And why quantum computers can’t break digital asset cryptography yet. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ View Online Crypto Update Danish Ajmeri — Head of Crypto May 7, 2026 Q1 IN NUMBERS (Jan 1 – Mar 31) BTC: -22.2% ETH: -29.3% SOL: -33.1% TOTAL MARKET CAP: US$2.33T (-20.5% Q1) Three big things that happened in crypto Hi there, My name is Danish Ajmeri, and I’m the head of crypto at Wealthsimple. We send these updates every quarter to help investors stay on top of the biggest news in the world of digital assets. We hope you’ll leave us some feedback when you get to the survey below. Now on to the newsletter: We’re in the midst of a crypto winter — Bitcoin bottomed out around US$60,000, with altcoins and memecoins hit especially hard, with global crypto trading rates falling to a two-year low. The U.S. tech sector sell-off in Q1, ongoing macroeconomic headwinds from the White House’s tariff regime, and the Iran war all played a role. Stablecoins, on the other hand, are largely up: global supply reached US$315 billion last quarter. This winter feels unlike other winters because there’s been so much growth in spite of the market’s Q1 drop. Stablecoin and perpetual futures adoption is growing in both Canada and the U.S., while regulators on both sides of the border are mostly warming to the idea of treating digital assets like commodities rather than securities. Some of what’s going on right now is also the typical boom and bust cycle in any investment asset, including crypto. Here’s what else you need to know about the last few months in crypto: You can trade the S&P 500, gold, and oil on-chain now Crypto’s increasing convergence with mainstream financial markets through mechanisms like stablecoins can give traders the best of both worlds. But the crypto-tradfi convergence is happening in other important ways, too. After the Iran war began in late February, Hyperliquid recorded US$1.5B in daily oil trades on one day thanks to its upgrade last quarter to allow permissionless markets. Commodities trading as a whole, in Q1, represented 40% of the platform's volume. At the same time, crypto is adopting some of tradfi’s trappings to boost investor confidence. Moody’s, one of the world’s most respected rating agencies, covered a Bitcoin-based bond series for the very first time in Q1. And, in a first for a Canadian financial institution, Wealthsimple used stablecoins in a closed experiment with Visa to provide near-instantaneous settlements of credit card transactions. The U.S. SEC says (most) digital assets aren’t securities Crypto owners and exchanges once had a hard time knowing whether trading digital assets violated securities law in the U.S., the world’s largest crypto market. A major Q1 announcement by the SEC suggests the answer is, largely, no. In its guidance letter, it calls BTC, ETH, SOL, and XRP “digital commodities”, refers to NFTs as “digital collectables”, and also says stablecoins likely aren’t securities, either. The distinction matters because securities are treated with a much higher degree of regulatory scrutiny, limiting the scope of legal product offerings by crypto exchanges. Our regulators take U.S. perspectives into consideration, so it’s possible the move could influence Canada’s crypto laws going forward. The Stablecoin Act, partly inspired by the U.S. GENIUS Act, also doesn’t consider legal stablecoin issuers to be securities dealers. At the very least, the SEC’s new guidance could boost the trust of investors in U.S. digital assets no matter where they happen to live. Crypto leaders beefed up their post-quantum security measures It’s theoretically possible for quantum computers to break elliptic curve cryptography, the code protecting most major cryptocurrencies like Bitcoin and Ethereum, and a new research paper suggests it could be done with far fewer computational steps than previously thought. But, to be clear, no one with a quantum computer could pull off such a hack today — including Google, one of the institutions behind the research paper. This paper is a call for the crypto industry to future-proof its security architecture more than an apocalyptic warning, and crypto leaders seem to be listening. Ethereum co-founder Vitalik Buterin unveiled a post-quantum security roadmap for the blockchain in February, weeks before the paper’s release, while Coinbase CEO Brian Armstrong announced he’d be personally involved in developing his company’s measures. What’s next? The crypto industry launched a number of significant technical features in Q1 and we don’t expect it to stop. In Q2, we’re closely tracking the launch of CADD — Canada’s first regulated CAD-backed stablecoin, issued by Tetra Trust under full financial-institution oversight. (Full disclosure: Wealthsimple is an investor in Tetra). We’re also following adoption of Tempo’s payment-focused blockchain, developed by Stripe and Paradigm with input from a multitude of finance and tech leaders (including Shopify, Deutsche Bank, and Anthropic). In addition, we’ll be watching developments with DeFi United, the industry coalition formed in direct response to the $293 million KelpDAO hack in April (the largest DeFi exploit of 2026 so far). It’s tempting to dwell on how far digital asset prices fell in Q1 relative to last year’s crypto summer highs. Keep in mind, however, just how much BTC, ETH, and SOL prices grew over the past three years. It’s hard to tell exactly when the crypto cycle will spin from winter to summer but, as a rule of thumb, a bear market is typically considered a good time to prepare for the next boom. All the best, Danish Ajmeri Head of Crypto CRYPTO 201 Automated Market Makers You’ve probably heard of a decentralized exchange (DEX) before — if you haven’t, it’s a digital peer-to-peer marketplace for crypto trading. Most DEXs rely on buyers and sellers, not unlike a traditional market. They also run into some of the same problems. If very few people on a DEX want to buy or sell your ultra-niche altcoin, you’ll have problems making a trade. Automated market makers, or AMMs, try to address this issue through liquidity pools, funded by users. An algorithm sets the price for tokens traded on the AMM based on whatever’s in these pools at any one time. Whenever you want to trade, you swap one token for another directly through the AMM. You walk away with your token of choice, and the AMM rebalances its liquidity pools based on whatever you’ve added. AMMs such as Aerodrome, Raydium, or PancakeSwap offer some advantages if you want to trade memecoins or rare altcoins. Their liquidity systems mean you don’t necessarily need to find a buyer or seller to trade, as you would on a typical DEX. Many AMMs also provide lower fees compared to DEX’s because they don’t use intermediaries to facilitate trades — the algorithm handles it all. Better still, anyone with some tokens to supply and wallet software can become a liquidity provider, earning a cut of trading fees. There are, however, some factors to using an AMM. Because an AMM’s algorithms readjust liquidity automatically, large trades can noticeably worsen the price of a particular token. You can also run into problems if you place an order at one price and the trade actually executes at another price due to delays or a backlog of pending trades, an issue known as slippage. Ultimately, the single biggest factor to consider is an AMM’s overall liquidity. If it’s low, a reasonable-sized transaction can make your trades significantly more expensive. Wealthsimple Takes Over Your Life Wealthsimple Presents goes live on May 21 at 2pm ET. We'll reveal all the places we're showing up — and it's everywhere your bank isn't. Join us — there are a million more reasons you'll want to. Register now Did you like this newsletter? 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