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

On Monday, the price of Bitcoin held steady above $76,000 at $77,631.62, rebounding from its overnight lows as the broader cryptocurrency market demonstrated resilience despite the risks of war with Iran. Over the past 24 hours, the largest cryptocurrency experienced a 2.4% increase, recovering from a dip below $74,000 earlier in the session. Other major altcoins, including Ether, XRP, and Solana, mirrored Bitcoin's movement, with the CoinDesk 20 index rising 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 Tehran refuses to negotiate. A fragile ceasefire is set to expire later this week, adding to the tension. 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, 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 there is genuine demand. He pointed to recent spot ETF inflows as a supporting factor and noted that the current move appears less driven by leverage compared to earlier rallies this year. However, the path forward remains closely tied to geopolitical developments. A renewed ceasefire could push Bitcoin toward $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. DeFi Sector Reels from $292 Million KelpDAO Hack In other news, the DeFi sector is still reeling from the largest crypto exploit of the year. The $292 million KelpDAO 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 fell 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.