.Are there safeguards?The EU’s own privacy watchdogs have said the project needs strong safeguards, with both the Data Protection Supervisor (EDPS) and the European Data Protection Board (EDPB) saying a high level of privacy and data protection is essential for the digital euro to gain public trust.The ECB’s digital euro privacy materials assure skeptics that offline payments will exist to enable ‘cash-like’ privacy and insist that the bank will not see personal transaction data.Canning told Cointelegraph that the BEUC is “currently happy” with the proposal and that “we trust that consumer safeguards are protected in the final negotiations between EU lawmakers.”However, the ECB’s arguments may not be enough to persuade the doubters.How does the digital euro work?Unlike privately issued stablecoins like Tether or USDC, which are denominated in US dollars, the digital euro would be denominated in euros and issued by the central bank. Consumers would still access it through their regular bank or payment provider.Unlike physical cash, which people hold directly in their wallets, the digital euro would be accessed through electronic wallets and used to make payments in stores, online, or from wallet to wallet.The underlying money would remain a liability of the ECB rather than a commercial bank, which supporters say would give it the same public backing as cash rather than being a claim on a commercial bank’s deposits.Related: Bank of England governor denies Farage lobbying swayed CBDC policy: ReportUnusual bedfellows: Crypto and the banksCrypto and privacy advocates have an unusual ally in the fight against the digital euro, as parts of the banking industry isn’t too keen on it either.They worry a shift to central bank digital euros would reduce bank deposits, forcing them to rethink loans to businesses and consumers.Lorenzo Bini Smaghi, an Italian economist and banker who served on the executive board of the ECB from 2005 to 2011, said, “There is a high risk of financial instability, with strong repercussions for the real economy.”The ECB argues that the design choices have been taken to “minimize any potential risks” to the banking sector. Users would be limited to holding a small amount of digital euros in their wallets at any time to “prevent excessive outflows of bank deposits,” and “as with cash in your wallet, no interest would be paid on digital euro holdings.”Estimated bank deposit outflows by holding limits. Source: ECBHow much will it cost?The cost of implementing a digital euro has become a bone of contention among critics, as the ECB estimates that it will run to around 1.3 billion euros (approximately $1.5 billion) in investment, with ongoing operating costs of around €320 million ($370 million) annually.Commercial banks and other payment providers face steep costs integrating the digital euro into their services. The ECB expects implementation costs for the banking sector of between $4.6 billion and $6.9 billion.When is it coming?After years of discussions, lawmakers across the European Parliament, EU member states and the European Commission have begun negotiations on the final legislation for the digital euro, and aim to reach an agreement within the next six months.Cipollone said in an interview on July 13:“We hope the text will be finalized by the end of the year, at which point we’ll be in a position to take a decision on the future issuance of the digital euro.”The road to a digital euro. Source: CointelegraphIf that legislation goes through, the next move will be up to the ECB’s Governing Council, which will decide whether to launch the digital euro sometime in 2027. Europeans are unlikely to encounter it in their everyday lives before 2029, if it is approved at all.Has this been tried before?More than 100 countries started exploring CBDCs a few years ago, with most abandoning the idea or shifting to a wholesale model, rather than a retail currency. The few CBDCs in production have not been widely adopted.China began piloting its digital yuan, or e-CNY, in 2019, later rolling it out across the country. Even though it has processed trillions of yuan in transactions, most Chinese consumers still prefer using familiar payment apps such as Alipay and WeChat Pay.The Bahamas Sand Dollar project. Source: IMFThe Bahamas became the first country to roll out a nationwide retail CBDC when it launched the Sand Dollar in 2020. While the project was intended to improve financial inclusion, adoption was slower than many hoped, prompting authorities to push for wider distribution through commercial banks.Elsewhere, Nigeria’s eNaira also struggled to gain traction after its 2021 launch despite strong government support, and Brazil’s central bank shut down its Drex CBDC platform in 2025, citing cost and privacy concerns.As the Bank for International Settlements concluded in 2023, “a retail CBDC is a complex undertaking, and not only for the central banks.”Magazine: The British Virgin Islands are a top crypto hub no one ever talks about. Here’s whyCointelegraph publishes long-form journalism, analysis and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Content published in here does not constitute financial, legal or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence.

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The British Virgin Islands are a top crypto hub no one ever talks about: Here’s why

The British Virgin Islands are a top crypto hub no one ever talks about: Here’s why

Uverejnil používateľ | júl 17, 2026 |

More than $1 out of every $10 of the world’s tokenized US Treasuries is issued by a company incorporated in the British Virgin Islands. That places the small Caribbean territory behind only the United States as a key jurisdiction for the rapidly growing asset class, according to BVI Finance.BVI Finance’s Destination Digital report in June found that BVI entities accounted for approximately $1.5 billion of the $14.98 billion global market for tokenized US Treasuries as of June 1.A growing list of digital asset firms now call the British Virgin Islands home, including Kraken’s parent company, Payward, Bitstamp (recently acquired by Robinhood), 1inch and Bitfinex. The territory boasts a stablecoin market cap of about $1.2 billion held in BVI-linked addresses and has roughly 28,000 stablecoin asset holders. More than 25 virtual asset service providers (VASPs) have been approved under the BVI’s VASP regime, and, according to Bernstein Research, the Islands host 305 tokenized securities — the highest count for any single jurisdiction in the RWA.xyz dataset.US tokenized securities distributed value by jurisdiction. Source: Destination DigitalThe statistics suggest the Virgin Islands has become one of the world’s top crypto hotspots, but the reality is a little more nuanced. Tokenized assets are designed to be borderless, and crypto projects often have the choice of which offshore jurisdiction to incorporate in.In most cases, digital asset companies aren’t physically relocating to the Virgin Islands; they’re simply using the territory to incorporate legal entities, such as token issuers, treasury vehicles, holding companies or special purpose vehicles (SPVs).Crypto companies aren’t just choosing BVI for tax reasonsAndrew Jowett, a partner at Appleby (BVI) Ltd who advises digital asset businesses on corporate structuring, told Cointelegraph that clients researching the BVI typically compare several jurisdictions, such as the Cayman Islands, United Arab Emirates, Singapore and Switzerland. Despite long-held assumptions about offshore Caribbean tax havens, tax neutrality is no longer the primary driver.Related: Dubai crypto market hits 50 licensed firms after new VARA approval “The overriding factor for choosing the BVI has been digital asset regulation and not tax,” Jowett said. The British overseas territory does have attractive tax policies, and imposes no corporate income tax or capital gains tax on BVI companies.But all the leading crypto hubs now have favorable crypto tax policies, meaning it’s no longer the deciding factor. The Cayman Islands imposes no corporate income tax or capital gains tax, and the UAE has zero personal income tax or federal corporate tax on qualifying free zone entities. “Tax neutrality is table stakes,” said Saeed Al-Marri, chief executive of digital asset infrastructure firm Ethra, which is incorporated in the BVI. He added that the BVI provides legal certainty and clarity, factors he said will determine which jurisdictions survive institutional adoption.LTP is an institutional digital asset infrastructure provider that operates regulated entities in the BVI, Hong Kong, Australia and the UAE. Its founder and chief executive, Jack Yang, told Cointelegraph that while favorable taxation is relevant for cross-border structures, it is secondary to legal and regulatory certainty as tokenization moves further into institutional finance.“A tax-neutral structure that cannot pass review by banks, custodians, auditors, investment committees, or regulators has limited practical value,” he said. Number of tokenized securities by jurisdiction. Source: Destination DigitalOrest Gavryliak, chief legal officer at decentralized exchange aggregator 1inch, which is incorporated in the BVI, said that more and more decentralized finance (DeFi) protocols are choosing jurisdictions that provide predictable rules, rather than simply the lowest tax burden.“Jurisdiction isn’t exactly becoming irrelevant, but its role is changing,” Gavryliak told Cointelegraph. “Protocols are increasingly weighing factors such as regulations, institutional credibility and long-term sustainability.”Crypto hubs now compete on legal infrastructure Jurisdictions vying to be “crypto hubs” like Singapore and the UAE increasingly compete via favorable legal infrastructure and licensing regimes, such as Singapore’s Payment Services Act and Dubai’s Virtual Assets Regulatory Authority (VARA) rulebooks.The BVI introduced the Virtual Assets Service Providers Act (VASP Act) in 2023, overseen by the BVI Financial Services Commission (FSC). Compared with many larger financial centers, it offers a speedy turnaround, responds to VASP applications within six weeks and aims to complete the review process within six months, according to BVI Finance and FSC guidance. Jowett said beyond favorable tax regimes, clients prioritize “ease of launch” and efficient corporate structuring, which has long been part of the BVI’s appeal. Companies can be set up quickly, the legal framework is flexible, and ongoing reporting is generally lighter than in onshore jurisdictions.Related: Cayman Islands Web3 foundations jump 70% as CARF reporting rules arriveThe Virgin Islands has also historically been favored because it offers more corporate confidentiality than many larger financial centers.While BVI companies are still subject to anti-money laundering (AML) and know-your-customer (KYC) requirements, beneficial ownership information is held by registered agents rather than a public register, which reduces disclosure requirements.British Virgin Islands. Source: Destination DigitalHowever, none of the companies interviewed by Cointelegraph cited tax neutrality or greater corporate confidentiality as deciding factors for incorporating in the BVI, pointing instead to legal certainty, regulatory clarity and corporate flexibility.Incorporating, not physically relocating to the Virgin IslandsYang told Cointelegraph that LTP does not employ full-time staff “on the ground.” Instead, the entity is overseen by its board and supported by staff from elsewhere in the LTP group. The same distinction can be seen elsewhere in the industry. Kraken’s parent company, Payward, is incorporated in the BVI, but the exchange’s operations are primarily based in the United States, while 1inch’s team and operations are spread across multiple jurisdictions. The BVI isn’t winning the race to attract glitzy headquarters or large-scale engineering teams. Instead, it has become the legal home for many digital asset businesses, while much of the work happens elsewhere. For jurisdictions competing to attract the industry, that just may be enough.Magazine: Singapore isn’t a ‘crypto hub’ — it’s something better: StraitsX CEO

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Is Robinhood Chain’s success bullish or bearish for ETH the asset?

Is Robinhood Chain’s success bullish or bearish for ETH the asset?

Uverejnil používateľ | júl 15, 2026 |

Robinhood Chain’s explosive launch this month has reignited one of Ethereum’s longest-running debates: Do successful layer-2 networks increase demand for ETH, the asset, or do the new entrants capture all of the value for themselves?The retail brokerage’s Arbitrum-based Ethereum L2 has become one of Ethereum’s busiest rollups since its launch on July 1. More than $141 million in Ether was bridged onto the chain in its first two weeks. DeFiLlama data shows more than half a million wallets now hold ETH on the network, and a memecoin frenzy saw Robinhood Chain surge past the Ethereum L1 and Coinbase’s Base L2 in 24-hour DEX trading volume.Ether has pumped on the news, gaining around 15% from $1,582 on July 1 to $1,825 by July 13, according to Coingecko data, following a wave of bullish comments. World Liberty Financial’s Eric Trump posted on July 11, “ETH is pumping hard! Great to see!” while Tom Lee, chairman of BitMine Immersion Technologies, argued the launch reinforces the thesis that “ETH is money,” pointing to the asset’s role as the chain’s native gas token and the L2’s finality on Ethereum’s mainnet. Ethereum investors have heard similar arguments before.Related: Robinhood L2 sparks ETH optimism, Saylor ‘muddies waters.’ Hodler’s Digest, July 5-12, 2026Arbitrum, Optimism and Base each drove waves of users and activity onto Ethereum’s L2 ecosystem, but failed to move the needle meaningfully in Ether’s price, as most of the economic activity remained on the rollups themselves. Robinhood Chain’s launch is arguably different. Unlike previous rollups built by crypto-native firms, the network was developed by a publicly listed retail brokerage with tens of millions of customers to support tokenized stocks and other real-world assets. Within days of launch, it already accounted for 6.9% of all tokenized stockholders, according to data from Token Terminal. Ether price response to Robinhood Chain’s launch. Source CoingeckoAnd, if Robinhood’s model succeeds, it could encourage banks, brokers and asset managers to build L2s of their own, and cement Ethereum as the default blockchain for TradFi. Deutsche Bank is already in the process of building a ZK-powered Ethereum L2 called DAMA 2, focused on institutional finance. Why Robinhood could be a turning pointEthereum’s L2 networks use rollup technology to process transactions away from Ethereum’s main chain and periodically settle them back to the network. Robinhood Chain uses Arbitrum technology and is compatible with Ethereum’s wider ecosystem.But what has caught the industry’s attention isn’t the technology itself, as much as who is using it.“It’s a real milestone,” Alex Gluchowski, founder and chief executive of Matter Labs, the developer behind Ethereum L2 zkSync, told Cointelegraph. “It shows Ethereum L2s have gone from something crypto-native teams experiment with to infrastructure a regulated, publicly listed company will run its business on.”Rather than building a blockchain from scratch, as Stripe has opted to do with Tempo, Robinhood chose to tailor an Ethereum rollup to its own needs “for privacy, compliance and performance, while still inheriting Ethereum’s security and connecting to its liquidity,” he added.Max Shannon, senior research analyst at Bitwise, told Cointelegraph that Robinhood Chain’s success is more significant than previous L2 deployments.“It represents the growth of the Ethereum ecosystem, particularly among major institutions,” he said. “It also arrives at a time when Ethereum has more broadly repositioned itself toward institutions through Eth Labs and Ethereum Institutional.”Does Robinhood Chain change the investment case for ETH?For Shannon, Robinhood’s launch strengthens the investment case for Ethereum because it reinforces the network’s position as the leading blockchain for institutional adoption.He said ETH has the “network characteristics” to become the reserve asset for a growing network of institutional L2s. But like many, he believes Ethereum’s tokenomics need to be improved so that increased network activity is reflected more clearly in demand for ETH.Ethereum has been criticized frequently for its decision to lower fees for L2s as a way to spark adoption and gain network effects. Ark Invest’s Lorenzo Valente posted on July 14 that Robinhood Chain had generated $816,000 in revenue since launch, with Arbitrum taking a 10% cut, but only 0.15% of the total being paid back to Ethereum. “If your thesis is ‘ETH is money,’ Robinhood building here is ultra bullish. More activity, more ETH collateral, more lindyness. If your thesis is ‘ETH is a revenue generating asset,’ this is the ultra-bear case.”GrowThePie said that Valente’s figures for Eth’s share of the revenue were off by a factor of four and argued “0.6% of revenue is the correct figure.” But even the higher figure is not a meaningful driver of revenue to the L1. Robinhood Chain generated more gas fees than any other L2 in the past week, but Ethereum only saw $4,400 of that. MatzeSource: Matze, GrowThePieGluchowski said ETH’s appreciation would not be based on fee revenue, but would likely come from becoming widely accepted money throughout the L2 ecosystems. “People might pay fees in stablecoins or never think about gas at all,” he said. “But as more value settles through Ethereum, ETH starts to look less like a fee token and more like a base monetary asset for this system.”Related: Robinhood says its AI agent feature will ‘soon’ be assisting crypto tradersEven ETH bears like Mike Dudas from 6th Man Ventures, have described Robinhood Chain as “the single most bullish thing I’ve seen in eth-land in years.” But after Dudas saw Valente’s post, he added the proviso that “Eth cooked unless ‘eth is money’ takes off or the price of l1 settlement increases.”The value accrual question remains While Robinhood’s success may have bolstered the case for Ethereum’s scaling strategy, it has yet to settle one of the network’s biggest unanswered questions: how does growing L2 activity ultimately translate into value for ETH?Shannon said that recent upgrades like Fusaka have improved Ethereum’s scaling capabilities, but despite transaction activity reaching record levels, demand has yet to translate into meaningfully higher fees or increased ETH burn.“Robinhood will not solve this problem,” Shannon said, and the collective growth of L2s will likely not either… It requires a wholesale change in developer mindset and in ETH’s token economics.”Another uncertainty is how much ETH institutional users will actually hold directly. As tokenized stocks and other RWAs increasingly trade against stablecoins, many users may rarely interact with ETH, even though it underpins the network behind the scenes. Robinhood may have shown that a major financial institution is willing to build on Ethereum’s infrastructure, but whether that ultimately translates into stronger demand for ETH remains to be seen.Magazine Ethereum’s much-hated staking ‘tax’ may already be obsolete

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Strategy became a symbol of the dot-com crash: Could history repeat?

Strategy became a symbol of the dot-com crash: Could history repeat?

Uverejnil používateľ | júl 14, 2026 |

In March 2000, Strategy executive chairman Michael Saylor watched more than $6 billion disappear from his fortune in a single day.MicroStrategy’s shares had plummeted more than 60%, thrusting the thirty-five year old software entrepreneur into the center of the dot-com crash. The company later settled civil fraud charges with the US Securities and Exchange Commission over its accounting practices without admitting or denying wrongdoing. MicroStrategy did not cause the dot-com bubble to burst, but the saga was one of the era’s high-profile corporate blowups and the company became a symbol of the periods excesses and risks. Now, more than 25 years later, the Bitcoin true-believer once again finds himself in the eye of one of Wall Street’s most closely watched financial experiments. The company, now known simply as Strategy, holds 843,775 Bitcoin, more than any other public company. It has inspired dozens of listed firms to adopt Bitcoin treasury strategies of their own.But Strategy is no longer simply accumulating Bitcoin, it has developed a series of financial engineering strategies that divide investors and analysts. Some see it as a sophisticated corporate treasury model that can’t lose, while others believe the risks are piling up on top of one another.“The conversation shifts beyond simply acquiring Bitcoin to how those positions are financed, managed and, when necessary, traded or monetized,” Drew Forman, senior vice president and head of strategy at Talos, told Cointelegraph.From accumulation to managementOn June 29, Strategy unveiled a new capital framework allowing it to sell Bitcoin to fund preferred stock dividends, build its cash reserves and repurchase securities.The case against MicroStrategy in 2000. Source: SECFor a company that spent more than half a decade insisting its Bitcoin was to be accumulated rather than sold, the move caused alarm bells to ring.Related: Lyn Alden says Bitcoin needs no savior as Strategy sells $216M of BTCDays later, Strategy disclosed the sale of 3,588 Bitcoin, its largest disposal since adopting BTC as its primary treasury reserve asset in 2020.To Strategy evangelists, these changes reflect the natural evolution of a company managing a multi-billion-dollar Bitcoin treasury, rather than a sharp about-turn.Yet critics argue that Strategy’s growing reliance on preferred stock, dividend obligations and external financing has made the model more complex and interdependent, rather than more resilient. MicroStrategy’s road to BitcoinMicroStrategy was one of the fastest-growing software companies of the internet boom in the 1990s, selling business intelligence software to blue-chip clients including McDonald’s, Nike and eBay, and making Saylor one of America’s richest entrepreneurs. But on March 20, 2000, that momentum came to a sudden halt when MicroStrategy announced that it needed to restate its financial results for the fiscal years 1998 and 1999 due to accounting errors.The company’s stock nosedived, dropping from $260 per share to just $86 in a single session. It continued to plummet over the following weeks. On April 13, when MicroStrategy announced that it would also need to restate its 1997 financial results, the stock closed at $33 per share.That episode may have defined many executives’ careers, but Saylor spent the next two decades rebuilding the company largely outside the spotlight until the summer of 2020, when MicroStrategy announced that it would make Bitcoin its primary treasury reserve asset, and Saylor became its most vocal evangelist.MicroStrategy settled charges with the US Securities and Exchange Commission. Source: SECHe likened holding cash reserves during a time of unprecedented pandemic-era stimulus to holding “a melting ice cube.” The company bought its first $250 million Bitcoin on August 11.Few public companies held Bitcoin on their balance sheets at the time, and the move was widely viewed as a high-risk experiment rather than a blueprint for corporate finance. But Bitcoin’s price soon began to soar, bolstered by the excess liquidity, and Strategy’s valuation ballooned. Suddenly, Saylor’s controversial decision looked more like a stroke of genius and the company quickly became a leveraged proxy for Bitcoin on Wall Street. Related: Strategy’s MSTR may plunge 80% if it repeats this dot-com-era fractalDozens of listed firms adopted variations of its treasury strategy, and today, Strategy’s Bitcoin stack is worth more than $54 billion. But with BTC languishing far from its all-time high above $126,000 in October 2025, the company’s Bitcoin play has been repeatedly called into question. Bitcoin price is far from its all-time high. Source: CoingeckoSkeptics argue Strategy’s model only works if Bitcoin keeps appreciating and investors continue providing new capital. Some have even warned that, under prolonged market stress, those dynamics could contribute to a so-called death spiral in Strategy’s financial model.Different mechanism, same problemWhether Strategy represents a radical reinvention or history repeating itself depends largely on how investors interpret the risks.To some critics, the similarities with 2000 are less about accounting than Saylor’s willingness to build his company around a high-risk corporate model that few other chief executives would even contemplate.“Saylor is insane (not an insult, just a diagnosis) and is either a fool or a knave,” Aswath Damodaran, professor of finance at NYU Stern School of Business, told Cointelegraph in an email. “It hurts my brain cells just thinking about MSTR and I don’t have enough to waste on it.” David Trainer, chief executive of investment research firm New Constructs, also holds a hawkish view. He argued that while today’s Strategy looks very different from the company that collapsed during the dot-com era, investors are still being asked to place extraordinary faith in Saylor’s latest corporate experiment. “Different mechanism, same underlying problem: the equity is a leveraged wrapper around a volatile asset, with no fundamental earnings power supporting the valuation,” he said.He said that the dot-com blow-up was due to incorrect financial reporting. The SEC claimed in 2000 the company’s financial reports had “showed positive net income” when it should have “should have reported net losses from 1997 through the present.” While Saylor and two executives agreed to pay a $10 million fine to settle the case, they did not admit liability to any of the SEC’s allegations. “That was a […] mismanagement risk layered on a real (if over-hyped) software business,” he said. Today, the company’s books are “cleaner,” he argued, with the risks embedded in a capital structure built around financing ever-larger Bitcoin purchases rather than software.Strategy now runs a “large and growing balance of convertible debt and perpetual preferred stock,” he said, pointing to the $6.7 billion in convertible notes and $15.5 billion in preferred stock outstanding as of late May 2026, used specifically to buy more Bitcoin.“The software business is now a rounding error next to the balance sheet,” he said.Related: Grayscale’s Pandl says Strategy should sell $3B Bitcoin to restore confidenceAccording to Trainer, the bigger concern is not Bitcoin itself, but the premium investors are willing to pay for exposure through Strategy. If that premium disappears, one of the company’s key advantages disappears with it.“Once you’re structurally reliant on issuance and issuance becomes value-destructive, the company has to either sell Bitcoin, take on more expensive financing or simply stop growing,” Trainer said.Treasury management, not just HODLingForman said that investors should focus on how the company manages its increasingly sophisticated corporate treasury strategy.“Strategy’s position can’t be understood simply by looking at the size of its Bitcoin holdings,” Forman told Cointelegraph.He said Strategy’s willingness to sell Bitcoin is less a departure from Saylor’s long-held accumulation strategy than a practical reality of managing a corporate balance sheet. “I see it as a pragmatic evolution of a more complex treasury strategy,” he said.“The broader takeaway is that Bitcoin is increasingly being treated as an institutional asset class,” he added, stressing that rather than simply deciding whether to buy Bitcoin, companies will increasingly need to think about governance, liquidity management, execution and risk management.So, has Saylor rewritten his legacy?26 years after MicroStrategy’s accounting scandal, the questions surrounding Strategy have changed. Few critics question the integrity of the company’s financial reporting, but whether its increasingly complex Bitcoin strategy can endure prolonged market stress.Saylor has fundamentally changed the way many public companies think about corporate treasuries, and many have followed his lead. But whether Saylor has rewritten his legacy won’t be decided by the next bull run, but on how well Strategy performs if the markets continue to turn against it.Cointelegraph reached out to Strategy but did not receive a response. A spokesperson from the SEC declined to comment on the settlement case.Magazine: Bitcoin will not hit $1M by 2030, says veteran trader Peter Brandt

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