Kaspa's Leverage-Driven Rally: Can Sustained Growth Outlast the Volatility?

The cryptocurrency market has long been a theater for speculative fervor, where leverage often amplifies both gains and risks. Kaspa (KAS), a blockDAG-based blockchain project, has recently become a focal point of this dynamic. In early 2025, KAS surged on a wave of derivative inflows and leveraged trading, with open interest (OI) jumping 42% in 24 hours-a stark contrast to its weak on-chain fundamentals, where active addresses fell by 97.72% and declining UTXO signals hinted at distribution rather than accumulation. This raises a critical question: Can a leverage-driven rally in crypto assets like Kaspa sustain long-term growth, or is it destined to collapse under the weight of its own volatility?

To answer this, we must contrast Kaspa's speculative trajectory with fundamentals-driven growth models, such as Rigel Pharmaceuticals' recent earnings-driven rally, and examine broader leverage risks across industries and regulatory frameworks.

Kaspa: A Tale of Derivatives and Technical Optimism

Kaspa's blockDAG architecture, which enables one-second block times and high throughput, positions it as a long-term contender in the blockchain space. Upcoming upgrades like the Casplex Layer 2 and EVM compatibility are expected to catalyze adoption. However, these fundamentals have yet to translate into user-driven growth. Instead, the recent price surge has been fueled by speculative derivatives trading, with a positive OI-weighted funding rate of 0.0035% underscoring bullish sentiment among leveraged traders.

Technically, KAS appears poised for a breakout: A low RSI of 24 and tight Bollinger Bands suggest oversold conditions, while the market remains in consolidation according to technical analysis. Analysts project price targets ranging from $0.10 to $0.50 by year-end, contingent on smart contract adoption and macroeconomic conditions. Yet, the reliance on leverage introduces fragility. If derivative traders unwind positions-triggered by a single negative catalyst-the asset could face a sharp correction, as seen in prior crypto cycles.

Rigel Pharmaceuticals: Earnings as a Foundation for Growth

In stark contrast, Rigel Pharmaceuticals (RIGL) has seen its stock rise 31% in 2025, driven by robust earnings and revenue growth. The biotech firm reported Q3 product sales of $64.1M, a 65% year-over-year increase, with its flagship drug Tavalise generating $44.7M in sales-a 70% jump from 2024. This fundamentals-driven rally is underpinned by tangible metrics: Rigel now anticipates 2025 revenue of $285M–$290M, bolstered by a $137.1M cash reserve.

Unlike Kaspa, Rigel's growth is not reliant on speculative leverage but on clinical success and market demand. Its trajectory highlights a key distinction: While leverage can amplify short-term gains, sustainable growth in traditional markets hinges on earnings, innovation, and operational efficiency.

Energizer's Leverage Risks: A Cautionary Tale

Energizer, a legacy consumer goods company, offers another lens into leverage risks. With $3.4 billion in debt, the company faces constraints on R&D and M&A, even as it pivots to international auto care and e-commerce to offset stagnant alkaline battery sales according to market analysis. Its reliance on leverage to fund growth in a declining core market mirrors Kaspa's derivative-driven rally-both are bets on future potential rather than present fundamentals.

Energizer's strategy to reduce debt through cost discipline and sustainability initiatives (e.g., a 35% recycled material battery line) underscores the importance of balancing leverage with operational resilience. For Kaspa, this suggests that without meaningful user growth or enterprise adoption, its leverage-driven rally could mirror Energizer's precarious position.

U.S. Regulatory Shifts: A Broader Context for Leverage

The U.S. banking sector's regulatory landscape in 2025 provides further context. The FDIC's approval of relaxed leverage rules-reducing capital requirements for large banks by $13 billion and for community banks by 27%-reflects a broader push to ease post-2008 restrictions. While proponents argue this fosters lending and economic growth, critics warn of heightened systemic risks.

This regulatory shift highlights a paradox: In traditional finance, leverage is tightly controlled to mitigate risk, yet in crypto, it often operates in a gray area. Kaspa's derivatives-driven rally, unmoored from on-chain activity, exists in a market where leverage is both a tool and a weapon. The absence of comparable regulatory guardrails in crypto amplifies the potential for volatility and collapse.

Conclusion: The Fragility of Leverage-Driven Growth

Kaspa's rally exemplifies the double-edged sword of leverage in crypto. While derivatives and speculative inflows can propel assets to new heights, they also create a house of cards vulnerable to sudden liquidations. In contrast, Rigel Pharmaceuticals' earnings-driven growth and Energizer's cautious debt management illustrate the value of fundamentals in sustaining long-term value.

For investors, the lesson is clear: Leverage can be a powerful catalyst, but it must be tempered by robust fundamentals and prudent risk management. As the FDIC's regulatory moves signal a shift toward looser leverage in traditional finance, the crypto market's lack of oversight becomes even more glaring. Kaspa's blockDAG technology and future upgrades may yet justify its price targets-but until on-chain activity aligns with market optimism, its rally remains a high-stakes gamble.