Bitcoin Surpasses $76,000 as DeFi Faces $14 Billion Exodus Following KelpDAO Security Breach

The price of Bitcoin held steady above $76,000 on Monday, bouncing back from its overnight low, as the broader cryptocurrency market demonstrated resilience in the face of looming war risks with Iran. Over the past 24 hours, Bitcoin experienced a 2.4% increase, recovering from a dip below $74,000 earlier in the session. Other major cryptocurrencies such as Ether, XRP, and Solana mirrored Bitcoin's movement, with the CoinDesk 20 index rising by 1.7%. This stability occurs against a backdrop of uncertainty. On Sunday, U.S. President Donald Trump announced that American forces had seized an Iranian cargo ship, warning of further escalation if a deal is not reached. A fragile ceasefire is set to expire later this week. As a result, oil prices surged 6% to nearly $90, while the S&P 500 and Nasdaq experienced modest declines of around 0.3-0.4%. The performance of cryptocurrency-related stocks was mixed. Coinbase and Strategy, a Bitcoin treasury firm, saw gains of roughly 2%, while Circle and Bitmine, an Ether treasury firm, experienced declines of 1-2%. According to Jasper De Maere, a trader at Wintermute, the fact that prices have not fully retraced despite new tensions suggests some genuine demand, pointing to recent spot ETF inflows as a key factor. Unlike earlier rallies this year, he noted that the current move appears less driven by leverage. However, the path forward remains closely tied to geopolitical developments. A renewed ceasefire could propel Bitcoin towards $80,000, while further escalation may keep markets under pressure. For now, capital continues to flow into large-cap assets like Bitcoin, De Maere observed, with riskier altcoins lagging behind, a pattern typical of market environments driven by macro headlines. The DeFi sector is reeling from the $292 million KelpDAO hack, one of the largest cryptocurrency exploits of the year. The hack had a ripple effect across the market, as a vulnerability allowed the attacker to drain funds that were then used as collateral across lending protocols. Because those assets were widely integrated into DeFi, the impact quickly spread, with users rushing to withdraw funds amid fears of bad debt and contagion. According to DefiLlama data, the total value locked (TVL) across DeFi protocols plummeted by $14 billion over the past two days, even as asset prices remained steady. DeFi TVL dropped to approximately $85 billion, its lowest level in a year and roughly 50% below October peaks. Aave, the largest lending protocol that was central to the exploit, saw around $10 billion in deposits withdrawn. David Shuttleworth from Anchorage Digital's protocol team noted that there is a significant risk-reward imbalance in DeFi. Users will no longer accept the slightly higher, and sometimes lower, risk-free rates they get by depositing in lending pools, especially given the latest wave of exploits across protocols.