Ethereum (ETH) faces a critical inflection point with two powerful catalysts converging on Wednesday, May 7.
Traders are split on whether the “perfect storm” could spark a breakout or deepen recent price volatility amid mixed macro signals and waning confidence in Ethereum’s narrative.
Ethereum Faces Volatile Crossroads: Pectra Upgrade and FOMC Converge
The long-awaited Ethereum Pectra upgrade is only hours out. It is expected to introduce key enhancements such as EIP-7702 and a 2,048 ETH staking cap, improving Ethereum’s usability and efficiency.
Combined with Fed Chair Jerome Powell’s potentially dovish tone, some believe this week could ignite a powerful rally in ETH and altcoins.
“May 7th Ethereum Pectra upgrade. May 7th FOMC. Micro caps already surging. If the Crypto Lords are on our side, mother of all breakouts could happen—especially on altcoins,” said CryptoSkull on X (Twitter).
Others echoed the sentiment, albeit with caution, cognizant of the volatility of the crypto market.
“FOMC week and ETH Pectra update? Time to keep our eyes peeled. Bullish vibes are great, but let us not forget the market’s mood swings. Feds might just throw us a curveball,” another user warned.
Meanwhile, another cohort sees the collision between Pectra Upgrade and the FOMC meeting as a high-stakes convergence. Specifically, the convergence of the two events will likely trigger a reaction in the Ethereum price.
Ethereum Community Borders Along Hope, Hype, and Hard Lessons
Still, not all see the Pectra upgrade as an immediate price catalyst. Maria Magenes, VP of Strategy at Hype Partners and former Balancer and MakerDAO marketing lead, tempered expectations.
“Even if I’ve joked about my hope for a price bump, that’s not the real point of why this is exciting… Network upgrades don’t imply price bumps… These aren’t cosmetic changes…They ensure Ethereum remains the most composable, decentralized, and reliable network in the ecosystem,” she explained.
Ethereum price action against event-specific volatility. Source: Maria on X
Meanwhile, others shared a nuanced take, calling Pectra a legit volatility trigger. Beyond the technical upgrade, however, Ethereum is also contending with a broader narrative crisis.
Nevertheless, the May 7 FOMC decision adds significant uncertainty. While most analysts expect the Fed to hold rates steady, traders remain wary of Powell’s tone. A hawkish stance could derail risk-on momentum.
“We’re still seeing the risk-off mentality going into the Fed meeting…Bitcoin build-up is good…expecting ETH to turn upwards after Wednesday,” analyst Michaël van de Poppe wrote.
May 7 could shape Ethereum’s near-term fate, with the second-largest crypto by market capitalization metrics caught between protocol progress and macro peril.
On Wednesday, whether Pectra powers a rally or is drowned out by macroeconomic headwinds will be determined.
The decentralized finance (DeFi) sector faced another major setback this weekend as two protocols, Loopscale and Term Finance, suffered exploits totaling over $7 million in losses.
These incidents have fueled growing concerns about the vulnerabilities of DeFi platforms in 2025.
Loopscale Loses $5.8 Million in Major Exploit
On April 26, Solana-based Loopscale reported a significant security breach impacting its USDC and SOL vaults.
The exploit drained around $5.8 million, representing roughly 12% of the platform’s total value. Notably, this attack came just two weeks after Loopscale’s official launch.
Loopscale’s co-founder, Mary Gooneratne, confirmed that an attacker exploited the system by securing under-collateralized loans.
Investigations revealed that the root cause stemmed from an isolated issue in the platform’s RateX-based collateral pricing system.
However, Loopscale clarified that RateX itself was not compromised.
“The root cause of the exploit has been identified as an isolated issue with Loopscale’s pricing of RateX-based collateral. There is no issue with RateX itself related to this. Loss of funds explicitly affects depositors to SOL and USDC Genesis vaults,” Loopscale stated.
Following the breach, Loopscale temporarily halted all markets to assess the damage.
The platform has since resumed partial operations, enabling key functions like loan repayments, top-ups, and loop closures, while vault withdrawals remain restricted.
The platform requested the return of 90% of the stolen assets and warned of legal action if the attacker did not respond by April 28.
“We agree to allow you to retain a bounty of 10% of the funds (3,947 SOL) and release you from any and all liability regarding the attack,” Loopscale added.
Loopscale is currently working with security firms and law enforcement agencies to manage the situation.
Term Finance Suffers $1.5 Million Liquidation Loss
Meanwhile, Ethereum-based Term Finance, a pioneer in scalable fixed-rate lending, also reported a security incident on April 26.
Blockchain security firm TenArmorAlert identified two suspicious transactions linked to Term Labs, resulting in losses of about $1.5 million.
“It appears that something is wrong with the liquidation. Someone spent a very small amount of ETH to liquidate over 586 Treehouse collateral,” TenArmorAlert stated.
Term Finance later confirmed that a faulty update to its tETH oracle caused the problem. Fortunately, no smart contracts were exploited, and the issue was contained within the tETH markets.
The platform assured users that all other funds remain secure and has committed to a full reimbursement plan for those affected.
These attacks contribute to a worrying trend in 2025, with crypto projects losing close to $2 billion this year.
Since US President Donald Trump assumed office, the Securities and Exchange Commission (SEC) has dropped, settled, or paused lawsuits against prominent crypto entities left and right. In stark contrast to the previous administration’s leadership under Chair Gary Gensler, the SEC seems to be parting from its previous crackdown on digital assets.
In an interview with BeInCrypto, Nick Puckrin, Founder of The Coin Bureau, and Hank Huang, Chief Executive Officer at Kronos Research, highlighted the substantial election influence the crypto industry had over Trump’s candidacy as a contributing factor to the SEC’s looser stance on crypto.
The SEC’s Approach Under Trump
The SEC has experienced a clear shift in its approach to crypto lawsuits under Trump’s presidency. Its move away from the aggressive enforcement tactics of its previous leadership has largely characterized this shift.
“When President Donald Trump won the US election, the crypto industry rejoiced. Finally, the ‘regulation by enforcement’ era, which the SEC under the leadership of Gary Gensler was so famous for, was about to come to an end. And the new administration didn’t disappoint. Within just a couple of weeks of Trump’s inauguration, the revamped SEC started dropping lawsuits against crypto firms left, right and center,” Puckrin said.
Two weeks ago, the SEC officially dropped its appeal and XRP lawsuit against Ripple Labs, ending a five-year legal battle. The Commission had originally accused Ripple of conducting an unregistered securities offering worth $1.3 billion through XRP sales.
“After more than four years in limbo, the SEC has officially decided that XRP is not a security (though what it is instead remains to be seen). This case has been weighing heavily on XRP – the fourth largest cryptocurrency with a market cap of roughly $130 billion– so its resolution is a major win,” Puckrin added.
The wider crypto community celebrated the outcome, with many arguing that it will set a precedent for how digital assets are classified in the US. This prediction is warranted, given that the SEC has been on a lawsuit-dropping spree.
The SEC has also dropped several ongoing investigations against OpenSea, Robinhood, Uniswap Labs, Kraken, and Gemini. It has also asked a federal court to issue a 60-day pause over its litigation against Binance. Meanwhile, the Commission settled its investigation into ConsenSys over its Ethereum software products.
These lawsuits surfaced in parallel to a series of crypto-friendly measures meant to foster greater innovation and curb potential regulatory suffocation that had existed during the Biden era.
Will New Leadership Define Clear Crypto Regulations?
A day after Trump assumed office, SEC Acting Chairman Mark Uyeda announced the creation of a dedicated crypto task force led by Commissioner Hester Peirce. The task force was reportedly designed to resolve long-standing ambiguities in the regulatory treatment of digital assets.
In all SEC crypto lawsuits, Commissioner Uyeda has implemented a strategy prioritizing industry engagement to develop regulatory frameworks that balance innovation and investor protection.
Meanwhile, Trump strategically nominated Paul Atkins, a crypto-curious, regulation-light candidate, to replace Gensler as head of the SEC. Just this week, the Senate Banking Committee voted to advance Atkins’ nomination to the full Senate.
Now, only a stone’s throw away from becoming SEC Chair, Atkins is expected to loosen regulatory oversight on crypto.
“With the establishment of a new Task Force and key appointees like Paul Atkins fostering innovation, Trump’s strategic move to create a Bitcoin reserve within the government further underscores his commitment to supporting the industry. The future of crypto regulations will be focused on less oversight and the beginning of a delicate but promising thaw in the regulatory landscape,” Huang added.
Though some say Trump’s handling of crypto affairs has resulted in a never-before-seen triumph, others are weary that his increasing involvement in the industry has turned out to be a recipe for disaster.
The Impact of Crypto Donations on Regulations
Several industry leaders went to great lengths to ensure that Trump became America’s 47th president. Millions of dollars in donations from crypto firms throughout Trump’s campaign illustrated these efforts.
According to a Public Citizen report, over $119 million from crypto corporations went into influencing the 2024 federal elections, largely through Fairshake, a non-partisan super PAC backing pro-crypto candidates and opposing skeptics.
Crypto corporations donated over $119 million to the 2024 federal elections. Source: Public Citizen
Coinbase and Ripple, among others who stand to profit, directly provided over half of Fairshake’s funding. The remaining funds mostly came from billionaire crypto executives and venture capitalists. Notable contributions included $44 million from the founders of Andreessen Horowitz, $5 million from the Winklevoss twins, and $1 million from Coinbase CEO Brian Armstrong.
So far, big crypto’s spending strategy is paying off with a more favorable environment.
Without a clear framework to guide the crypto industry following these dropped lawsuits, this lax approach risks being short-lived. Ultimately, this could tarnish long-term crypto adoption.
“Somehow, all these victories feel somewhat hollow after the reputation of the crypto industry has been tarnished by the billions of dollars in combined losses from meme coin scams. Meanwhile, Hayden Davis, the mastermind behind LIBRA, continues to launch fraudulent meme tokens, despite being on the Interpol wanted list,” he said.
A 2024 report by Web3 intelligence platform Merkle Science revealed that meme coin rug pulls cost investors over $500 million. The February LIBRA incident showed how this trend was carried over to 2025. Nansen data revealed that 86% of investors lost $251 million, while insiders pocketed $180 million in profits.
Though crypto scammers may be charged with related crimes like wire fraud or money laundering, rug pulling is legal. Better said, it’s unaccounted for. No regulation holds crypto insiders responsible for meme coin scams.
“As crypto becomes an ever more mainstream asset class, consumers need to be protected against those who choose to use it for nefarious purposes. One way to do this is through education, and that’s our job as an industry. But deterring scams and extractive behavior is the job of the regulators. And it’s time they stepped up to the task,” Puckrin told BeInCrypto.
If the SEC doesn’t take advantage of this opportunity to curb the consequences that meme coin scams can produce, it will result in an enormous setback for the industry.
Comprehensive Regulation Beyond Dropped Lawsuits
Puckrin illustrated the need for heightened regulatory clarity in crypto by drawing attention to the way the SEC penalizes insider trading in the context of traditional investing.
“In traditional investing, insider trading is a serious crime. In the US, it’s punishable by fines of up to $5 million for individuals and prison sentences up to 20 years. Similarly, federal penalties for engaging with illegal gambling activities include up to five years in prison. Perpetrators of memecoin scams must be punished with the same level of severity, because the result is the same: manipulating markets and cheating unsuspecting investors out of their savings,” he said.
Puckrin clarified, however, that the issue isn’t solely about penalizing fraudsters. Just as the SEC’s past overregulation hindered the industry, the current lack of meme coin rules creates an environment where new scams and exploitative schemes can easily flourish.
“Yes, the removal of lawsuits is great news for blockchain innovation, but something needs to replace it. Indeed, serious cryptocurrency firms have never advocated for an unregulated Wild West. What they want is clarity and rules that are fit for the nascent blockchain industry – not just a copy-and-paste of existing financial regulations that simply don’t work for crypto,” he said.
Although the Trump administration has only been in place for four months, the clock is ticking, and meaningful change takes time.
Unanswered Questions Loom
Puckrin expressed concern over the current administration’s prioritization of lawsuit dismissals instead of working faster to implement transcendental crypto regulation.
“My concern is that regulators will keep kicking the can down the road with crypto regulation, having gained the approval of the industry for dropping the many lawsuits that were stifling its growth. And this is incredibly dangerous,” he told BeInCrypto.
Meanwhile, critical questions that only the SEC can define remain unanswered.
“What are memecoins and who will ensure another LIBRA fiasco doesn’t happen? Are utility altcoins now commodities and if so, will the Commodities Futures Trading Commission (CFTC) regulate them? And, importantly, what do we do about compensating investors who have lost billions to crypto fraud?” Puckrin concluded.
The SEC’s current direction promises a regulated renaissance or a breeding ground for future crises.
With billions lost and critical questions unanswered, the future of crypto hinges on whether the regulatory body will translate its recent shift into a lasting framework that fosters innovation without sacrificing investor protection.
Back in 2008, Facebook changed the gaming industry overnight. Games like FarmVille and Mafia Wars went from zero to millions of players thanks to frictionless distribution, viral mechanics, and built-in social hooks.
But the window closed quickly, and only a few saw it coming. Today, we’re at a similar inflection point. The platform this time? Telegram.
With nearly 1 billion monthly active users, Telegram is one of the world’s largest messaging platforms, and one of the most underestimated in terms of what it’s becoming.
While known for its privacy-focused features, Telegram is becoming more powerful. It is crypto-native at the infrastructure level and is integrated directly with the TON blockchain.
This integration means Telegram comes pre-equipped with a full-featured, yield-bearing wallet. For millions of users, especially outside the United States, Telegram Wallet already functions much like a bank account. It’s used to store assets, make purchases, and earn passive rewards.
This embedded financial layer opens new possibilities for developers, especially in web3 gaming.
Instead of relying on third-party wallets like MetaMask or explaining complex onboarding flows, developers can launch experiences directly into an ecosystem where users are already transacting with crypto.
At GOAT Gaming, we’ve seen this impact firsthand. Players who spend using TON, Telegram’s on-chain wallet, spend four to ten times more than those who transact through Stars, Telegram’s fiat-linked in-app currency.
These users aren’t just more comfortable with crypto. They’re more committed, more active, and more valuable.
How Telegram Turned Digital Gifts Into Real NFT Volume
Telegram’s transformation accelerated earlier this year with the launch of collectible gifts. These limited-edition digital items can be sent, upgraded, and now traded within a native marketplace. Introduced in January, many of the first collections sold out in minutes.
Creators also gain access to new features through community boosts and audience engagement. Upgraded gifts can be minted and traded as NFTs, allowing users to hold them as assets and participate in secondary markets without leaving the app.
The traction is already visible. As of June 9, 2025, Telegram Collectibles recorded $9.7 million in weekly NFT trading volume, according to a Dune dashboard tracking TON-based assets.
By comparison, Ethereum NFTs saw $3.6 million in volume over the same period. The pace of adoption mirrors the early days of the 2021 NFT boom, but with one key distinction.
There are no wallets to install, no dApps to navigate, and no bridges to cross.
Why We Believe Telegram Collectibles Will Replace Traditional User Acquisition
At GOAT Gaming, we’ve seen firsthand that Telegram Collectibles are far more than aesthetic add-ons. They’re becoming a foundation for community-driven marketing, referral loops, wallet onboarding, and player reactivation.
These collectibles create both emotional and economic hooks. When a gift carries real value, users are more likely to engage.
This shift points to something bigger: a move away from performance marketing toward gameplay that drives acquisition and retention on its own.
Collectibles do the heavy lifting, building connections, signaling status, and encouraging spending behavior in ways ads rarely achieve.
Together, these elements create a seamless environment for digital commerce, social interaction, and ownership. They also make Telegram an increasingly viable platform for Web3 gaming to scale.
Game studios like GOAT Gaming are already experimenting with gifting mechanics that drive referral loops, reactivations, and real-time campaigns.
In one recent example, we launched a Telegram-native raffle that offered gift rewards tied to gameplay actions.
Within two weeks, the campaign had onboarded hundreds of thousands of players, driven tens of thousands of completed wallet connections, and created what would have cost hundreds of thousands in user acquisition spend through traditional channels.
This shift toward community-gated gameplay is already unfolding. We’re building new experiences that treat collectibles not as cosmetic profile flexes but as core infrastructure.
What Telegram Collectibles Are Really Unlocking for Game Developers
In our upcoming game, Underground Pepe, we’re giving real utility, from unlocking progression rewards to enabling gameplay features and signaling in-game status.
Players join Pepe as he builds a chaotic underground empire, scheming, and stacking NFTs and Telegram Collectibles.
They earn by operating their rug factory, reinvesting into more collectibles, and unlocking new gameplay loops that mirror Telegram’s trading, gifting, and meme-driven energy.
Ultimately, we believe Telegram has already laid the groundwork for what Web3 infrastructure should look like.
For developers paying attention, Telegram already offers the infrastructure, reach, and engagement that most platforms are still trying to build. Ignore it, and you’ll miss Web3 gaming’s biggest player acquisition funnel in years.
