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

The price of Bitcoin has managed to hold above $76,000 on Monday, recovering from its overnight lows as the broader cryptocurrency market remains stable despite the rising risks of war with Iran. Over the past 24 hours, the largest cryptocurrency has seen a 2.4% increase, recovering from a dip below $74,000 earlier in the session. Other major cryptocurrencies such as Ether, XRP, and Solana have also followed Bitcoin's lead, with the CoinDesk 20 index rising by 1.7%. This stability comes despite a volatile macroeconomic backdrop. 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 by around 0.3-0.4%. The performance of cryptocurrency-related stocks has been mixed. Coinbase and Strategy have gained 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 the new tensions suggests that there is some genuine demand for cryptocurrencies. He points to recent spot ETF inflows as a supporting factor and notes that the current price movement 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's price back towards $80,000, while further escalation may keep the markets under pressure. For now, capital continues to flow into large-cap assets like Bitcoin, De Maere noted, with riskier altcoins lagging behind, a pattern typical of market environments driven by macro headlines. DeFi Sector Reels from $292 Million KelpDAO Hack The DeFi sector is still reeling from the largest crypto exploit of the year, which has had a significant impact on the market. The $292 million KelpDAO hack has cascaded 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 their funds amid fears of bad debt and contagion, leading to a significant decline in the total value locked (TVL) across DeFi protocols. According to DefiLlama data, the TVL has fallen by $14 billion over the past two days, even as asset prices have remained steady. The DeFi TVL has dropped to around $85 billion, its lowest level in a year and roughly 50% below the October peaks. Aave, the largest lending protocol at the center of the exploit, has seen around $10 billion in deposits withdrawn. David Shuttleworth from Anchorage Digital's protocol team notes that there is a tremendous risk-reward imbalance in DeFi, and users will no longer accept the slightly higher rates they get by depositing in lending pools, especially given the latest wave of exploits across protocols.