$1.15 Billion Liquidated as Bitcoin and Ether Break Support

Hi! In today’s edition:

• ⚠️ $1.15B wiped out as BTC & ETH lose key levels

• 🔄 Circle rethinks USDC with reversibility plan

• 🪙 PayPal + Spark set $1B goal for PYUSD liquidity

• 📈 Hyperliquid’s HYPE token gets Bitwise ETF bid

• 🎙️ Podcast: Why ETH’s staking queue could explode

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$1.15 Billion Liquidated as Bitcoin and Ether Lose Critical Support Levels

Crypto traders faced a tsunami of liquidations on Thursday as major crypto assets led the wider market lower.

Data from CoinGlass shows that the total amount liquidated over 24 hours exceeded $1.15 billion, with 91% of that total coming from traders in long positions. 

Over $400 million in ETH longs were liquidated as the price of ether fell 8% to an intraday low of $3,829. 

“Today we're seeing the largest ETH long liquidations since September 2021. The last time this happened ETH went up 46% the month after,” said Ethereum trader @CryptoGucci on X.

Meanwhile, Bitcoin represented $266 million of liquidated longs, as the leading digital asset lost support above the $110,000 mark, dropping 4% to an intraday low of $109,129.

The majority of liquidations took place on Bybit, followed closely by decentralized exchange Hyperliquid.

“Bitcoin shows signs of exhaustion after the FOMC rally. Long-term holders have realized 3.4M BTC in profits, while ETF inflows slowed,” noted Glassnode in its latest newsletter.

Economist and trader Alex Kruger said on X that we are now in the “desperate zone, where people who are levered up or have no conviction dump.” 

Circle Considers Reversible USDC Transactions to Attract TradFi

Stablecoin issuer Circle is exploring ways to make transactions in its USDC token reversible in cases of fraud or disputes, the Financial Times reported. 

“We are thinking through ... whether or not there’s the possibility of reversibility of transactions, right, but at the same time, we want settlement finality,” said Circle President Heath Tarbert.

The idea aims to align stablecoins more closely with traditional finance, where refunds are possible, potentially boosting institutional adoption. But it challenges one of blockchain’s core principles: immutability. Currently, Circle can freeze or blacklist addresses but cannot reverse completed transfers.

USDC has a market capitalization of $74 billion, second only to Tether’s USDT. Circle, which went public earlier this year, is also developing its Arc blockchain, designed to support stablecoin applications with sub-second settlement speeds.

PayPal Teams Up With Spark for $1 Billion PYUSD Liquidity Boost

Spark has partnered with payments giant PayPal to expand liquidity for the latter’s U.S. dollar-backed stablecoin PYUSD. 

Both PayPal and Spark announced a $1 billion liquidity goal for PYUSD after noting that PYUSD deposits on SparkLend had already surpassed $200 million since listing on the protocol in August.

PYUSD will follow Spark’s bootstrapping strategy for stablecoins to scale up. MonetSupply, the pseudonymous head of Spark’s development company Phoenix Labs, explained the flywheel effect that would come from borrowing activity feeding back into PYUSD utility.

“As users sell into the Curve pool, Spark automatically takes the other side keeping the price at or above USDS, enabling borrowers to build large positions without pushing PYUSD to a discount,” said MonetSupply.

“The accumulated PYUSD is then fed back into SparkLend, which keeps the utilization and rates for pyUSD borrowers low and stable.”

PYUSD, which currently sits at a market capitalization of $1.87 billion, recently expanded to nine new blockchains, including Avalanche and Tron, after an integration with LayerZero.

Bitwise Files to Launch Spot HYPE ETF

Asset manager Bitwise has filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) to launch an exchange-traded fund (ETF) that will hold Hyperliquid’s native token HYPE.

The Bitwise Hyperliquid ETF will be designed as a physically-backed product, meaning it will directly hold HYPE tokens rather than using derivatives or leverage. Coinbase Custody will act as the fund’s custodian, while Bitwise will manage the trust’s operations.

If approved, the fund would be the first to offer U.S. investors exposure to HYPE through traditional brokerage accounts.

Earlier this month, Blockworks reported that VanEck plans to file a Hyperliquid staking ETF in Europe.

HYPE has rallied more than 1,200% since its launch last November. The token is currently trading 28% below its all-time high of $59.39 seen last week.

Ethereum’s Staking Queue Could Soon Explode Again. What It Means for ETH

Laura Shin and Steven Ehrlich discuss why Ethereum’s staking queue may soon get slammed again.

After a major Solana-related security scare, staking provider Kiln pulled $6.6 billion in ETH. Now, it’s preparing to restake, but not all at once. Meanwhile, staking flows from ETFs, digital asset treasury firms, and Q4 retail activity are also lining up, creating a potential bottleneck.

Will the staking queue flip with the unstaking queue? And what does it mean for Ethereum’s future?

• 🔍 U.S. regulators reportedly contacted several firms over suspicious stock movements ahead of crypto treasury disclosures, probing whether insider leaks or improper trades occurred before announcements.

• 🔧 Crypto exchange Gate launched its own Ethereum L2 blockchain, Gate Layer, built on Optimism’s OP Stack to power faster, cheaper Web3 tools using its GT token and GateChain as the foundation for trading, token launches, and more.

• 🚨 Hypervault disappeared after nearly $3.6 million in user funds were funneled through Tornado Cash, raising red flags of an apparent rug pull as its website and social media vanished overnight.

• 🚔 Interpol seized $97 million in crypto and froze nearly 400 wallets as part of a massive anti-cybercrime sting across 40 countries that targeted scams, laundering, and fraud, recovering a total of $439 million in illicit assets.

• 🪄 Centrifuge introduced the first-ever tokenized S&P 500 index fund on Coinbase’s Base network, enabling 24/7 blockchain trading of America’s top stocks through a licensed product managed by Janus Henderson and Anemoy.

• 💡 SharpLink became the first public company to issue tokenized equity shares directly on Ethereum, teaming up with Superstate to explore how regulated stock trading could work within DeFi protocols.

• ⚠️ Aster refunded users in USDT after a pricing glitch in its XPL perpetual contract triggered forced liquidations, which traders blamed on the removal of temporary price limits during the token’s launch phase.

• 🤖 Cipher Mining repurposed its Texas bitcoin data center for AI work in a $3 billion deal with Fluidstack, backed by a $1.4 billion Google guarantee that gave it a 5.4% equity stake in the crypto firm.

• 🏦 CleanSpark secured a new $100 million bitcoin-backed credit line from Two Prime, doubling down on its mining and digital asset expansion just days after tapping Coinbase Prime for the same amount, bringing total credit to $400 million.

• 🧪💰 RockSolid came out of stealth with $2.8 million in backing led by Castle Island Ventures to launch institutional-grade DeFi vaults, including a Rocket Pool-integrated product offering easy access to yield strategies for rETH holders.

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