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Bitcoin is back above $100k, ETH is ripping, and even small caps are finally stirring. But this week’s rally isn’t just about price. From Coinbase’s Deribit buy to Ethereum’s Pectra upgrade and shifting derivatives flows, we break down the data, the drivers, and why this move might have legs.

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World Chain usage:

World Chain is clocking in some all time-highs. In the past week alone:

• 564k unique users used WLD (chart above). 

• According to World’s Andy Wang, $4.5m in WLD tokens were spent.

• TVL on the chain surged from $3.8m to $28.6m, based on DefiLlama data.

This comes on the back of World’s $300k Developer Rewards program to incentivize creators, announced two weeks ago. Morpho, Kalshi and PoolTogether are some of the “mini apps” driving chain usage. Mini apps are a framework that devs use to build an access point inside the World App to gain access to World App users, wallets and IDs, Tools for Humanity head of ecosystem Leighton Cusack told Blockworks.

— Donovan Choy

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Markets scramble for meaning

Over the past 48 hours, crypto markets have impulsed higher. The action was led by BTC breaking the $100k barrier for the first time since the start of February.

BTC is now in an uptrend, after two weeks of consolidation above the prior critical $91k breakdown level. On April 24, I wrote “the trend looks primed to resume — if it doesn’t break down soon.” Other than a test just below $93k a few days later, we saw a steady grind higher.

The ETH rally hasn’t gone unnoticed, either. ETH saw strong upside momentum, with spot up about 30% since Wednesday amid surging trading volumes — a good sign.

Some argue Ethereum’s recent Pectra upgrade is one reason. “It introduces long-awaited improvements that will boost Ethereum’s efficiency and scalability,” said BOB co-founder Dom Harz.

Meanwhile, a pivotal institutional story unfolded with Coinbase’s acquisition of Deribit, the leading off-chain venue for crypto options. “Global derivatives trading is a key driver of growth for Coinbase,” said Fractal Bitcoin’s Spencer Yang, the ex-product head for Coinbase Wallet. “A cash [and] stock deal is a great bargain for Coinbase shareholders since it helps them expand globally.”

And speaking of derivatives, what do they tell us about the longevity of this price action? This move was driven by heavy call spread activity and optimism around trade developments, according to Wintermute analyst Jake O.

Traders are chasing frontend volatility, creating a positive spot-vol correlation through mid-May. However, implied volatility (IV) softens past June, suggesting the rally isn’t being aggressively pursued further out.

That’s confirmed by Nick Forster, founder of onchain options platform Derive.xyz. He sees trader sentiment as “overwhelmingly bullish, with 59% of all ETH premiums and 67.3% of BTC premiums being used to buy calls.”

The expectation is for further short-term upside. “The chance of ETH settling above $2,500 by the end of the month has surged from 2% to 15% and the chance of BTC hitting over $115K by month’s end has increased from 3% to 13%,” according to Forster.

The broader crypto market landscape is even more telling: ETH is playing catch up with a 25% rally in the ETH/BTC ratio. And beyond the majors, there’s also strength. We’re witnessing signs of life in the long tail of crypto assets. TradingView’s OTHERS index is up 16%, while stablecoin dominance is dropping — a sign that sidelined capital is flooding back into risk assets.

The US-UK “trade deal” announced yesterday is credited by some with boosting market risk appetite, though it’s largely symbolic. While still more of a framework than a deal, it will have no meaningful impact on US exports and will keep 10% tariffs on most UK imports, making them more expensive for American consumers. As economist Justin Wolfers noted: The Brits “already charge average tariffs of only 1%,” so this turn of events is “a photo op with little macroeconomic significance.”

Even optics can move markets, of course.

“[W]ith these deals, there is hope for more such concessions, and with more deals and concessions will come more certainty and better market conditions,” said Galxe co-founder Charles Wayn. “The bull market may revive yet, and alt season could still be on the horizon.”

— Macauley Peterson

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The rise of SolFi in Solana’s DeFi

Dan Smith: The SolFi DEX only emerged in Solana in October 2024 and is now already seeing about 12% of Solana DEX volumes. SolFi is using a Lifinity-style design where the AMM is priced by oracles rather than LPs moving their liquidity, which lets them remove toxic MEV flows. Currently, usage is concentrated in SOL-USD and stablecoin swap volumes — about 1/4 of all SOL-USD volumes and ~20% of all stablecoin swap volumes.

Carlos Gonzalez: DEXs will have to try and dominate a niche. Market makers will not price long-tail assets like memecoins because it’s too risky. Passive liquidity on AMMs like Raydium or PumpSwap are more efficient [for] handling liquidity for long-tail assets. For assets requiring highly concentrated liquidity, like stablecoin or LST swaps, however, it’ll likely be dominated by prop AMMs like SolFi.

Innovations in Solana lending?

Carlos Gonzalez: Kamino is moving toward a modular architecture but hasn’t rolled out yet. Loopscale is another interesting protocol that takes an order book-based approach to match lenders and borrowers. This removes the spread in traditional style DeFi lending, which opens up new use cases like fixed rates and structured products. Loopscale is doing this with more aggressive loan values and leverage. Loopscale did, however, have an oracle pricing issue with a RateX asset and suffered a small hack. The team was able to recover the lost funds but it still highlights the relative immaturity in Solana DeFi [compared] to Ethereum’s.