On May 25, Babylon Labs submitted a Temperature Check to Aave DAO proposing Trustless Bitcoin Vaults that would let users post native BTC on Aave V4 without bridges, wrappers, or custodians. The plan adds two Ethereum Mainnet Spokes to enable borrowing against BTC and to settle liquidations by swapping seized BTC into WBTC. Babylon Labs says the next steps could include ARFC review and later an onchain AIP vote if the snapshot sentiment is favorable.

On May 25, bitcoin rose to an intraday high of $77,831 and later hovered around $77,500, posting 24-hour gains of 1.2% and a market capitalization of about $1.55 trillion. The move followed renewed risk appetite tied to optimism around Middle East peace talks, while oil prices fell sharply over the weekend. Bitunix analysts cautioned that expectations for a potential Federal Reserve rate hike as early as October could weigh on high-leverage assets.

Bitcoin has been unable to reclaim $78,000, grinding sideways as it trades below the May highs near $82,000. A CryptoOnchain study combining US spot Bitcoin ETF flows with Binance on-chain metrics points to net ETF outflows above $1.74 billion over the past two weeks alongside sharply weaker US institutional demand indicators. The report argues spot supply is rising on exchanges while leveraged retail positioning remains elevated, increasing downside risk if support levels fail.

A pseudonymous filer using the name "Noah Doe" has brought a New York lawsuit seeking ownership of 39,069 inactive Bitcoin wallet addresses, including ones associated with Satoshi Nakamoto and the Mt. Gox hacker. The complaint describes roughly 3.7 million BTC—about $290 billion at current prices—and analysts argue the request is effectively unenforceable without the private keys.

Bitcoin rebounded toward $78,000 on Monday after commentators linked the bounce to easing U.S.-Iran tensions and broader "risk-on" sentiment. Several traders said BTC may need to reclaim the low-$80,000 area to extend a rally, while others warned a peace-deal headline could still trigger a brief drop back toward $74,000 before any sustained move higher.

Economist and market analyst Henrik Zeberg said Bitcoin could stage a temporary rebound but still be setting up for a steep downturn, framing the move as a "B-wave" bounce inside a larger bearish structure. In a May 25 X post, he argued sentiment may flip strongly bullish during the rally before a sharp reversal, while pointing to downside areas such as $41,492 after a retrace toward the 0.618 Fibonacci level near $66,426.

On May 25, 2026, the S&P 500 reached a record 7,534 while Brent crude fell back below $100 per barrel amid optimism around a possible U.S.-Iran framework tied to reopening the Strait of Hormuz. The move renewed discussion over whether Bitcoin could track a risk-on equity surge, even as spot BTC ETF flows had not yet flipped positive after a weak week.

BlackRock's iShares Bitcoin Trust (IBIT) saw Bitcoin sold across five consecutive sessions last week, totaling $1.01 billion. The flow reflects ETF investor redemptions that mechanically prompt fund-level BTC sales, rather than necessarily signaling a change in BlackRock's view. Despite that pressure, Bitcoin remained above $76,000, raising questions about who provided the offsetting demand.