Bitcoin Surges Past $76,000 Amid DeFi's $14 Billion Exodus Following KelpDAO Breach

On Monday, Bitcoin held steady above $76,000 at $78,376.83, recovering from its overnight lows as the broader cryptocurrency market remained stable despite the looming threat of war with Iran. Over the past 24 hours, the largest cryptocurrency experienced a 2.4% increase, bouncing back from a dip below $74,000 earlier in the session. This move was mirrored by other major altcoins, including Ether, XRP, and Solana, as the CoinDesk 20 index rose by 1.7%. This stability is noteworthy given the uncertain macroeconomic climate. On Sunday, U.S. President Donald Trump announced that American forces had seized an Iranian-flagged cargo ship, warning of potential further escalation if Tehran refuses to negotiate. 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 Strategy gaining roughly 2%, while Circle and 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. De Maere noted that, unlike earlier rallies this year, the current move appears less driven by leverage. However, the path forward remains closely tied to geopolitical developments. A renewed ceasefire could propel 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 behind, a pattern typical of market environments driven by macro headlines. DeFi reels from the aftermath of the $292 million KelpDAO hack The current price action is overshadowed by the recent $292 million KelpDAO hack, which has sent shockwaves across the DeFi sector. The hack, which exploited a vulnerability, allowed the attacker to drain funds that were then used as collateral across lending protocols. As a result, 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 central to the exploit, saw around $10 billion in deposits withdrawn. David Shuttleworth from Anchorage Digital's protocol team noted, 'There’s 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.