Bitcoin Investors Now Sit on $1.4T in Paper Gains

Plus, 🏛️ White House lays out crypto “Bible,” ⚠️ Polygon glitch halts Heimdall, 🧑‍⚖️ DOJ clears Dragonfly

Author

Juan Aranovich
July 31, 2025

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Hi! In today’s edition:

  • 🚀 Bitcoin holders riding $1.4T profit wave

  • 📜 Trump White House drops crypto policy manifesto

  • 🛑 Polygon halts after post-upgrade bug

  • ❌ DOJ walks back Dragonfly investigation

  • 🎧 ETH turns 10: Foundation resets for the next decade

  • 🏦 Treasury time bomb? Bitcoin corp risk on Bits + Bips

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By Tikta

Bitcoin Holders Hit Record $1.4 Trillion in Unrealized Profit

Bitcoin holders have reached a record $1.4 trillion in unrealized profit as of late July 2025, according to data from onchain analytics platform Glassnode.

“This massive paper gain concentration sets the stage for potential future distribution pressure if prices continue higher,” noted Glassnode on X. 

Despite large recent sell-offs by some major holders, including an 80,000 BTC sale worth about $9.6 billion, the market has remained stable and most investors are holding rather than realizing these profits.

Bitcoin dipped briefly below $116,000, touching an intraday low of $115,800, before tracking higher on Wednesday. The leading digital asset gained momentum above $118,000 after an interest rate decision from the U.S. Federal Reserve.

The central bank opted to hold its benchmark interest rates at a target range of between 4.25% and 4.50%.

White House Releases Long-Awaited Crypto Policy Report

The White House has released its report on crypto policy, which some industry watchers describe as a "regulatory Bible" for the U.S. crypto sector.

Produced by President Donald Trump's Working Group on Digital Asset Markets, the report covers 166 pages and addresses a wide range of issues, including market structure, regulatory jurisdiction, stablecoins, and tax policy.

The working group called on the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to work together and quickly clarify rules around custody, trading, registration, and record-keeping for digital assets.

A proposed Crypto-Asset Reporting Framework (CARF) would require U.S. residents to pay taxes to the Internal Revenue Service (IRS) when they sell digital assets held in foreign accounts – a move aimed at discouraging U.S. taxpayers from moving their crypto offshore.

The report also outlined White House support for a U.S. Bitcoin Strategic Reserve, without clarifying details on how it would be implemented.

Coinbase Chief Policy Officer Faryar Shirzad called the report a “powerful commitment to make the US the world’s Crypto Capital,” sharing optimism that the CLARITY Act could make its way to the President’s desk by the fall.

Polygon Briefly Goes Dark After Sudden ‘Validator Exit’

Polygon suffered an outage on Wednesday, when its Heimdall V2 consensus layer went down for about one hour, just weeks after a complex hard fork upgrade.

In an X post that has since been deleted, Polygon said the outage was triggered by an unidentified validator’s unexpected exit from the network, which led to a consensus bug in Heimdall V2.

Despite the outage, Polygon’s transaction layer Bor, which handles block production and transaction processing, remained fully operational, meaning regular transactions continued and the broader network was not brought to a complete halt.

Still, some users and developers experienced disruptions with block explorers and Remote Procedure Call (RPC) endpoints, notably with Polygonscan showing no new blocks during the outage. 

RPC endpoints are network addresses that users, wallets, or applications use to interact with the blockchain.

Around ten hours after the outage was reported, Polygon said in another X update that almost every RPC provider was back online, while noting that providers might still experience “degraded performance.”

DOJ Says Dragonfly Not a Target Over Tornado Cash Ties

The U.S. Department of Justice (DOJ) has clarified that crypto VC firm Dragonfly and its executives are not targets in the criminal investigation related to Tornado Cash.

In a Monday court hearing of Tornado Cash co-founder Roman Storm, prosecutors said that earlier reports of potential charges against Dragonfly were “inaccurate and misleading.”

“The DOJ has now backtracked,” wrote Dragonfly managing partner Haseeb Qureshi on X, saying that earlier threats made by federal prosecutors were a clear violation of DOJ policy.

“They are never allowed to speculate on prosecuting a third party in open court in front of the media. The prosecutors did this to prevent us from testifying for the defense,” said Qureshi.

As Ethereum Turns 10, Where Is the Foundation Focused Next?

Ethereum’s co-ED is shaking up the Foundation—and has a long-term vision involving business development, communication strategy, and working with founders.

Ethereum turned 10 yesterday, capping off a decade of trials and travails — but also triumphs. After years of being the heart of crypto’s onchain economy, Ethereum stalled last year, losing mindshare and market share to Bitcoin and Solana. During that time, some long-time supporters publicly aired frustrations with the Ethereum Foundation.

Now, there’s a palpable shift in energy.

In this episode, Tomasz Stanczak, the co-executive director of the Ethereum Foundation, reflects on the 10-year anniversary and talks about what’s ahead. 

From internal strategy overhauls to his plans to tackle Ethereum’s UX and developer experience, Tomasz shares how the Foundation is trying to re-center Ethereum — and why he’s betting on it for the next decade. 

He also lays out what he calls a “secondary roadmap,” including bold ambitions like building Ethereum into a platform for AI, machines, and even a new kind of open-source society.

Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.

What’s the Endgame for Bitcoin & Crypto Treasury Companies?

As Bitcoin-native treasuries grow, could centralization and risky leverage bring down the system?

Are corporate Bitcoin treasuries a ticking time bomb, or the start of a new financial paradigm?

In this segment from Bits + Bips, the panel digs into the fate of companies like Strategy and others accumulating BTC on their balance sheets. 

  • What happens when these firms start leveraging their holdings creatively, or recklessly? 

  • Could consolidation undermine Bitcoin’s long-term potential as a reserve asset? 

  • And is the system actually cleaner now than during the 2022 blowups?

Featuring Ram Ahluwalia, Steve Ehrlich, Katalin Tischhauser, and Jake Ostrovskis, this conversation unpacks what could be next for crypto-native balance sheets.

🔔 Also, subscribe to the new Bits + Bips channels!

  • ⚖️ The developers behind Bitcoin mixer Samourai Wallet admitted guilt for running an unlicensed money transfer service, just as Tornado Cash’s Roman Storm faces trial next door for similar crypto-related charges that could carry decades in prison.

  • 🚀 A new plan from Cboe could fast-track crypto ETFs like Solana and XRP by bypassing individual SEC approvals, potentially opening the door to multiple listings as early as October.

  • 👨‍💻🚔 Indian police arrested a CoinDCX software engineer after hackers exploited his work laptop credentials to steal $44 million in crypto, in what the company called a sophisticated social engineering attack.

  • 💹 Kraken grew its revenue by 18% to over $411 million in Q2 despite a 7% EBITDA dip, as it branched into U.S. stock trading and prepared for international expansion in tokenized equities.

  • 📈 Robinhood’s crypto revenue nearly doubled to $160 million in Q2 as CEO Vlad Tenev reiterated plans to dominate the asset tokenization space both in the U.S. and overseas.

  • 🚫 Telegram banned two massive crypto scam hubs, Huione and Xinbi Guarantee, linked to over $35 billion in shady transactions, yet illicit trading quickly surged on affiliated platforms like Tudou Guarantee, prompting U.S. regulators to label Huione a laundering threat and impose wallet sanctions.

  • 📱 The Telegram username @crypto, originally purchased for $350,000 in 2023, received a $25 million offer this week, reflecting the explosive demand for tokenized digital identities on the TON blockchain as Toncoin gains traction globally.

  • 🏦 Coinbase and JPMorgan Chase struck a major deal to allow over 80 million Chase customers to directly link their bank accounts to Coinbase, convert credit card reward points into USDC on Coinbase’s Base network, and fund crypto purchases with Chase cards by 2026.

  • 🐳 The Ether Machine celebrated Ethereum’s 10th birthday by spending $57 million on ETH, boosting its total stash to over 334,000 coins, making it the third-largest corporate holder.

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