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

The value of Bitcoin has stabilized above $76,000 on Monday, following a rebound from its overnight lows, as the broader cryptocurrency market remains steady in the face of escalating tensions with Iran. Over the past 24 hours, Bitcoin has seen a 2.4% increase, recovering from an earlier dip below $74,000. Other major cryptocurrencies, including Ether, XRP, and Solana, have mirrored Bitcoin's movement, with the broad-market CoinDesk 20 rising by 1.7%. This resilience is notable given the uncertain macroeconomic climate. 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 negotiate a deal. A fragile ceasefire is set to expire later this week. As a result, oil prices have jumped 6% to near $90, while the S&P 500 and Nasdaq have slipped modestly, down around 0.3%-0.4%. The performance of crypto equities has been mixed, with Coinbase and Strategy gaining roughly 2%, while Circle and Bitmine have 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 notes that the current move appears less driven by leverage. However, the path forward remains tied to geopolitics, with a renewed ceasefire potentially pushing 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 noted, 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 has 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 a result, users have rushed to withdraw funds amid fears of bad debt and contagion, with the total value locked (TVL) across DeFi protocols falling by $14 billion over the past two days, according to DefiLlama data. The DeFi TVL has dropped to about $85 billion, its lowest level in a year and roughly 50% below October peaks. Aave, the largest lending protocol affected by the exploit, has seen around $10 billion in deposits withdrawn. According to David Shuttleworth from Anchorage Digital's protocol team, there is a tremendous risk-reward imbalance in DeFi, with users no longer accepting 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.