A modest bitcoin rally to a possible challenge of the $86,000 level quickly reversed during U.S. afternoon trading hours on Wednesday as Federal Reserve Chairman Jerome Powell warned on the effects of President Trump’s tariff regime.

«The level of the tariff increases announced so far is significantly larger than anticipated,» said Powell in a speech. «The same is likely to be true of the economic effects, which will include higher inflation and slower growth.»

In other words, stagflation — a throwback to a sizable portion of the 1970s when the U.S. experienced weak economic activity alongside double-digit inflation.

«We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,» continued Powell.

The price of bitcoin (BTC) fell about 2.5% in the minutes following the Powell remarks, now trading at $83,700, down 1.5% over the past 24 hours.

U.S. stocks, which had been trying to mount a comeback from opening declines, also were hit, the Nasdaq slumping 3.4% to a session low.

Welcome to The Protocol, CoinDesk’s weekly wrap-up of the most important stories in cryptocurrency tech development. We’re Margaux Nijkerk and Sam Kessler, reporters on CoinDesk’s Tech team.

In this issue:

Can Ethereum Be Truly Private? Developers Push for Encrypted Mempool, Default Privacy

Nvidia Moves AI Supercomputer Production to U.S., Opening New Avenues for Crypto Miners

MIT-Incubated Optimum Raises $11M Seed Round to Build Web3’s Missing Memory Layer

Noble’s New ‘AppLayer’ Lets Developers Build Stablecoin Tools on Celestia

This article is featured in the latest issue of The Protocol, our weekly newsletter exploring the tech behind crypto, one block at a time. Sign up here to get it in your inbox every Wednesday.

Network News

PRIVACY HEATS UP AMONG ETHEREUM DEVS: When the U.S. government sanctioned the Ethereum-based crypto mixing service Tornado Cash in 2022, it ignited a debate within the crypto community that continues three years later. Advocates argued that complying with the sanctions amounted to censorship — undermining a fundamental cypherpunk principle. President Donald Trump supported the cypherpunks and lifted the sanctions on Tornado Cash in March of this year, but for some Ethereum developers, the situation highlighted a flaw within the network that still exists today: Why should users depend on third-party apps to transact privately on the network? Perhaps emboldened by the recent Tornado Cash developments, Ethereum developers and researchers have once again begun discussing ideas for making the Ethereum network private at its core. «Privacy must not be an optional feature that users must consciously enable — it must be the default state of the network,» said PCaversaccio, whose post outlined his vision for a privacy-oriented Ethereum roadmap. «Ethereum’s architecture must be designed to ensure that users are private by default, not by exception.» In response to PCaversaccio’s post, Ethereum co-founder Vitalik Buterin left a comment on the network’s main developer forum with his own much shorter privacy-oriented Ethereum roadmap. Buterin suggested focusing on privacy for on-chain payments, anonymizing on-chain activity within applications, making communication on the network anonymous, and privatizing on-chain reads. To achieve all of this, Buterin listed various steps like integrating certain third-party privacy features into the core network. — Margaux Nijkerk and Sam Kessler Read more.

NVIDIA AI SUPERCOMPUTER PRODUCTION PLANS COULD BENEFIT CRYPTO MINERS: Nvidia plans to manufacture its next generation of AI chips and supercomputers entirely in the U.S. for the first time, the company said in a statement. The move reflects rising demand for AI infrastructure and a broader push to localize advanced tech manufacturing — one that could also benefit crypto miners repurposing their facilities for AI and high-performance computing (HPC). Many of these operators already have access to the large-scale power and cooling systems needed for data center operations, making them potential players in the growing AI economy. Crypto miners, once singularly focused on hashing power, are increasingly looking for ways to fit into the AI and HPC supply chain. Their existing access to power-dense infrastructure and logistical experience in running industrial-scale operations gives them a foothold as demand for AI computation surges. Recent tariffs by U.S. President Donald Trump, however, is causing anxiety among miners as the policy changes are expected to raise costs on ASIC miners, electrical components, networking hardware and more.— Helene Braun Read more.

MEMORY LAYER OPTIMUM RAISES $11M IN SEED: Optimum, a decentralized, performance-enhancing memory layer for any blockchain, raised an $11 million seed round, inviting its creators from institutions like Harvard and MIT to jump from the world of academia into the commercial crypto arena. The seed round was led by 1kx with participation from Robot Ventures, Finality Capital, Spartan, CMT Digital, SNZ, Triton Capital, Big Brain, CMS, Longhash, NGC, Animoca, GSR, Caladan, Reforge and others. ​​Optimum is building what it calls the missing memory layer of blockchains, making the way data is stored, accessed and propagated, faster, cheaper and truly decentralized, according to a press release. At the core of Optimum’s innovation is a method of decentralized coding for distributed systems, known as Random Linear Network Coding (RLNC), developed by Muriel Médard, an MIT professor. — Ian Allison Read more.

NOBLE’S NEW ‘APPLAYER’ LETS DEVELOPERS BUILD STABLECOIN APPS ON TOP OF CELESTIA: Noble, a blockchain for issuing real-world assets (RWA) and stablecoins, announced Wednesday that it will expand its platform by introducing “AppLayer,” an Ethereum-compatible rollup that allows developers to create their own RWA applications and infrastructure. Noble’s AppLayer aims to let developers build new financial tools optimized for real-world assets like stablecoins — digital assets whose value is pegged to another asset, like the U.S. dollar. AppLayer will leverage Celestia, a data availability blockchain that aims to bring down storage costs for data-intensive blockchain networks. Celestia, like Noble, is plugged into the Cosmos blockchain ecosystem and is compatible with the Ethereum Virtual Machine (EVM), meaning it can read smart contracts from other Ethereum-based chains. — Margaux Nijkerk Read more.

In Other News

Mantra’s OM token fell from over $6 to under $0.45 in a matter of hours on Tuesday with no apparent catalyst. CEO John Mullin said in an X post on Wednesday that he would burn his team’s tokens to win back the trust of the Mantra community. Mullin said the price drop resulted from exchanges closing OM positions, but members of the crypto community cast blame on the Mantra team. OKX founder Start Xu referred to the incident as «a big scandal.» — Jamie Crawley Read more.

Aiming to perhaps replicate Strategy’s bitcoin (BTC) playbook, except with solana (SOL), fintech commercial real estate platform Janover (JNVR) has built a SOL stack worth roughly $21 million and seen its share price rise nearly 20-fold in less than a month. The company purchased earlier this week another 80,567 SOL tokens valued at approximately $10.5 million, bringing its total holdings to 163,651. — Krisztian Sandor Read more.

DWF Labs is investing $25 million in World Liberty Financial (WLFI), the decentralized finance protocol backed by U.S. President Donald Trump and his family. The crypto market maker is also entering the U.S. market with a new office in New York City as part of its broader expansion plans, according to a press release. — Francisco Rodrigues Read more.

Regulatory and Policy

The Securities and Exchange Commission (SEC) is not yet ready to make a decision on two critical features that issuers of the spot crypto exchange-traded funds (ETFs) are hoping to add to their products. The regulator delayed a decision on whether it will allow in-kind redemptions for WisdomTree’s Bitcoin Fund (BTCW) and VanEck’s Bitcoin Fund (BITB) and Ethereum Fund (ETHW). It also moved its deadline for a decision in regards to a proposal by Grayscale to allow staking its Ethereum Trust (ETHE) and Mini Ethereum Trust (ETH), which the asset manager’s exchange, NYSE Arca had requested in February. — Helene Braun Read more.

Seychelles-based cryptocurrency exchange OKX is expanding to the U.S. and establishing a new regional headquarters in San Jose, California. The exchange will rolling out access to its platform and its native OKX Wallet to U.S.-based crypto traders.— Cheyenne Ligon Read more.

Search giant Google will only allow cryptocurrency exchanges and software wallets to advertise in the European Union if they hold a license under the EU’s Markets in Crypto-Assets (MiCA) regulation, starting April 23, the company announced. Google said advertisers must now obtain a certification from the company and demonstrate they are registered as a Crypto-Asset Service Provider (CASP) under MiCA. The company also requires advertisers to comply with any additional country-specific legal obligations.—Francisco Rodrigues Read more.

Calendar

April 30-May 1: Token 2049, Dubai

May 14-16: Consensus, Toronto

May 19-23: Solana Accelerate, New York City

May 20-22: Avalanche Summit, London

May 27-29: Bitcoin 2025, Las Vegas

June 30-July 3: EthCC, Cannes

Oct. 1-2: Token2049, Singapore

Eric Trump, U.S. President Donald Trump’s second son, is set to appear at this year’s Consensus conference to discuss his vision to reshape bitcoin mining in the United States.

Trump will talk about American Bitcoin, a new venture formed with Hut 8 where he serves as Chief Strategy Officer. 

«The launch of American Bitcoin represents a transformative moment for Bitcoin mining in North America,» said Trump in a statement. “I am so proud to finally unveil our bold vision for this initiative, which we believe will become the world’s largest and most efficient pure-play Bitcoin miner.»

Launched on March 31, American Bitcoin said it aims to become the world’s largest pure-play Bitcoin miner, targeting over 50 EH/s of mining capacity.

Eric Trump is scheduled to speak on May 15 at Consensus 2025, which takes place in Toronto May 14-16.

Consensus, which is organized by CoinDesk, is known as the longest-running conference in the digital assets industry, with attendance regularly topping 15,000 people. This year’s event will be at the Metro Toronto Convention Centre in downtown Toronto.

American Bitcoin is one of several crypto ventures launched by the Trump family. Eric Trump also backs World Liberty Financial, a DeFi protocol and planned blockchain-based marketplace where users can borrow and lend cryptocurrencies, create liquidity pools and trade stablecoins. In March, WLFI announced that it plans to launch its own stablecoin, USD1, with BitGo providing custody services.

In addition, Eric Trump is also an advisor to Metaplanet, the largest holder of bitcoin in Japan, which is following a Michael Saylor/Strategy-type bitcoin treasury model. He’s also an advisor to Dominari Holdings, a wealth management firm, which in March disclosed that it had bought $2 million of BlackRock’s iShares Bitcoin Trust (IBIT) shares.

Eric Trump told CNBC this month that the Trump Organization was drawn to crypto after being “debanked” by several financial groups during the Biden Administration. “It actually is what drove us toward cryptocurrency,” he said.

“You realize that cryptocurrency was a lot faster, it was a lot more pragmatic, it was a lot more transparent, it was exponentially cheaper.”“At this point, I know almost everybody in the industry in some way, shape or form,” he told CNBC. “I fell in love with the industry, you know, a few years ago, and really dove head in.”

Eric Trump’s crypto interventions haven’t all been successful. In February, Trump tweeted it was a «good time to add» ether (ETH), which was trading around $2,700 at the time. At press time it is trading around $1,500.