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

The price of Bitcoin, currently at $78,053.52, managed to hold above $76,000 on Monday, following an overnight rebound, as the broader cryptocurrency market demonstrated resilience in the face of rising tensions between the US and Iran. Over the past 24 hours, Bitcoin has seen a 2.4% increase, recovering from a dip below $74,000 earlier in the session. Other major cryptocurrencies, including Ether, XRP, and Solana, mirrored Bitcoin's movement, contributing to a 1.7% rise in the broad-market CoinDesk 20 index. This stability comes amidst a delicate macroeconomic backdrop, with US President Donald Trump announcing that American forces had intercepted and seized an Iranian cargo ship, warning of potential further escalation. As a result, oil prices jumped 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 supportive factor. 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 potentially 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 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 cascaded 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. Total value locked (TVL) across DeFi protocols fell by $14 billion over the past two days, according to DefiLlama data, 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 that there’s a tremendous risk-reward imbalance in DeFi, and 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.