Bitcoin staking protocol Babylon saw $1.26 billion in BTC unstaked from its platform, reducing the protocol’s total value locked by 32%. 

On April 17, blockchain analytics firm Lookonchain flagged several addresses that had unstaked a total of 14,929 Bitcoin (BTC) from the staking platform. The security firm flagged four addresses that had unstaked 299 BTC, 499 BTC, 1,000 BTC and 13,129 BTC. 

One address held a majority of the unstaked assets worth $1.1 billion. With BTC prices hovering at around $84,400, the total unstaked BTC was worth about $1.26 billion.

The unstaking event saw Babylon’s total value locked (TVL) drop by 32%. According to data tracker DefiLlama, Babylon’s TVL declined from $3.97 billion to $2.68 billion after the unstaking.

Unstaked Bitcoin may be “staked back” to Babylon 

Community members are speculating on who was behind the unstaking. One X user suspected that the Bitcoin may belong to the Chinese government, while another said the move may simply be a rotation, risk-off, or a trader getting liquid.

While it’s unclear who’s behind the four addresses cited by Lookonchain, the fund movements could be related to a transition initiated by the decentralized finance (DeFi) protocol Lombard Finance. 

At the time of the unstaking, Babylon Labs retweeted an announcement from Lombard, saying it was unstaking Bitcoin as part of a transition to a new set of finality providers. 

Lombard Finance said it timed the unstaking with the end of Babylon’s phase 1 cap 1 on April 24 so users would not miss out on rewards. The protocol said it would stake the assets back.

“All of this BTC will be staked back into Babylon as soon as the unbonding is complete,” Lombard Finance wrote. 

Cointelegraph reached out to Babylon Labs for comments but did not get a response by publication.

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Bitcoin unstaking follows BABY airdrop

The massive unstaking event follows a Babylon airdrop for early adopters. On April 3, Babylon announced the details of its early adopters airdrop program. The airdrop was allocated for its Phase 1 stakers, non-fungible token (NFT) holders and developers. The protocol allocated 600 million BABY tokens for the airdrop event. 

Following the airdrop, $21 million in BTC was unstaked from the protocol. Bitlayer co-founder Kevin He previously told Cointelegraph that this was a common short-term market behavior representing early redemption.  

Babylon is one of the largest Bitcoin DeFi players in the space, with a TVL reaching over $6 billion in December. Babylon co-founder Fisher Yu previously told Cointelegraph that the platform allows staking to be a native use case for Bitcoin, eliminating the need to trust another party while staking. 

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A Bitcoin Policy Institute (BPI) executive floated a $1 million Bitcoin price scenario if the United States were to buy 1 million BTC. 

In a Bitcoin Magazine podcast, Zach Shapiro, the head of policy for the Bitcoin-focused BPI think tank, said that a 1 million Bitcoin (BTC) purchase by the US would have a massive impact on the price of the asset. 

“If the United States announces that we are buying a million Bitcoin, that’s just a global seismic shock. […] I think first, Bitcoin price goes through the roof,” Shapiro said. “I think we’d probably go very quickly to something like a million dollars per Bitcoin.”   

The discussion followed US President Donald Trump’s March 7 executive order establishing a Strategic Bitcoin Reserve and a Digital Asset Stockpile.

A “Bitcoin superpower” should hold more Bitcoin 

BPI executive director Matthew Pines said that other nations are watching how the US positions itself with Bitcoin before formulating their own strategies.

The executive added that holding more Bitcoin aligns with Trump’s promise to make the US a Bitcoin superpower. 

“If Donald Trump wants to make good on his promise to be a Bitcoin superpower, that ultimately comes down to how much Bitcoin you have. This is a measure of how much the United States is making good on that rhetorical objective,” Pines said. 

Trump’s executive order also directs the Treasury and Commerce secretaries to develop “budget-neutral” strategies for acquiring more Bitcoin to expand the reserve without additional taxpayer burden.

On March 12, Senator Cynthia Lummis reintroduced the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act to push US holdings above 1 million BTC. 

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Tariff earnings a “budget-neutral” strategy for buying Bitcoin

Pines also suggested ways to acquire Bitcoin in a budget-neutral fashion. He floated the idea of using tariff revenues to buy Bitcoin and other potential ways for the US government to purchase more BTC. 

“Revenues that the government can use to acquire more Bitcoin would be things like tariff revenue or other fees that the government collects that are not tax-based fees,” Pines said. This could include royalties from oil and gas leases, sales of federal land, physical gold and other digital assets.

On April 2, Trump imposed a 10% baseline tariff on all imports from all countries through an executive order. The president’s order also included reciprocal tariffs for countries that charge tariffs on US imports. However, the administration’s evolving tariff policy has created ongoing market uncertainty.

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A crypto investment executive said the biggest problem with digital asset markets is price manipulation, claiming that collusion between market makers and exchanges distorts token prices. 

Arthur Cheong, founder of crypto investment firm DeFiance Capital, said in an X post that market makers and crypto projects work together to create artificial prices that can be sustained for long periods. Cheong wrote: 

“You don’t know whether the price is a result of organic demand & supply or simply due to projects and market makers colluding to fix the price to achieve other objectives.”

He added that if the industry’s players don’t step up and improve the situation, a big part of the crypto market will remain “uninvestable for the foreseeable future.”

Centralized exchanges turning a “blind eye” 

Cheong said it was strange that centralized exchanges (CEXs) are “turning an absolute blind eye” to the issue. He described the altcoin market as a “lemon’s market,” a term in economics that describes a market where low-quality products drive out the good due to information asymmetry.

In addition, Cheong described most token generation event pricing in 2025 as an “absolute joke” where the assets’ prices went down by 70% to 90% a few months after listing. “Anyone that bought is down massively,” Cheong added. 

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88% of crypto tokens listed on Binance in 2025 declined after listing 

Data compiled by crypto analyst Miles Deutscher showed that among crypto tokens listed this year on the trading platform Binance, only 3 out of 27 are performing well. This means that 88% of the tokens have declined since listing. 

The price drops ranged from 19% up to 90%. Deutscher said this was the reason why retail investors were quitting. 

A community member responded to the data saying that this is where the industry is currently at. The X user added that they hoped Binance would realize starting at a high valuation wasn’t good for users. 

Binance co-founder Changpeng Zhao previously admitted that Binance’s listing process needs reform. On Feb. 10, the former Binance CEO said that the current system is flawed and suggested that CEXs should automate listings similar to how decentralized exchanges (DEXs) work. 

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Only 20 of the 181 Bitcoin service providers registered with El Salvador’s central bank are operational, with the rest failing to meet the country’s requirements under its Bitcoin Law. 

Local media outlet El Mundo cited data from the Central Reserve Bank of El Salvador, showing that 11% of the service providers are operational. According to the central bank’s database, the rest of the providers are classified as non-operational. 

The data showed that at least 22 non-operational providers have failed to meet most of the country’s Bitcoin Law requirements, which mandate that providers implement stringent supervision of their financial systems. 

Most of El Salvador’s Bitcoin service providers are non-operational

El Salvador’s Bitcoin Law requires providers to maintain an Anti-Money Laundering (AML) program, keep records that accurately reflect the company’s assets, liabilities and equity and have a tailored cybersecurity program depending on the nature of its services. 

The data showed that 89% of the registered providers have failed to meet some of these obligations to be classified as operational. 

Still, a few firms have satisfied the legal criteria, including the state-backed Chivo Wallet and companies including Crypto Trading & Investment and Fintech Américas.

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El Salvador’s Bitcoin experiment

In 2021, El Salvador became the first country to accept Bitcoin as legal tender along with the US dollar. This move made Bitcoin integral to El Salvador President Nayib Bukele’s economic strategy. 

However, the Central American country recently signed a deal with the International Monetary Fund (IMF) on a $1.4 billion loan in exchange for rolling back some of its Bitcoin-related efforts. Under the agreement, taxes will be paid in US dollars and public institutions will limit their use of Bitcoin.

On March 3, the IMF asked the country to stop its public sector Bitcoin buys. Still, Bukele said the government will continue to purchase Bitcoin, seemingly contradicting its IMF deal.

The IMF deal prompted speculation about whether the country would rescind Bitcoin’s status as legal tender. John Dennehy, an El Salvador-based Bitcoin activist and educator, said in an X Space with Cointelegraph that a rollback law changing Bitcoin’s legal status is set to take effect on April 30.

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