Crypto Long & Short: Protecting the people building DeFi infrastructure

This CoinDesk newsletter mixes market commentary with institutional and technical themes. Bitcoin (BTCUSD) is in rally mode, testing $78k resistance and briefly topping ~$79k as short-squeeze risks and ETF momentum build. Ethereum and its Layer‑2 ecosystem face structural challenges: critics argue rollups fragment liquidity and expose custodial chokepoints, shifting attention to state‑channel designs and prompting forecasts that many L2s may not survive 2026. The piece highlights major DeFi stress events — notably the $292 million Kelp DAO/rsETH exploit — which knocked Aave’s TVL market share from ~51.5% to ~39% and left the AAVE token roughly 50% below its January peak. Institutional moves (Deutsche Börse’s $200m stake in Kraken; Legal & General tokenizing $68bn) and regulatory shifts (CFTC framework for perpetual futures) underscore growing mainstream adoption alongside persistent security and liquidity‑fragmentation risks.