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

On Monday, Bitcoin (BTC) traded at $77,502.26, maintaining its position above $76,000 after rebounding from its overnight lows, as the broader cryptocurrency market showed resilience despite the rising risks of war with Iran. Over the past 24 hours, the largest cryptocurrency saw a 2.4% increase, recovering from a dip below $74,000 earlier in the session. This move was mirrored by other major altcoins, including Ether (ETH), XRP, and Solana (SOL), with the broad-market CoinDesk 20 rising by 1.7%. This stability comes amid a volatile macroeconomic backdrop, with U.S. President Donald Trump announcing on Sunday 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, adding to the uncertainty. Oil prices surged 6% to near $90, while the S&P 500 and Nasdaq experienced modest declines, falling around 0.3%-0.4%. The performance of crypto-related equities was mixed, with Coinbase (COIN) and bitcoin treasury firm MicroStrategy (MSTR) gaining roughly 2%, while Circle (CRCL) and ether treasury firm Bitmine (BMNR) edged lower by 1%-2%. According to Jasper De Maere, a trader at Wintermute, the fact that prices have not fully retraced despite the 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 closely 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. DeFi sector reels from the aftermath of the $292 million KelpDAO hack The DeFi sector is still reeling from the biggest crypto exploit of the year, which has had far-reaching consequences. The $292 million KelpDAO hack had a cascading effect across the market, as a vulnerability allowed the attacker to drain funds that were then used as collateral across various 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 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, '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.