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

On Monday, the price of Bitcoin held steady above $76,000, rebounding from the previous night's lows, as the broader cryptocurrency market remained stable in the face of rising tensions with Iran. Over the past 24 hours, the largest cryptocurrency, Bitcoin, experienced a 2.4% increase, recovering from a dip below $74,000 earlier in the session. Other major cryptocurrencies, including Ether, XRP, and Solana, mirrored Bitcoin's movement, resulting in a 1.7% increase in the broad-market CoinDesk 20. This stability occurs against a backdrop of uncertainty. On Sunday, US President Donald Trump announced that American forces had seized an Iranian-flagged cargo ship, warning of further escalation if Tehran refuses to strike a deal. A fragile ceasefire is set to expire later this week. As a result, oil prices surged 6% to near $90, while the S&P 500 and Nasdaq experienced modest declines of around 0.3%-0.4%. The performance of crypto equities was mixed, with Coinbase and bitcoin treasury firm Strategy gaining roughly 2%, while Circle and ether treasury Bitmine edged lower by 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 supporting factor. Unlike earlier rallies this year, he noted that the current move appears less driven by leverage. However, the path forward remains tied to geopolitical developments. A renewed ceasefire could push Bitcoin back toward $80,000, while further escalation may keep markets under pressure. For now, capital continues to concentrate in large-cap assets like Bitcoin, De Maere observed, with riskier altcoins lagging, a pattern typical of market environments driven by macro headlines. The DeFi sector is still reeling from the $292 million KelpDAO hack, the largest crypto exploit of the year. The hack had a cascading effect across the market, as a vulnerability allowed the attacker to drain funds that were then used as collateral across lending protocols. As 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 fell by $14 billion over the past two days, even as asset prices remained steady. DeFi TVL dropped to about $85 billion, its lowest level in a year and roughly 50% below October peaks. Aave, the largest lending protocol that was central in the exploit, saw around $10 billion in deposits withdrawn. David Shuttleworth from Anchorage Digital's protocol team noted that there is a tremendous risk-reward imbalance in DeFi. Users will no longer accept the slightly higher (and sometimes lower) than risk-free rate they get by depositing in lending pools, especially given the latest wave of exploits across protocols.