Bitcoin signatures rely on elliptic curve cryptography, a system in which a private key generates a public key through math that runs only one way. Anyone can check the public key, but nobody can work backward to the private one. However, Shor’s algorithm, a quantum method published in 1994 for problems that ordinary computers cannot crack, can be fed a public key and return the private key that generated it.
Hashing is a different kind of problem. A hash scrambles an input into a fixed-length fingerprint and cannot be run backward, and the best quantum attack on it, called Grover’s algorithm, only halves the exponent rather than collapsing it, taking a 256-bit hash from 2^256 guesses down to 2^128.
That is still more guesses than a machine making a billion a second could get through in the lifetime of the universe.
Modern wallets are built on hashing. A wallet generates addresses in a tree, deriving each key from its parent, and a “hardened” derivation step feeds the parent’s private key through HMAC-SHA512 to produce the child key.
That is a one-way function. An attacker who breaks an address after Q-Day ends up holding exactly the key held, and cannot climb the tree to the key it came from.
Robinhood Chain launched, filled with memecoins, briefly ranked third among DEXs, and the “Solana killer” talk started immediately. Then you look at the actual numbers. Solana has 27 times the value locked and 2 million more users. This is not a flippening. It is a fair fight over the wrong metric.
Within days of Robinhood Chain going live, the comparison wrote itself. A memecoin frenzy sent the chain’s DEX volume past $3 billion in a week; it briefly cracked the top three networks by daily DEX volume, and crypto Twitter did what crypto Twitter does: it declared a Solana killer.
The parallel was tidy. Solana also grew through a memecoin boom, so surely Robinhood was running the same playbook toward the same destination. Then you pull the actual data, and the tidy story falls apart. Solana has roughly 27 times Robinhood Chain’s value locked and millions more users.
The one metric where Robinhood looked competitive, raw volume, is the flimsiest number on the board. This piece is about whether Robinhood Chain can flip Solana, and the short answer is no, not close, and the more interesting answer is that flipping Solana was never the right frame.
The scoreboard
Start with the numbers, because the numbers settle most of the argument before it starts.
Solana, as of mid-July 2026, carries around $4.93 billion in total value locked, does roughly $1.91 billion in daily DEX volume, has more than 2 million active addresses, and generates about $3 million in daily application revenue. These are the metrics of a mature, heavily used layer-1 with a deep DeFi ecosystem, years of accumulated liquidity, and a large, sticky user base.
Robinhood Chain, roughly 2 weeks after launch, sits at around $185 million in value locked, having posted more than $3 billion in DEX volume across its first week. Depending on the day and the source, its TVL has been quoted between $185 million and $312 million, with the higher figure heavy on stablecoin deposits. Active addresses are counted in the hundreds of thousands cumulatively, not the millions active.
Line the durable metrics up, and the gap is stark. On value locked, Solana leads by a factor of roughly 27 to one against the lower Robinhood figure, and still around 16 to 1 against the higher one. On active users, the gap is larger still. On application revenue, Solana’s ecosystem earns real fees across a diverse set of protocols; Robinhood Chain’s revenue is concentrated in memecoin trading and inflated by incentives. There is exactly one metric where Robinhood looked competitive in its first fortnight, and that is raw DEX volume, where a memecoin frenzy briefly pushed it into the same conversation as networks many times its size.
That single metric is doing all the work in the flippening narrative, and it is the metric that deserves the least trust.
Why volume is the wrong number
Volume is seductive because it is large and it moves fast, and it is misleading for the same reasons.
Robinhood Chain’s $3 billion first week was overwhelmingly memecoin trading. $CASHCAT alone generated roughly $98 million in a single day, about 17% of the chain’s entire DEX volume, and the broader wave of Robinhood-themed tokens, Cash Dog in Hood, Little John, Hoodrat, drove most of the rest.
Memecoin volume is the most transient category of on-chain activity there is. It arrives with attention and leaves with it, and it leaves no infrastructure behind. A chain doing $3 billion in memecoin volume this week can do a fraction of that next month, as the 33% single-day $CASHCAT drop after its launchpad exited already showed.
JUST IN: Robinhood Chain protocol TVL crosses $400 million dollars pic.twitter.com/MxScKayF6Q
— crypto.news (@cryptodotnews) July 18, 2026
Then there is the subsidy. Robinhood Chain ran a 90-day gas fee subsidy from launch, which makes transactions artificially cheap and inflates transaction counts and, indirectly, trading activity. Any volume comparison during the subsidy window is measuring a promotion as much as organic demand. The honest read of that number will only be available once the subsidy expires and users start paying real costs.
Value locked, by contrast, is sticky. It represents capital that has chosen to reside on the chain, in lending protocols, liquidity pools, and asset-management strategies, and it does not evaporate with a memecoin’s attention cycle. Solana’s ~$4.93 billion in TVL is the accumulated result of years of protocols, integrations, and users committing capital. Robinhood’s ~$185 million is a 2-week-old figure heavily weighted toward stablecoin deposits and speculative liquidity. TVL is the metric that predicts whether a chain is durable. Volume is the metric that predicts whether it is currently trending. They are not the same, and the flippening narrative relies entirely on the second.
The bull case for Robinhood
The strong case for Robinhood Chain does not run through on-chain metrics at all, and the people making the flippening argument are looking in the wrong place because the actual advantage is off-chain.
Robinhood has roughly 28 million customers across 38 countries and more than a decade as one of the largest retail investment platforms in the United States. That is a distribution asset no crypto-native chain possesses. Solana had to acquire its users one at a time through the slow, expensive work of crypto adoption.
Robinhood already has tens of millions of funded accounts belonging to people comfortable trading both stocks and crypto, and it can put its chain in front of them inside an app they already use. If even a modest fraction of that base becomes active on-chain, the user numbers change quickly. Brand equity and distribution are exactly what earlier tokenization projects lacked, and Robinhood has both in abundance.
The memecoin-as-ignition argument also has real historical support. Solana itself grew through a memecoin cycle: BONK, WIF, and the Pump.fun era, before it produced serious infrastructure and institutional adoption. Base followed a similar arc. Speculative trading bootstraps the liquidity, the market makers, the tooling, and the attention that serious applications later need. In this reading, Robinhood Chain’s memecoin phase is not a failure to attract real activity; it is the normal first stage, and judging a 2-week-old chain by its TVL is like judging Solana by its 2021 numbers.
JUST IN: $Cashcat memecoin down over 70% since Hyperliquid perpetual listing pic.twitter.com/HvRwCzPYzx
— crypto.news (@cryptodotnews) July 17, 2026
And Robinhood is playing a different game entirely. Its chain is built for tokenized stocks and real-world assets, a category Solana is also chasing but where Robinhood brings brokerage licenses, custody relationships, and regulatory infrastructure that a crypto-native chain has to build from scratch. If the RWA thesis plays out, Robinhood competes on ground where its traditional-finance credentials are an advantage, not on the DeFi metrics where Solana is years ahead. The flippening question assumes the two chains want to be the same thing. They may not.
The bear case for Robinhood
The skeptical case is that Robinhood Chain has attracted exactly the kind of activity that does not convert, and that the gap to Solana is not a head start Robinhood can close but a structural difference it may never close.
The mercenary-liquidity problem is the core of it. Memecoin traders are loyal to activity, not to chains. They arrived on Robinhood Chain because that is where the new-launch action was, and they will leave for the next chain offering quicker profits without a second thought. The Noxa launchpad that powered the entire boom generated roughly $12 million in fees and then stopped accepting launches and went dark within 11 days of the chain’s launch. That is not the behavior of infrastructure settling in; it is the behavior of an extraction cycle moving through. When the memecoin attention leaves, the question is what remains, and right now what remains is roughly $12.8 million in actual tokenized real-world assets, the thing the chain was built for.
The convert-the-traffic problem compounds it. Robinhood’s 28 million customers are a distribution asset only if they can be moved on-chain, and there is no evidence yet that memecoin degens and Robinhood’s retail stock traders are the same people or that 1 becomes the other. The chain’s current users may have almost no overlap with the tokenized-asset investors Robinhood hopes to serve. Distribution is potential, not conversion, and the conversion has not been proven.
Then there is the structural point that on-chain metrics are not a race Robinhood is quietly winning. Solana continues to outperform Robinhood Chain across essentially every DeFi metric despite the new chain’s loud debut, and Solana is not standing still. It has its own institutional momentum, its own tokenized-asset push, its own SBI partnership for on-chain financial markets in Japan. Robinhood is not catching a stationary target. It is entering, 2 weeks old, a competition against a network with a multi-year head start that is itself accelerating. Closing a 27-to-1 TVL gap against a moving, growing competitor is a different proposition than the volume charts suggest.
The Base comparison nobody makes
The flippening debate fixates on Solana, but the more instructive comparison is Coinbase’s Base, because Base is the closest thing to a control group for exactly what Robinhood is attempting, and it complicates both the bull and bear cases.
Base launched in 2023 as a corporate-backed Ethereum layer 2, built by a licensed, publicly traded American financial company with a large existing user base, aimed at bringing mainstream users on-chain. That is Robinhood Chain’s template almost exactly. And Base’s early growth, like Robinhood’s, ran heavily through memecoins before it developed into a more diversified ecosystem. So Base is the case study for whether a corporate chain can convert a speculative launch into durable activity, and the answer it offers is genuinely mixed.
On the bull side, Base did convert. It built real DeFi, real stablecoin activity, and real applications on top of the initial speculation, and it became one of the larger L2s by several measures. Coinbase’s distribution, tens of millions of users, mattered, and the memecoin phase did function as ignition rather than as the whole story. That is the precedent Robinhood is betting on, and it is a real one: a corporate chain did turn a speculative launch into something lasting.
On the bear side, Base did not flip Solana either, and it had a 2-year head start on Robinhood plus a parent company that was crypto-native from birth. If Base, with Coinbase’s crypto-specific expertise and a longer runway, sits alongside Solana instead of above it, the idea that Robinhood Chain will vault past Solana looks even less plausible. And Base has its own value-capture questions as an Ethereum L2, the same ones that apply to Robinhood Chain, where the base layer captures little of the economics. Base shows the corporate-chain model can work; it also shows that working means becoming a significant chain, not dethroning the incumbent. That is the realistic ceiling for Robinhood Chain too: not flipping Solana, but earning a durable place alongside it, and only if it converts the way Base did rather than fading the way most launch-frenzies do.
What a flippening would actually require
The word “flippening” gets thrown around loosely, so it is worth being precise about what would have to happen for Robinhood Chain to actually surpass Solana, because the specifics show why the headline math is not close.
Flipping Solana is not one event; it is a set of them across separate metrics, and they do not move together. On total value locked, Solana holds roughly $4.93 billion against Robinhood Chain’s ~$185 million, a gap of about 27 times. Closing that does not mean matching Solana’s memecoin volume for a week. It means persuading serious capital, lending markets, stablecoin issuers, restaking protocols, and asset managers to park billions on a corporate L2, which is a trust-and-time problem that speculative volume does nothing to solve. TVL is sticky precisely because it represents commitment, and commitment is the thing a memecoin wave cannot manufacture.
On active addresses, Solana runs above 2 million against a far smaller base on Robinhood Chain, and the composition matters more than the count. Solana’s addresses span DeFi users, NFT traders, payment apps, and memecoin degens across a mature ecosystem. Robinhood Chain’s early activity is concentrated in memecoin speculation and a gas subsidy that inflates the raw transaction figure. An address trading $CASHCAT once is not equivalent to an address running a lending position, a payment flow, and a staking allocation. The headline number can converge while the underlying engagement stays a chasm apart.
On application revenue, Solana generates around $3 million daily from a diversified base of protocols. Robinhood Chain’s revenue is thin and skewed toward the launchpad-and-memecoin complex that already showed it can evaporate in days when Noxa went dark. Sustainable app revenue requires applications people use for reasons other than speculation, and building that catalog is measured in years of developer adoption, not weeks of viral trading.
Then there is the structural ceiling nobody in the flippening conversation mentions: Robinhood Chain excludes US persons from its flagship products. Stock Tokens are barred to Americans, wallet perpetuals are barred to Americans, and the chain’s entire regulated-RWA thesis is aimed at a user base that cannot legally touch its marquee offerings from Robinhood’s home market. Solana has no such wall. A chain competing for global L1 dominance with its largest potential market fenced off from its best products is running the race with a weight the incumbent does not carry.
Put those together, and the flippening is not a single line for Robinhood Chain to cross. It is four separate lines, on four metrics that move at different speeds for different reasons, at least one of which is capped by regulation. Memecoin volume, the one number Robinhood Chain can actually post, is the least sticky and least predictive of the set. That is why the honest answer to the headline is not “not yet.” It is “not close, and the gap is wider than the volume charts make it look.”
The verdict
So will Robinhood Chain flip Solana? On the metrics that matter, no, and not close, and not soon.
The value-locked gap is roughly 27 to 1. The user gap is larger. The revenue gap is structural. The only metric where Robinhood was competitive is raw volume, which is the least durable measure available, is dominated by transient memecoin trading, and is inflated by a temporary gas subsidy. A chain does not flip a mature layer-1 by winning the one number that evaporates when attention moves on. Every durable indicator points to Solana remaining well ahead for the foreseeable future.
But the question contains a flawed assumption, and that is the more useful thing to say. “Flip Solana” treats the two chains as competitors for the same prize, and they may not be. Solana is a general-purpose, crypto-native layer-1 with a deep DeFi ecosystem built by and for crypto users. Robinhood Chain is a corporate settlement layer built by a licensed brokerage to bring tokenized stocks and real-world assets to a retail base that already trades on Robinhood. Their overlap right now is memecoins, which is precisely the activity neither of them was built for and which will belong to whichever chain is currently paying attention. The lasting competition, if there is one, is over tokenized real-world assets, and that race has barely started.
The honest framing is this. Robinhood will not out-DeFi Solana; that is not a contest it is positioned to win and probably not one it is trying to win. What Robinhood can do is convert a slice of 28 million existing customers into on-chain users of tokenized-asset products, on rails where its brokerage credentials matter more than its DEX volume. If it does that, it does not need to flip Solana, because it will be winning a different game. If it does not, the memecoin volume fades, the chain settles back to its $12.8 million of real assets, and the flippening talk looks like what it probably is: a volume chart mistaken for a verdict. The number to watch is not DEX volume and not the gap to Solana. It is whether tokenized real-world assets on Robinhood Chain grow, and Robinhood’s July 29 earnings are the first real look.
Frequently Asked Questions
Is Robinhood Chain bigger than Solana?
No, and the gap is large. As of mid-July 2026, Solana holds around $4.93 billion in total value locked against Robinhood Chain’s roughly $185 million, a gap of about 27 to 1. Solana also has more than 2 million active addresses and around $1.91 billion in daily DEX volume from a mature ecosystem. Robinhood Chain briefly matched Solana on raw DEX volume during a memecoin frenzy, but trails badly on every durable metric.
Why do people compare Robinhood Chain to Solana?
Because Robinhood Chain’s DEX volume surged past $3 billion in its first week, briefly ranking among the top networks, and because Solana famously grew through a memecoin cycle of its own before maturing. The parallel is that both bootstrapped with speculation. The comparison relies heavily on volume, which is the least durable metric and, for Robinhood, is inflated by memecoin trading and a temporary gas subsidy.
Could Robinhood Chain flip Solana eventually?
On DeFi metrics, it is unlikely any time soon, given a 27-to-1 value-locked gap against a competitor that is itself growing. Robinhood’s real advantage is off-chain: roughly 28 million existing customers and strong retail brand equity. If it converts a meaningful share of that base into on-chain users of tokenized-asset products, it could become large without ever matching Solana on DeFi, because it would be competing on different ground.
Why is DEX volume a misleading metric?
Because it is transient and easily inflated, Robinhood Chain’s volume was overwhelmingly memecoin trading, which arrives and leaves with attention and builds no lasting infrastructure. A 90-day gas subsidy also made transactions artificially cheap during the launch window. Value locked, which represents capital committed to the chain’s protocols, is a far better predictor of durability, and on that measure Solana leads decisively.
What is Robinhood Chain actually built for?
Tokenized stocks and real-world assets. It launched as an Ethereum layer 2 with Stock Tokens as the flagship product, targeting a retail base that already trades equities on Robinhood. Its competitive advantage is brokerage licenses, custody relationships, and regulatory infrastructure. The memecoin activity that drove its early volume is not the use case it was designed for, and only about $12.8 million in real-world assets currently sit on it.
What happened with $CASHCAT and the memecoins?
$CASHCAT, a token named after Robinhood’s original working name, surged to a roughly $156 million market cap and at one point generated about 17% of the chain’s daily DEX volume. It spawned a wave of Robinhood-themed tokens. The launchpad driving the boom, Noxa, earned around $12 million in fees, then went dark within 11 days, and $CASHCAT fell more than 33% in a day, illustrating how quickly memecoin activity can leave.
Does Robinhood’s user base guarantee success?
No. Roughly 28 million customers is a distribution advantage, but distribution is potential, not conversion. There is no evidence yet that Robinhood’s retail stock traders will become active on-chain users, or that the memecoin traders currently driving activity overlap with the tokenized-asset investors the chain targets. Converting existing customers into on-chain users is the unproven step the entire strategy depends on.
When will we know if the strategy is working?
Watch the tokenized real-world asset figure on the chain, currently around $12.8 million, rather than DEX volume or the gap to Solana. If real assets grow substantially while memecoin activity fades, the traffic is converting, and the strategy is working. Robinhood’s second-quarter earnings on July 29 should offer the first real look at Stock Token adoption, and liquidity behavior after the gas subsidy expires will be the next test.
Disclaimer:This article is for information and educational purposes only and does not constitute financial or investment advice. It compares blockchain networks and company strategies, not the merits of any token. Memecoins are highly speculative, and most participants lose money. Nothing here is a recommendation to buy any asset or use any platform. Always do your own research. On-chain figures move quickly and are accurate as of July 17, 2026.
Ethereum’s best marketing line was that using it destroyed it, that every transaction burned $ETH and shrank the supply. Then the network solved its scaling problem, activity fled to layer 2s, and the burn collapsed. The scaling worked. The scarcity did not survive it.
For about eighteen months, Ethereum had the best story in crypto, and the story was a paradox: the more people used the network, the rarer its token became. Every transaction burned a little $ETH, and when the network was busy enough, it burned more than it created. Supply went down. The community called it ultrasound money, a deliberate jab at Bitcoin’s “sound money,” complete with a bat emoji and a movement.
For a while, the data backed it up. Then Ethereum did the thing it had promised to do for years, which was to scale, and scaling broke the story. Activity moved to layer-2 networks that pay almost nothing to the base chain, the burn collapsed, and $ETH quietly went inflationary again. This is the story of how Ethereum’s greatest technical success dismantled its best economic narrative, and whether a December upgrade can put the pieces back.
What ultrasound money actually meant
The mechanism is worth getting exactly right, because the whole debate turns on it.
In August 2021, Ethereum activated EIP-1559, which changed how transaction fees work. Instead of paying miners directly, every transaction now pays a base fee that is burned, permanently removed from circulation. The busier the network, the higher the base fee, and the more $ETH destroyed. On its own, that is just a fee-burning mechanism. It became a monetary thesis when Ethereum switched from proof-of-work to proof-of-stake in the September 2022 Merge, which cut new $ETH issuance by roughly 90%, because the network no longer had to pay energy-intensive miners.
Put the two together, and you get the ultrasound thesis. Issuance dropped to a trickle after the Merge. Burning continued with every transaction. If burning exceeded issuance, total $ETH supply would shrink over time, making the asset deflationary. And a deflationary asset with growing demand should, in theory, appreciate. Ethereum would become harder money than Bitcoin, whose supply still grows, hence “ultrasound.” The tracking site ultrasound.money existed to display exactly this: supply ticking down, day by day.
For a stretch after the Merge, it happened. Supply fell back toward and below the level it sat at during the Merge itself. Burns outpaced issuance. The narrative was not hype; it was, for that window, an accurate description of the data. That is what made it powerful, and what made its reversal so awkward.
NEW: Tom Lee calls Robinhood Chain proof that $ETH is money
The chain uses Ethereum as native gas, denominates fees in $ETH, and settles on Ethereum L1 while generating volume exceeding many established DEXes pic.twitter.com/Ir2hTsaMiu
— crypto.news (@cryptodotnews) July 12, 2026
How scaling broke it
The break came from Ethereum solving its most famous problem, and the irony is total.
Ethereum’s scaling strategy is to push transactions off the expensive base layer and onto layer-2 rollups, networks like Arbitrum, Optimism, and Base that process transactions cheaply and then post compressed data back to Ethereum for security. The base layer becomes a settlement and target=”_blank”>daily burn dropped to as low as 50 to 70 $ETH. The base layer had lost its primary fee source. With issuance running around 1,700 $ETH per day and burn collapsing well below that, the equation flipped: Ethereum began creating more $ETH than it destroyed. By various measures across 2025 and into 2026, net annual inflation ran somewhere between roughly 0.2% and 0.8%, depending on the window. $ETH supply crossed back above its Merge-era level. The deflation was over.
The mechanism that made ultrasound money true, EIP-1559 burning at scale, had not been removed. It had been bypassed. The activity simply moved to a layer where the burn does not happen in any meaningful amount. Ethereum scaled successfully and, in doing so, severed the link between usage and scarcity that the entire thesis depended on.
The bull case: it still works, just differently
The response from Ethereum’s defenders is not denial. It is reframing, and parts of it are genuinely strong.
The first point is that elastic scarcity is the actual feature, not permanent deflation. Ethereum was never designed to deflate forever at a fixed rate. It was designed to burn in proportion to demand, which means it becomes deflationary when the network is busy and mildly inflationary when it is quiet. During periods of high mainnet activity, above roughly 16 gwei average gas, burn still exceeds issuance, and $ETH still goes net deflationary, temporarily. The mechanism works exactly as designed; it is just that a scaled network spends more time in the quiet regime. In this reading, ultrasound money was always conditional, and the condition is demand, not a promise.
The second point is that issuance is still radically lower than before. Even mildly inflationary, Ethereum issues roughly 90% less $ETH than it did under proof-of-work. Compared to Bitcoin, which currently inflates at around 0.8% annually on a fixed schedule, Ethereum’s roughly 0.2% net inflation in calmer periods is actually lower. Both assets inflate in 2026; Ethereum, by some measures, inflates less. The “harder than Bitcoin” claim survives in a narrow, technical form even without net deflation.
The third point is that the supply figure overstates the sell pressure. Roughly 28% to 30% of all $ETH is locked in staking, earning yield and not circulating. The tradeable float, $ETH actually available on exchanges, is meaningfully smaller than the headline supply number, and it shrinks as more $ETH is staked. A modestly inflating total supply with a large and growing staked portion is a very different pressure than the raw inflation number suggests. Demand from ETFs, treasury companies, and staking can absorb 0.2% inflation without difficulty.
NEW: Ethereum ETFs see 58 million dollars in net inflows on July 14
Fresh capital flowed into spot Ethereum ETFs during the latest session pic.twitter.com/V3vb5Y7x39
— crypto.news (@cryptodotnews) July 16, 2026
And the fourth point is simply that the store-of-value case never rested on deflation alone. As long as demand for Ethereum’s blockspace, its role as settlement for stablecoins, tokenization, and DeFi, grows faster than supply, price can rise regardless of whether supply ticks up 0.2% a year. Scarcity was a nice story. Utility is the real thesis.
The bear case: the narrative was load-bearing
The skeptical reading is that the ultrasound story was not just marketing, that it was doing real work in the investment case, and that losing it matters more than the reframing admits.
The blunt version comes from the on-chain data and the people watching it leave. Daily network fee revenue on Ethereum fell from near $40 million in early 2025 to a local low around $10 million in 2026. That is not just a burn problem; it is a value-accrual problem. If the base layer captures little fee revenue because activity happens on rollups that pay it almost nothing, then holding $ETH is a bet on an asset whose own network is monetizing its users poorly. Some analyses have tied this directly to developer attrition and reduced whale support, framing the end of ultrasound money as the end of a period when $ETH had a clean, quantifiable reason to appreciate.
The deeper problem is structural and hard to argue away: a scaled, efficient Ethereum is less deflationary than a congested, expensive one. This is the tension at the center of the whole debate. The very thing that makes Ethereum better as infrastructure, cheap transactions, more capacity, activity on fast rollups, is the thing that reduces the burn. Ethereum cannot simultaneously be the cheap, high-throughput settlement layer it wants to be and the fee-burning deflationary asset the ultrasound thesis needed. Those are in direct conflict, and the roadmap chose scaling. The asset thesis was, in a real sense, sacrificed to the technology roadmap.
Then there is the value-capture question that rollups sharpen. Layer 2s use Ethereum for security and pay it a pittance for the privilege. Robinhood’s own chain is an example: analyses of corporate L2s show the base layer capturing a rounding error of the economics while providing the security that makes the whole arrangement credible. If Ethereum’s future is thousands of rollups settling to it cheaply, then Ethereum is providing enormous value and capturing little of it, and no amount of narrative reframing fixes a value-capture problem that lives in the fee structure.
The fix nobody is talking about
Which brings us to December 2025, and the upgrade that was designed, in part, to address exactly this, and that most of the market ignored.
The Fusaka upgrade activated on December 3, 2025. Its headline features were about scaling further, PeerDAS and expanded blob capacity. But buried in it was EIP-7918, the “blob base fee bound,” which is the most direct attempt yet to repair the burn. The problem Dencun created was that blob fees could collapse to near-zero, one wei, when execution costs dominated and blob demand was soft, which meant rollups consumed Ethereum’s capacity almost for free and burned almost nothing. EIP-7918 sets a floor: it ties the minimum blob fee to the execution base fee, roughly the execution base fee divided by 16, so that even in quiet periods rollups pay a meaningful minimum, and a minimum stream of $ETH gets burned.
The modeling is striking. Fidelity Digital Assets analyzed what would have happened if EIP-7918 had been active since blobs launched, and found that on 93% of days since the 2024 Dencun upgrade, the adjusted fee would have exceeded the actual fee, generating an estimated additional $78.6 million, roughly 24,641 $ETH, in cumulative blob-fee revenue. Blockworks noted that had the mechanism been introduced in June 2025, burnt blob fees would have been nearly 8x higher. The intent is explicit: restore a floor under the burn so that as stablecoins, DeFi, and tokenization migrate to rollups, $ETH still captures value from that activity instead of subsidizing it.
The honest caveat is that this is a floor, not a restoration. EIP-7918 prevents the burn from collapsing to zero; it does not recreate the thousands-of-$ETH-per-day burn of the congested mainnet era. Whether it produces measurable, sustained deflation depends on how much activity flows through blobs and how high execution base fees run, and the market is still watching. It is a serious, well-designed attempt to reconnect usage and scarcity. It is not a return to 2022.
Sound money versus ultrasound money, honestly compared
Because the entire thesis was built as a shot at Bitcoin, it is worth putting the two monetary models side by side without the tribalism, since the comparison is more interesting than either camp admits.
Bitcoin offers fixed scarcity. The supply schedule is written into the protocol, capped at 21 million coins, and halves on a predictable timetable roughly every four years. A holder knows today, with certainty, what Bitcoin’s issuance will be in 2030 and 2040. That certainty is the entire product. Bitcoin does not react to demand, does not burn, does not adjust; it simply issues on schedule toward a hard cap, and its current inflation runs around 0.8% annually, trending toward zero over decades. The trade-off Bitcoin holders accept is that the base layer offers little native utility and no yield. You hold it for the certainty, and you give up productivity in exchange.
Ethereum offered, and to a degree still offers, elastic scarcity. Supply responds to network demand: high usage burns more and can push $ETH net deflationary; low usage burns less and lets mild inflation through. The appeal was a token that becomes scarcer precisely when it is most used, tying the asset’s scarcity to the network’s success. The trade-off, which the L2 era exposed, is that elasticity cuts both ways.
A demand-responsive supply is only deflationary when demand is high on the layer that burns, and Ethereum deliberately moved demand to layers that do not burn. Bitcoin’s rigidity, often criticized as inflexible, turned out to be the thing that made its monetary promise keepable. Ethereum’s flexibility, often praised as sophisticated, turned out to be the thing that made its monetary promise conditional.
NEW: Eric Trump says $ETH is pumping hard and crypto is the future pic.twitter.com/iVQYUclLz6
— crypto.news (@cryptodotnews) July 12, 2026
The honest scorecard is that these are different products for different buyers, not better and worse versions of the same thing. Bitcoin sells certainty and asks you to forgo utility. Ethereum sells utility and asks you to accept that its scarcity depends on how that utility is used. The ultrasound-money era was the brief window when Ethereum appeared to offer both, certainty of deflation and utility of a working network, and that window closed not because Ethereum failed but because it succeeded at scaling.
A holder choosing between them in 2026 is really choosing between guaranteed scarcity with no yield and demand-driven scarcity with staking yield and network utility. Framed that way, the loss of ultrasound money is less a defeat than a clarification: Ethereum was never going to be Bitcoin, and the burn was hiding how different the two bets actually are.
What this means for holding $ETH
Strip away the narrative fight and the practical question is whether the ultrasound story mattered to the price, and the uncomfortable answer is that it is hard to tell, because $ETH has underperformed through the entire period regardless.
The clean way to see it: the ultrasound thesis was strongest right after the Merge, and it has been dismantled steadily since Dencun in March 2024. Over that same window, $ETH has been a persistent underperformer against both Bitcoin and its own former highs. Either the market was pricing the loss of the deflation narrative, or the market never cared about the narrative and $ETH’s problems lie elsewhere, in L2 value leakage, in competition from Solana, in the sheer difficulty of the modular roadmap. Both readings are defensible, and they point to different conclusions about whether fixing the burn fixes the price.
The most honest framing is that ultrasound money was a proxy for a real question that has not gone away: does Ethereum capture value from its own success? When the network was congested and expensive, the answer was visibly yes; the burn made it legible. When the network scaled and cheapened, the answer became murky, and the burn stopped telling the story. EIP-7918 is an attempt to make the answer legible again by putting a floor under value capture.
Whether it works will show up not in the marketing but in two numbers over the next year: net $ETH supply, and base-layer fee revenue. If both turn up meaningfully, the thesis has a second life. If they do not, then ultrasound money was a phase, not a property, and Ethereum’s investment case has to stand on utility alone, which is a harder, slower, less tweetable argument than the one that shrank the supply.
Frequently Asked Questions
What is Ethereum ultrasound money?
It is the thesis that Ethereum’s $ETH token would become deflationary and a superior store of value to Bitcoin. It rests on two mechanisms: EIP-1559, activated in 2021, which burns a portion of every transaction fee, and the 2022 Merge, which cut new $ETH issuance by roughly 90%. When burning exceeds issuance, total supply shrinks. The term was a play on Bitcoin’s “sound money” branding.
Is Ethereum still deflationary in 2026?
Not on a net basis, in normal conditions. After the March 2024 Dencun upgrade shifted activity to cheap layer-2 rollups, the burn collapsed, and $ETH became mildly inflationary, with net supply growth around 0.2% to 0.8% annually depending on the period. During bursts of high mainnet activity, it can still turn temporarily deflationary, but the sustained deflation of the immediate post-Merge period ended.
Why did layer 2s break the burn?
Because they moved activity off the base layer, where transactions burned meaningful $ETH, onto rollups that pay near-zero fees. The Dencun upgrade introduced cheap “blob” transactions for rollups, cutting their costs 10 to 100 times. Blob space was oversupplied, so blob fees fell close to zero, and the daily burn dropped from thousands of $ETH to as low as 50 to 70. The activity continued; the burn did not follow it.
Does this mean $ETH is a worse investment?
Not necessarily, and defenders make several counterpoints: issuance is still about 90% lower than under proof-of-work, roughly 0.2% net inflation in calm periods is actually below Bitcoin’s, nearly a third of $ETH is locked in staking and off the market, and the real case rests on demand for blockspace rather than deflation. Critics counter that base-layer fee revenue collapsed too, raising a genuine value-capture problem.
What is EIP-7918?
A change introduced in Ethereum’s December 2025 Fusaka upgrade that sets a minimum price for blob transactions, tied to the execution base fee, roughly that fee divided by 16. It prevents blob fees from collapsing to near-zero during quiet periods, ensuring a minimum stream of $ETH is burned. Fidelity modeled that it would have added roughly $78.6 million in cumulative burn across 93% of days since 2024 had it existed earlier.
Did Fusaka restore ultrasound money?
No, it put a floor under the burn rather than restoring the deflation of the post-Merge era. EIP-7918 stops the burn from collapsing to zero and improves value capture as activity migrates to rollups, but it does not recreate the thousands-of-$ETH-per-day burn of the congested mainnet period. Whether it produces sustained net deflation depends on blob activity and execution fees, and remains to be seen.
Is Ethereum still harder money than Bitcoin?
In a narrow technical sense, sometimes. In calm periods, Ethereum’s roughly 0.2% net inflation can run below Bitcoin’s roughly 0.8% fixed-schedule inflation. But Bitcoin offers predictable, protocol-guaranteed scarcity indefinitely, while Ethereum’s supply is elastic and responds to demand, so it can inflate more during quiet, scaled periods. They offer different kinds of scarcity: fixed and certain versus elastic and demand-driven.
What should I watch to know if the thesis recovers?
Two numbers over the next year: net $ETH supply growth, and Ethereum base-layer fee revenue. If EIP-7918 and rising rollup activity push net supply back toward flat or negative while base-layer revenue climbs from its roughly $10 million lows, the value-capture story recovers. If supply keeps growing and fee revenue stays depressed, ultrasound money was a temporary phase, and $ETH’s case rests on utility and demand alone.
Disclaimer:This article is for information and educational purposes only and does not constitute financial or investment advice. It describes monetary mechanics and network upgrades whose effects are uncertain and still developing. Nothing here is a recommendation to buy or sell any asset. Always do your own research. Figures on supply, burn, and inflation move continuously and are accurate as of July 17, 2026.
SBI Holdings has completed the acquisition of a majority stake in Singapore-based cryptocurrency exchange Coinhako, marking another move in the Japanese financial group’s expanding digital asset strategy across Asia.
The transaction closed on July 16 after receiving approval from the Monetary Authority of Singapore (MAS), bringing Coinhako under SBI’s corporate structure. The acquisition follows a number of digital asset initiatives by SBI, including its agreement to acquire Japan’s Bitbank and its partnership with Ondo Finance to support the tokenization of Japanese equities using its yen-backed stablecoin.
Coinhako Becomes Part of SBI’s Digital Asset Business
SBI Holdings announced that it has acquired a controlling interest in Holdbuild Pte. Ltd., the parent company of Coinhako. The transaction combined a capital injection along with the purchase of shares from existing investors, although the companies did not disclose the financial terms.
Following the completion of the deal, Coinhako officially became an SBI Holdings subsidiary. Through its entity Hako Technology, the exchange operates under a Major Payment Institution (MPI) license issued by the Monetary Authority of Singapore.
The acquisition also gives SBI access to Coinhako’s network of more than 400,000 customers, as well as its established operations and regulatory experience across Southeast Asia.
SBI Outlines Cross-Border Digital Asset Strategy
SBI Chairman and Chief Executive Officer Yoshitaka Kitao said the acquisition supports the group’s objective of connecting digital asset exchanges across multiple jurisdictions.
According to Kitao, the company plans to create a global digital asset network that allows investors to participate in markets without being limited by national borders or currency barriers. He also described Singapore as an important market because of its advanced regulatory framework for digital assets.
SBI said Coinhako will become part of its broader digital finance business, which includes its yen-backed stablecoin JPYSC. The company also plans to expand services related to tokenization, stablecoins, blockchain-based finance, and cross-border payments linking Japan with Southeast Asia.
Coinhako co-founder and Chief Executive Officer Yusho Liu said the partnership will provide the exchange with broader institutional support and access to SBI’s financial ecosystem. He added that the company intends to use those resources to continue developing digital financial services across the region.
Related: SBI Holdings to Acquire Crypto Exchange Bitbank in $288 Million Deal
Debates and disputes about Bitcoin’s governance often pivot on the rules baked into the world’s original blockchain network’s code. The latest dispute suggests the reality is more nuanced.
The alternative Bitcoin client “$DOG Mode”, introduced by Bitcoin developer “Leonidas”, doesn’t attempt to rewrite Bitcoin’s consensus rules. Instead, it targets the default relay policies used by Bitcoin Core and other node software. These are in effect the settings that determine which valid transactions are forwarded around the network before miners include them in a block.
In doing so, the developer is reopening a philosophical debate over censorship, free markets and who really governs the network.
Leonidas is an advocate of the Ordinals protocol, which allows data to be stored on the Bitcoin blockchain, often in the form of images or texts to essentially create a version of non-fungible tokens (NFTs).
The Bitcoin Improvement Proposal (BIP) 110 sought to tighten the network’s rules to make such transactions more difficult, prompting accusations of censorship from its critics.
Bitcoin consensus rule changes are rare, hence why attempts to alter them seem so seismic. In many ways, $DOG Mode represents the philosophical mirror image of BIP-110.
Uniswap management is preparing to vote on a proposal that would enable protocol fees for the first time in select Uniswap v4 liquidity pools. Separately, a proposal plans to extend the fee mechanism implemented in Uniswap v2 and v3 to Robinhood Chain.
The final on-chain voting process has begun for both proposals. Voting opens on Sunday and will continue until July 26th. Uniswap founder Hayden Adams said they expect the proposals to have a significant impact on the $UNI burning mechanism, particularly highlighting the current trading volumes on Robinhood Chain.
The Uniswap v4 proposal calls for enabling protocol fees in fixed-fee pools, pools created through perpetual swap auctions, and pools using aggregator hooks. The regulation will cover Ethereum, Arbitrum, Base, BNB Chain, Polygon, Optimism, and Robinhood Chain networks.
According to the proposal text, a second vote will be held later for the remaining five networks. This is because Uniswap’s GovernorBravo governance agreement allows a maximum of 10 on-chain transactions in a single offer.
A separate Robinhood Chain proposal by Hayden Adams aims to enable fees on Uniswap v2 and v3 pools on the network. All three protocol versions of Uniswap were made available with Robinhood Chain’s mainnet launch on July 1st.
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According to data included in the proposal, the total exchange volume of Uniswap applications on Robinhood Chain exceeded $6 billion as of July 10th. The Ethereum Layer 2 network, developed with Arbitrum infrastructure, recorded approximately $3.1 billion in decentralized exchange volume in its first week. It was noted that memecoins were predominantly traded in the initial transactions.
The protocol fees collected under both proposals will be transferred to the $UNI combustion mechanism, which was established by the UNIfication governance regulation approved with 99.9% support in December.
With this governance change, protocol fees were enabled in the Uniswap v2 and v3 pools on the Ethereum mainnet, and 100 million $UNI were burned in the Uniswap treasury. However, the implementation of v4 fees was postponed to a later proposal pending the completion of the necessary technical infrastructure.
The fee mechanism has reportedly been expanded to 11 different networks to date. According to the Uniswap v4 proposal, the protocol set a daily record last month by burning 186,000 $UNI in a single day.
Enabling fees in Uniswap v4 requires a more complex infrastructure compared to previous versions. While v2 and v3 used fixed fee tiers, v4’s hook architecture allows pools to change their fees from block to block.
The new proposal creates a management-controlled system that categorizes pools under specific “families” and calculates the fee for each pool according to predefined rules, rather than setting the fee individually.
Both proposals utilize the accelerated governance process adopted under UNification. This process skips the request for comments phase and proceeds directly to on-chain voting after a five-day Snapshot voting period.
Evidence of that shift is growing. Visa’s stablecoin tracker recorded $6.6 billion in volume across 132.4 million retail-sized transactions (those worth less than $250) during the latest 30-day period. Standard Chartered expects stablecoin circulation to increase about sevenfold to roughly $2 trillion by 2028, while agent-led purchases could rise from 1% of e-commerce in 2025 to 12% in 2029. Neobanks capture nearly 40% of new banking accounts globally, boasting over 1.4 billion users.
A step further
Naveen Mallela, Standard Chartered’s global head of payments, also expects the traditional account-based model to change. He believes people will eventually use a wallet tied to their identity instead of separate bank and brokerage accounts.
“Rather than having bank accounts with individual banks or having separate brokerage accounts, you would have a wallet where you’ll have cash, tokenized deposits of some sort issued by different banks, stablecoins, tokenized money market funds, crypto and funds, all of that in one app, one wallet,” he said, clarifying that this was his personal opinion, not a formal Standard Chartered position.
His forecast does not remove banks from the system. The wallet he described could hold deposits and tokens issued by several banks, which would continue providing much of the money, infrastructure and controls behind the services.
On the eve of the $GENIUS Act’s first anniversary, the stablecoin market holds about $310 billion, including roughly $184 billion in $USDT and $73 billion in $USDC.
President Donald Trump signed the law on July 18, 2025, creating a federal framework with one-for-one liquid reserves, redemption rights, and monthly reserve disclosures for a market that moved faster than the rulebook.
Federal Reserve researchers measured stablecoin capitalization at $317 billion on Apr. 6, up more than 50% from early 2025, and recorded a 50% increase in Ethereum stablecoin transaction volume since enactment. As of July 17, core implementation measures are still in proposal form.
Kyle Sonlin, president and co-founder of Global Settlement Network, said his conversations with governments and institutions now start from acceptance of stablecoins as financial infrastructure, and his team spends “far less time explaining why stablecoins matter.”
Permission reached the sales desk
Sonlin described $GENIUS as a credible federal direction that let banks, payment companies, and infrastructure providers commit money to longer-term plans.
He said that financial infrastructure rarely reorganizes within 12 months, and companies kept preparing for a regulated stablecoin market as agencies worked through implementation.
Triple-A CEO Eric Barbier sees the commercial result inside the enterprise sales funnel. His payment company has recorded more businesses moving from evaluation toward implementation, plus a “marked reduction” in sales cycles for enterprise customers that enable stablecoin payments through its platform.
Barbier’s evidence covers Triple-A’s own pipeline, providing the legitimacy thesis with a concrete operational measure.
Visa’s expansion offers a larger institutional reference point, as its stablecoin settlement pilot supported nine blockchains by April and reached a $7 billion annualized settlement run rate, up 50% from the previous quarter.
On July 16, Visa introduced an enterprise platform that provides financial institutions and fintech firms with access to stablecoin storage, redemption, minting, and burning through a single Visa-managed environment.
The sales environment now has a recognized product, a federal direction, and payment incumbents building access layers.
Deployment depends on banks, custody arrangements, reserve operations, and compliance teams that interpret unfinished rules for each relationship.
Banking friction survives
Diogo Cassinelli, sales and partnerships manager at Trace Finance, said that clarity on issuance addressed half of the operating problem.
Cross-border payment companies still need each banking partner to make an independent compliance judgment about how stablecoins enter accounts, leave accounts and settle across jurisdictions.
Cassinelli said those reviews add “months to timelines that should take weeks,” and the cost repeats whenever an operator enters a new country or adds another bank.
Stablecoin providers can close a customer faster under $GENIUS, then spend longer connecting that customer to the banks and payment providers that move the money.
The $GENIUS Act shortened customer sales cycles as bank-by-bank compliance, custody and settlement reviews continued to slow stablecoin integration.
Enterprise buyers now understand the use case and accept the federal direction. Banking partners still need a shared legal and supervisory standard that lets compliance teams approve the same activity consistently.
Edwin Mata, CEO and co-founder of Brickken, placed that plumbing inside a larger capital-markets architecture.
Regulated dollars can provide the cash leg for tokenized securities, private credit, investment funds, and asset servicing. The US opportunity extends from payment acceptance into issuance, distribution, and settlement across on-chain financial products.
Regulatory access sets the field
Alex Witt, general partner at Verda Ventures, gave the first-year verdict a harder edge. He credited $GENIUS with legitimizing the sector and drawing institutional firms into the federal perimeter.
Witt also argued that charter decisions and product launches can give selected firms an early advantage before regulators complete the operating rules.
The Office of the Comptroller of the Currency conditionally approved national trust bank applications or conversions involving Ripple, Fidelity Digital Assets, BitGo, Paxos, and First National Digital Currency Bank in December 2025.
Tether launched USA₮ in January 2026, with Anchorage Digital Bank as the issuer and Cantor Fitzgerald as the reserve custodian and preferred primary dealer.
Those moves show companies building toward $GENIUS before its effective date. They also concentrate early access among firms that already have capital, legal teams, banking partners, and federal relationships.
Startups face the same unfinished framework with fewer resources to absorb repeated compliance reviews.
The OCC opened its broad implementation proposal in February, and Federal agencies published an interagency customer-identification proposal in June. Public comments stay open through Aug. 21, more than a month beyond the anniversary deadline Congress set for regulations.
The January test
The Senate Banking Committee advanced the CLARITY Act 15-9 on May 14, leaving the bill short of a floor vote.
In the bull case, final $GENIUS rules and further CLARITY progress give banks a common compliance reference, contract integration timelines, and turn regulated stablecoins into routine settlement assets for payments and tokenized markets.
The bear case gives early access durable value, as conditional charter approvals, incumbent payment networks, and established banking partnerships let a small group define distribution before smaller firms can comply at comparable speed.
$GENIUS then legitimizes the category and channels much of its commercial value toward companies that entered the federal perimeter first.
The statute takes effect on the earlier of Jan. 18, 2027, or 120 days from the date federal regulators issue final implementing regulations.
The first year lowered the cost of persuasion, and the six months through Jan. 18 will show whether federal rules can lower the cost of connection too.
As Ripple continues to emerge as one of the top names in the crypto industry, its President, Monica Long, has also made the list of the top leaders in the stablecoin market this year, curated by Stablecon.
Following the recent release of its annual leadership recognition list, Stablecon has named Monica Long among the honorees on Stablecon’s Most Influential 2026 list.
Monica Long as a Top Woman in Stablecoins
Following Long’s addition to Stablecon’s Most Influential list this year, the Ripple president has earned recognition in two categories, which include Issuer & Protocol Leaders and Top Women in Stablecoins.
The list is curated every year to recognize leaders across multiple crypto sectors such as stablecoin issuance, blockchain infrastructure, investing, regulation, and ecosystem development.
Stablecon explained that honorees who make it to the list are evaluated based on five criteria, which include ecosystem influence, impact and reach, innovation, momentum, and peer recognition.
Notably, Monica Long was listed alongside executives from several major stablecoin and digital asset firms, including Paxos, Ondo Finance, Frax Finance, Custodia Bank, Anchorage Digital, and Monerium in the Issuer & Protocol Leaders category.
Also, Long made the list in the Top Women in Stablecoins category, being one of only two Ripple-associated executives celebrated as female leaders making major contributions to the stablecoin industry.
$RLUSD in spotlight as Ripple pushes for wider adoption
It is not surprising that Monica Long has been recognized as a top leader in the stablecoin sector, as Ripple continues to advance its native stablecoin, $RLUSD, while expanding its use cases.
Apparently, Monica Long’s recognition as a Top Woman in Stablecoins comes following Ripple’s consistent developments targeted at expanding its presence in the stablecoin market through $RLUSD.
As Ripple’s president, Long has played a key role in bringing $RLUSD to the global market and driving its adoption for real-world payments and financial applications.
On-chain analytics company CryptoQuant stated that Strategy’s recently announced new capital management framework significantly alleviates the company’s immediate liquidity concerns, but a more disciplined model for Bitcoin buying and selling is needed.
In a report he published, CryptoQuant Research Director Julio Moreno assessed Strategy’s new plan, called the “Digital Credit Capital Framework,” as a significant shift in direction.
Moreno stated, “The Digital Credit Capital Framework is a real course correction. However, for this change to be complete, Strategy needs to clarify two more issues: a systematic model for timing Bitcoin purchases and a disciplined framework for selling during bullish periods.”
Strategy announced its five-part digital credit capital management framework on June 29. As part of the plan, the company created a US dollar reserve that can only be used for preferred stock dividends and interest payments.
The company has set a coverage target to meet at least 12 months of payment obligations for this reserve. Additionally, the dividend rate for STRC preferred shares has been increased to 12%, subject to monthly review. This step aims to bring the STRC price closer to its nominal value of $100.
The new framework also allows for the repurchase of up to $1 billion worth of preferred shares if company management deems the repurchase to be a value-enhancing activity. STRC shares are planned to be given first priority under this program.
Strategy will also be able to repurchase up to $1 billion worth of common shares of MSTR during periods when it believes the company’s shares are undervalued.
A separate Bitcoin cash-out program created as part of the plan authorizes the company to sell up to $1.25 billion worth of Bitcoin. The funds raised can be used to strengthen dollar reserves, finance dividend and interest payments, and fund share buybacks.
The company also announced that it will issue shares more cautiously when its mNAV indicator, known as the market value/net asset value ratio, approaches the 1 level.
Strategy’s new plan was announced just days after CryptoQuant released its recommendations for the company.
CryptoQuant had previously urged Strategy to pause Bitcoin purchases until its cash reserves and dividend coverage ratio were strengthened. The company also suggested developing a systematic model for timing future Bitcoin purchases and preparing a plan for selling a portion of its assets during bull markets.
According to Moreno, Strategy has largely followed the first of these recommendations.
Between June 29 and July 5, the company sold approximately 3,588 Bitcoin, generating around $216 million in revenue. These funds were used to pay preferred stock dividends and strengthen the dollar reserve.
Strategy raised $466.7 million from the sale of MSTR shares between July 6 and 12. The company did not make any new Bitcoin purchases or sales during this period.
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Following these steps, Strategy’s dollar reserves increased from $1.44 billion to $3 billion. The company’s dividend coverage period also extended from approximately 14 months to 29 months.
Strategy’s Bitcoin holdings remained unchanged at 843,775 BTC, and the company has yet to conduct any preferred or common share buybacks.
STRC shares had fallen to a historical low of around $75 at the end of June. Following the announcement of the new framework and the increase in the dividend rate, the share price rose to approximately $88.
Despite this, STRC continues to trade below its nominal value of $100.
Moreno said the discount indicated that investors wanted to see Strategy sustainably implement its new financial discipline.
Moreno said, “The sustained discount indicates that the market wants to see the reserve strengthened and the new discipline maintained before fully repricing the security.”
According to CryptoQuant, two key questions remain unanswered in Strategy’s Bitcoin strategy.
The first is when the company will resume Bitcoin purchases.
Moreno stated that pausing Bitcoin purchases offered a solution to the short-term liquidity problem, but the new framework lacked a model-based rule for when accumulation should resume.
Strategy’s announced equity issuance policy, which it will implement when its mNAV ratio approaches 1, defines how the company will raise capital. However, according to Moreno, this rule does not explain when capital should be invested in Bitcoin.
Moreno stated, “Without a clear and valuation-focused model, the company risks repeating its tendency to buy Bitcoin at consistently local peaks whenever market conditions improve.”
The second point CryptoQuant highlights is whether Strategy will sell Bitcoin in the next bull market and under what rules those sales will be conducted.
Moreno stated that the current Bitcoin cash-out program has a defensive structure. The program allows Bitcoin sales to be used to finance dividends, interest, and share buybacks.
However, according to CryptoQuant, this plan does not offer a strategy for staggered selling or hedging positions as the market cycle approaches its peak.
Moreno said that such a sales framework could help the company reduce its debt, create value for shareholders, and build up cash reserves to repurchase Bitcoin during periods when the price falls to lower levels.
Moreno stated, “The disciplined selling approach throughout the market cycle, which constitutes the other half of active capital management, is still not defined.”
