Towards an oligopoly of validators on Ethereum? – Crypto Recap

Block 1: Essential news

Bitcoin makes its debut at JPMorgan: an unexpected strategic shift

Jamie Dimon (almost) bows to bitcoin. JPMorgan will now allow its customers to buy BTC, a major turning point for a bank that has long been hostile to the crypto world. While the bank will not offer custody services, it will display BTC positions on customer statements. The CEO maintains his personal position — “I don’t like Bitcoin” — but acknowledges growing demand from his customers. This reversal comes as BTC flirts with $105,000. JPMorgan joins Morgan Stanley, Standard Chartered, and Fidelity in the camp of banks that are now betting on crypto. This is another step toward the normalization of Bitcoin in traditional finance.

BlackRock enters DeFi with its BUIDL tokenized fund on Avalanche

This is a major step forward for decentralized finance (DeFi): BlackRock’s tokenized money market fund BUIDL is coming to DeFi. Thanks to Securitize, an ERC-20 version—a technical standard on Ethereum—called sBUIDL has been launched on the Euler protocol via Avalanche. It allows investors to use this token as collateral while continuing to receive returns from the traditional fund. This bridge between real-world assets (RWA) and decentralized applications paves the way for wider institutional adoption. With a market capitalization of nearly $2.87 billion, BUIDL is now compatible with seven blockchains, although it remains reserved for qualified investors (entry ticket: $5m). This is BlackRock’s first foray into DeFi, with the potential to transform the sector.

New record for Bitcoin

Bitcoin broke its all-time high on Wednesday, reaching $109,500, surpassing its previous record set in January ($108,786). Bitcoin is now trading above $111,000.

Spot ETFs, launched in early 2024 by giants such as BlackRock and Fidelity, continue to attract massive amounts of capital: $55 billion in assets under management, according to Bloomberg Intelligence. But the trend goes far beyond the market. The political climate in the United States has become a powerful catalyst:

• On Monday, the Senate introduced a bill to regulate stablecoins, providing a legal framework for dollar-pegged cryptocurrencies such as USDC and USDT.
• On Tuesday, the Texas House of Representatives voted in favor of a bill to create a strategic bitcoin reserve, which is still awaiting Governor Greg Abbott’s signature.

While these measures do not directly affect Bitcoin in its decentralized nature, they send a strong signal to the markets: cryptocurrencies are entering an era of normalization, in which states themselves are considering integrating them into their economic strategies. Finally, on the corporate side, the knock-on effect continues: more than 95,000 BTC were acquired by listed companies in the first quarter, according to CoinGecko. They now hold around 688,000 bitcoins, further reinforcing the asset’s scarcity.

Stablecoins: Ethereum breaks records, adoption explodes

With over $908 billion in volume in April, Ethereum has confirmed its position as the undisputed leader in stablecoin transfers. Despite the rise of Solana and Tron, the network remains at the heart of the ecosystem thanks to USDC (Circle), DAI and USDS, which are popular for their security, compatibility with DeFi and adoption by businesses. Giants such as Stripe, Meta, and Coinbase are accelerating the integration of stablecoins into their services. And this phenomenon goes beyond the crypto world: in Latin America, 71% of companies already use them for cross-border payments.

Block 2: Cryptic Analysis of the week

Ether ETFs and institutional staking: can institutions shape the future of Ethereum? Staking has become the beating heart of Ethereum, and is now crucial to the evolution of blockchain.

As a reminder, staking on Ethereum has become one of the pillars of the network’s operation since its transition to Proof-of-Stake in 2022. In concrete terms, it involves locking up ether (ETH) to participate in transaction validation and blockchain security. In return, users receive an annual reward, comparable to a return, generally between 3% and 5%. This process does not require any technical skills: many platforms allow users to stake their ETH in just a few clicks, even with small amounts. Staking is therefore similar to a passive investment, with a moderate risk linked to the availability of ETH. It is attracting more and more individual investors looking for additional income in crypto. It is therefore both a useful technical activity and a passive investment.

With nearly 27% of ETH currently locked up in staking operations, the massive influx of institutional funds via ETFs could radically transform the balance of the network. Already holding around 3.3 million ETH, or 3% of the circulating supply, ETFs alone could propel the total amount of ETH at stake by more than 10%. Adding to these already staggering figures are new capital inflows attracted by the alluring promise of passive returns.

Where is ETH stored?
CoinDesk

But behind this attractive prospect lies a major challenge: how will these ETFs choose to operate their staking? If regulators approve ETH ETFs, two scenarios could quickly emerge. The first, simplest but riskiest, would be to outsource staking to a handful of third-party operators or centralized custodians. The staking market is currently dominated by Lido, which already controls more than 30% of locked ETH, even though the recently launched community network involves more than 500 different operators. If billions of institutional ETH subsequently flow to a few centralized players, Ethereum could dangerously slide toward an oligopoly of validators, threatening the decentralization of the network.

But it’s not a foregone conclusion. Another, bolder and more promising path is opening up for ETF issuers: vertical integration, with direct management of their own validation nodes. This approach not only preserves the decentralization of the network, but also captures the economic margin currently held by staking operators, who traditionally take between 5% and 15% of the rewards. By internalizing this activity or partnering with independent providers, ETF managers could significantly optimize the financial performance of their funds.

This strategy of direct control is not theoretical: it is already in action.Bitwise’s acquisition of a staking operator sends a strong signal, revealing asset managers’ ambition to reposition staking as a core, differentiating element of their offering rather than a simple ancillary service. In a highly competitive market where every basis point counts, this ability to internalize staking management could become a decisive advantage.

This strategic choice marks a real fork in the road for Ethereum. On the one hand, there is the “plug-and-play” scenario, where institutions opt for convenience by concentrating their staking operations with a few trusted operators, at the risk of creating critical points of centralization. On the other, a more virtuous model, where ETF managers actively engage in the decentralized governance of the network, thereby strengthening Ethereum’s robustness and credibility in the long term.

The stakes are clear: institutions can either weaken Ethereum for the sake of convenience or strengthen its foundations by fully embracing their role in the blockchain ecosystem. The choice they make will have lasting consequences for the very future of blockchain.

Cryptocurrency rankings (Click to enlarge)

Source: MarketScreener

Block 4: Prices for the week

A billion streams and no fans: Inside a $10 million AI music fraud case (Wired)

Secrets from the world’s top privacy experts (The Atlantic)

NFTs in sports: what you need to know about the dangers of fraud and counterfeiting (The Conversation)