Coinbase S&P Debut; Chinese BTC Whales

Olivia Capozzalo & Camila Russo
May 19, 2025

Happy Monday, Defiers! Here’s what you need to know in web3:

Crypto just crossed a significant milestone: Today, May 19, Coinbase joins the S&P 500, the first pure-play crypto company ever admitted to Wall Street’s flagship index.

The move crowns a decade-long climb from hacker-garage exchange to blue-chip constituent. Analysts expect up to $9 billion in passive-index inflows will buy COIN. It’s even more symbolic that Coinbase replaces Discover Financial Services — a digital payments upstart from the ‘80s that’s already part of aging legacy finance today — to make way for what blockchain advocates hope represents the future of finance.

But a couple of clouds are raining on what would otherwise be Coinbase’s “We’ve Made It” parade. Only days before the index news last week, the crypto exchange disclosed that bribed overseas support agents leaked customer data and the scammers tried to extort $20 million. No keys or funds were lost, but the episode could cost the exchange up to $400 million in reimbursements.

The breach showed the risks of centralized systems like Coinbase’s, versus decentralized exchanges, where users custody their funds and control their data. And yes I know it’s unrealistic to expect everyone to use DeFi and DEXs, and there are security tradeoffs to both. But we should be moving to a place where we’re using cryptography to our advantage, with innovations like zero-knowledge-based identity systems – this is the crypto industry after all.

Speaking of identity verification, the other blunder in Coinbase’s victory lap came from the SEC, which reopened a probe into whether Coinbase overstated “verified users” during its sprint to go public. The exchange dismissed the investigation, arguing it looks at an outdated metric, and the market has already shrugged off the news.

In other Coinbase news, Fortune reported that the exchange is eyeing a takeover of Circle, the company behind USDC, at a price north of $5 billion. If the deal closes, Coinbase would fully control USDC, which it now co-issues with Circle, meaning the dominant U.S. fiat on-ramp would also run the rails on which digital dollars move here. The move makes perfect strategic sense for Coinbase, but it would further consolidate power around the exchange, which regulators may balk at, just as Congress inches toward stablecoin legislation.

While Coinbase continues building its empire, power is also concentrating in Bitcoin-land, with the ownership map tilting further toward the whales. Michael Saylor’s corporate vehicle bought another 7,390 BTC for $765 million, lifting its hoard to roughly 2.7 % of all coins in circulation, and drawing a fresh investor lawsuit over disclosure practices.

Across the Pacific, a trio of thinly traded Chinese-linked firms announced nine-digit Bitcoin purchases: DDC Enterprise said it plans to stockpile 5,000 BTC; Addentax floated an $800 million share sale to buy up to 8,000 BTC; and GD Culture Group trumpeted a $300 million reserve split between Bitcoin and a certain politically charged memecoin.

Japan’s Metaplanet joined the feeding frenzy with another 1,004 BTC purchase.

Individually, each treasury pivot looks like rational balance-sheet management in a world inching toward inflation-proof assets. Collectively, though, they point to a scenario where a handful of companies and countries own a double-digit share of what was originally an apolitical, decentralized network to resist the establishment.

Put Coinbase’s week beside Bitcoin’s and we can start to see a pattern: the more crypto integrates with legacy finance, the more familiar its power structures become. Index inclusion, corporate treasuries, billion-dollar mergers. We’re watching the simultaneous mainstreaming and re-centralization of crypto. If builders want the open financial system to stay open, they’ll need to double-down on decentralizing custody, governance, and data, even while celebrating that, yes, crypto just scored a seat at finance’s most exclusive table.

With love,

Cami, The Defiant founder

✍️ In today’s newsletter:

• Total crypto market cap dips
• Chainlink’s CCIP is live on Solana
• BUIDL grows after multiple integrations
• SEC Chairman Atkins talks about a crypto “super-app”
• Vitalik proposes alternative scaling roadmap

Read more below!

🙏 Sponsored

• Stellar Network Aims to Become Top 10 DeFi Chain

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Soul is a cross-chain lending protocol aggregator that unifies liquidity across lending protocols, offering seamless access to the best borrowing and lending rates across ecosystems. Users can supply assets on one protocol and borrow against them on another, optimizing yield strategies without bridging assets.

USD₮0 is live on Flare — the omnichain version of USDT, backed 1:1 and built for seamless cross-chain movement. With Kraken supporting USD₮0, earn top-tier APY on Flare now.

Maple celebrates surpassing $1b in TVL by giving away $500k USDC in rewards. There are multiple prizes up for grabs with a $300k grand prize for SyrupUSDC depositors.

This is the news that mattered in the past 24 hrs:

1. The crypto market began the week in the red as both the TradFi and DeFi sectors continue to experience volatility.
2. Chainlink's Cross-Chain Interoperability Protocol (CCIP) launches on Solana mainnet, connecting $19B+ in assets across 57 chains.
3. BlackRock’s tokenized RWA fund BUIDL has hit new highs after the introduction of two new use cases: BounceBit’s basis trading approach, as well as Euler’s recent integration.
4. Pro-crypto SEC Chairman Atkins wants to make it possible for registered broker-dealers to custody and trade cryptocurrencies, whether or not the assets are considered securities.
5. Vitalik Buterin has proposed an alternative scaling roadmap that could make it easier and more private for people to use Ethereum.

🎬WATCH

In our latest podcast, we interview Shaw Walters, the founder of Eliza Labs, one of the biggest projects at the intersection of crypto and AI.

We talk AI, but Shaw also talks passionately about why the current financial system is broken — “immoral” even — and how crypto can help us break free. But only if we manage to move past the casino phase. Give it a listen, it’s a heated one.

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DeFi is evolving rapidly and maturing, entering a new phase of adoption and growth. With both established protocols like Aave and new entrants driving innovation in capital efficiency and market design. However, liquidity fragmentation across chains and protocols remains a core limitation, particularly in the lending sector. Soul’s new DeFi primitive addresses this by enabling cross-chain lending coordination, using LayerZero’s messaging infrastructure to allow users to borrow across chains and protocols while keeping collateral in one place. Built by the team behind Hatom, a 2 years old secure and mature lending protocol, Soul aims to become a foundational layer in a new phase of interoperable and composable DeFi.

READ MORE: Solving major DeFi problems: Soul new primitive to finally solve liquidity fragmentation

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