The Daily: Trump removes bitcoin's 'last existential risk,' Hyperliquid delists JELLYJELLY after another whale manipulation event and more

The following article is adapted from The Block’s newsletter,  The Daily , which comes out on weekday afternoons.

Happy Wednesday! With a relatively calm crypto market currently in "wait-and-see" mode, analysts at K33 predict more tariff-driven volatility as we approach President Trump's "Liberation Day" next week.

In today's newsletter, Bitwise says Trump's Strategic Bitcoin Reserve removes its "last existential risk," Hyperliquid delists the JELLYJELLY memecoin following another whale manipulation fiasco, Celo developers finalize its Ethereum Layer 2 transition and more.

Meanwhile, Sarah Wynn takes a look at the clearer path to an XRP ETF after the SEC dropped its Ripple appeal in The Block's latest feature story.

Let's get started.

Trump removes bitcoin's 'last existential risk'

Bitwise CIO Matt Hougan said President Trump's U.S. Strategic Bitcoin Reserve removes the "last existential risk" to the asset.

• Hougan argues that, as a result, now is the "best time in history to purchase bitcoin" on a risk-adjusted basis.
• Harkening back to his first encounter with bitcoin in 2011, when it crossed the $1 mark, had he invested $1,000 then, it would be worth $87 million today, but at the time, bitcoin was a risky investment due to custody, regulatory and technological challenges, Hougan said.
• Bitcoin eventually overcame many of these existential threats with the launch of exchanges like Coinbase, the introduction of custody services from blue-chip companies such as Fidelity and the approval of spot Bitcoin ETFs last year, which provided regulatory clarity for U.S. institutional investors, the Bitwise CIO noted.
• However, the final boss — fear of government bans — still lingered, Hougan reflected.
• The question that he had continued to ponder was that as the U.S. government famously confiscated private gold holdings in 1933 to boost public coffers, why would it allow bitcoin to grow large enough to threaten the dollar?
• Then, on March 6, President Trump signed an executive order to create a U.S. Strategic Bitcoin Reserve, seeded from existing seizures, while directing Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to develop budget-neutral strategies for acquiring additional bitcoin.
• "And just like that, the last existential risk facing bitcoin disappeared before my eyes," the Bitwise CIO said.
• While many questioned why the U.S. would do this, Hougan's answer is that bitcoin is better than the alternative. "The best-case scenario for the U.S. is that the dollar remains the world's reserve currency. But if we get to the point where that's at risk, we're better off moving to bitcoin than something like the Chinese yuan," he said.
• "This is what I couldn't see originally: Of course, the U.S. would embrace bitcoin. It's the best backup plan on the market."

Hyperliquid delists JELLYJELLY after latest whale manipulation fiasco

Hyperliquid delisted the JELLYJELLY perpetual contract after suffering its second whale manipulation event in just two weeks, causing the community-owned HLP vault to take on substantial unrealized losses.

• The wallet "0xde96" shorted JELLYJELLY while a whale dumped the token on DEXs, crashing its price and forcing Hyperliquid's HLP vault to take over the short. A new wallet, "0x20e8," then longed the token, increasing HLP's unrealized losses to around $12 million.
• At least two major centralized exchanges, Binance and OKX, listed JELLYJELLY futures trading amid the debacle, which posed a potential liquidation risk to the entire HLP vault.
• However, at the same time, Hyperliquid halted JELLYJELLY trading and froze the contract. "After evidence of suspicious market activity, the validator set convened and voted to delist JELLY perps," the platform announced.
• "All users apart from flagged addresses will be made whole from the Hyper Foundation. This will be done automatically in the coming days based on onchain data," the team said, adding that "HLP's 24-hour pnl as of writing is approximately 700k USDC."
• Hyperliquid's native token dropped as much as 22% during the incident, according to The Block's HYPE price page.

Celo becomes an Ethereum Layer 2

Celo has completed its transition from a standalone Layer 1 blockchain to become an Ethereum Layer 2 network .

• The shift, first proposed by developer CLabs in July 2023, aims to leverage Ethereum's security while maintaining Celo's low-cost transactions and fast settlement times.
• Celo now operates as an optimistic rollup using the OP Stack, a customizable toolkit from Optimism, helping to address scalability and interoperability challenges that it faced as an independent chain.
• Following the migration, Celo has gained native Ethereum bridging, and its block times have reduced from 5 seconds to 1 second, with its day-one partners including Aave, Fireblocks and Uniswap.

Polymarket acknowledges 'unprecedented' governance attack

Polymarket acknowledged a governance attack involving a UMA whale who allegedly manipulated its oracle by casting a significant number of votes to yield a betting market's resolution in their favor.

• The $7 million bet on "Ukraine agrees to Trump mineral deal before April?" surged from a mere 9% yes chance to 100%, sparking controversy and speculation of coordinated manipulation.
• The market resolved to a "yes" despite Ukraine not officially agreeing to President Trump's deal, aiming to gain access to critical mineral resources in the war-torn country.
• Polymarket admitted the market resolved against expectations and is working with UMA to prevent future occurrences but said it will not issue any refunds to bettors as it "wasn't a market failure."

USDC stablecoin supply hits all-time high

Circle's USDC stablecoin supply has reached a new all-time high , surpassing a market cap of $60 billion — a milestone underscoring its growing adoption while still trailing Tether's $144 billion USDT supply.

• USDC is distributed across multiple blockchains, with Ethereum hosting the majority of over $36 billion, followed by Solana with a substantial $10 billion.
• Meanwhile, the overall market cap for stablecoins has also reached a new record of more than $230 billion.

In the next 24 hours

• U.S. jobless claims and GDP figures are released at 8 a.m. ET on Thursday.
• ECB President Christine Lagarde will speak at 2:05 p.m. U.S. FOMC member Thomas Barkin follows at 4:30 p.m.

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