Crypto Breaking

Introduction
Crypto markets erased roughly $100 billion in value late Sunday as traders priced in the risk of a partial U.S. government shutdown tied to funding for the Department of Homeland Security. The dispute in Washington intensified after a Minneapolis shooting involving federal agents, prompting Senate Democrats to signal they would block any spending package that included DHS funding unless reforms were enacted. In the meantime, data showed the broader market slipping: the total crypto market capitalization fell from about $2.97 trillion to $2.87 trillion within roughly six and a half hours. Bitcoin (CRYPTO: BTC) slipped 3.4% in the past 24 hours, while Ether (CRYPTO: ETH) declined 5.3%. Amid the selling, more than $360 million in leveraged positions were liquidated, including about $324 million in long contracts, according to market data trackers. The evolving political backdrop underscored how sensitive crypto markets remain to macro headlines and policy risk.

Key Takeaways

The crypto market cap declined by roughly $100 billion in under a day, moving from about $2.97 trillion to $2.87 trillion within six-and-a-half hours.

Bitcoin (CRYPTO: BTC) fell about 3.4% over 24 hours, while Ether (CRYPTO: ETH) declined by roughly 5.3% in the same window.

More than $360 million of leveraged crypto positions were liquidated in the period, with $324 million of that in long positions.

Prediction markets priced in rising odds of a U.S. government shutdown by the end of January, with bets around 80% on both Kalshi and Polymarket.

Political developments—ranging from DHS funding debates to broader tariff rhetoric—fed a risk-off mood that weighed on sentiment across crypto and traditional markets.

Tickers mentioned: $BTC, $ETH

Sentiment: Neutral

Price impact: Negative. The broad sell-off reflected elevated political risk and risk-off sentiment among investors.

Trading idea (Not Financial Advice): Hold. With headlines continuing to evolve, patience and risk-management remain prudent while monitoring policy developments.

Market context: The session illustrates how political risk and policy uncertainty can spill over into crypto markets, reinforcing the link between headline risk, liquidity conditions, and risk appetite in a sector still sensitive to macro drivers.

Why it matters

The weekend pullback underscores how closely crypto prices track geopolitical and regulatory headlines, especially when they touch the U.S. government’s funding machinery. The DHS funding fight sits at the intersection of security policy and immigration enforcement, issues that have historically influenced risk sentiment and capital flows across asset classes. As lawmakers volley rhetoric over DHS appropriations and ICE oversight, traders are recalibrating positions in a market that remains dominated by leveraged bets and fast-moving liquidity. The immediate consequence is a sharper pullback in the most liquid assets, with altcoins acting as attack points for broader downside given thinner order books and higher volatility during such episodes.

Market participants are also weighing broader catalysts beyond the budget debate. The same session that saw a crypto dump was punctuated by headlines such as tariff threats from U.S. leadership and intensified geopolitical tensions in the Middle East, factors that tend to compress risk appetite across risky assets, including digital currencies. In this environment, traders have turned to defensives and hedges, but even safe-haven narratives within crypto have not provided the usual insulation. The dynamics demonstrate how quickly sentiment can shift when political timelines intersect with policy decisions, testing traders’ capacity to manage leverage and maintain liquidity during stress periods.

Odds of a US government shutdown by Saturday, Jan. 31, are at 80% on Polymarket. Source: Polymarket

Beyond the immediate policy friction, investors watched the unfolding risk indicators that have become a fixture of crypto markets during episodes of instability. The last extended U.S. government shutdown—lasting 43 days—offered a test case for how digital assets respond to prolonged political gridlock. Bitcoin fell from its earlier peak near $126,080 to just under $100,000 during that period, highlighting that even major assets can experience pronounced drawdowns when confidence wavers. The broader market narrative during that time included gold outperforming digital assets, suggesting that many investors favored traditional safe-haven assets amid heightened macro and geopolitical uncertainty.

The sentiment framework at the time also reflected in the Crypto Fear & Greed Index, which dipped further into “extreme fear” as investors consolidated risk-off bets, even as some accredit opportunity for mean reversion within risk-on altcoins. This recent episode reinforces the lesson that crypto markets, despite their growth and innovation, remain highly reactive to U.S. policy signals and the political calendar, particularly when combined with leverage-driven liquidity risks.

Bitcoin’s change in price during the last US government shutdown. Source: CoinGecko

As the market digests the evolving stance in Washington, traders are closely monitoring the odds markets for any reassessment of the shutdown timeline. By Sunday, prediction markets were signaling a high probability—around 80% by January 31—reflecting a consensus that the political impasse could persist into the end of the month. This pricing reflects a mix of institutional caution and the historical tendency for policy friction to complicate asset pricing when funding bills hang in the balance.

Looking back, the combination of fiscal deadlines, immigration-enforcement policy debates, and broader macro uncertainty has created a difficult environment for risk assets. While some participants argue that such episodes eventually yield a reversion, the timing remains uncertain, and liquidity conditions in crypto markets can deteriorate quickly in the absence of clear policy resolution. In the near term, traders are likely to watch for any signs of compromise on DHS funding, as well as the evolving outlook for U.S. monetary and fiscal policy that could influence risk sentiment across asset classes.

Gold’s relative performance, historically a gauge of risk-off appetite, remains a factor to watch as a barometer against crypto’s volatility during political turbulence. The ongoing tension between risk-on and risk-off drivers ensures that price action in major crypto assets will continue to be shaped by headline-driven flows, even as longer-term fundamentals—including institutional adoption and network developments—continue to evolve behind the scenes.

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy

This article was originally published as Crypto Market Drops $100B as US Government Shutdown Fears Loom on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Bitcoin under pressure ahead of a pivotal macro week

Bitcoin (CRYPTO: BTC) traded into Sunday’s close amid a chorus of macro catalysts that have traders weighing a potential shift in risk sentiment. Data show BTC/USD slipping around 1.6% on the day, topping out near $87,471 on Bitstamp as investors digest a slate of events that could influence liquidity and volatility through the end of January. The pullback comes as futures and spot markets brace for a string of data releases and policy decisions that have historically driven outsized moves in the crypto space.

Longer-dated risk is anchored by a combination of political and monetary headwinds. Crystallizing concerns about a possible U.S. government shutdown and ongoing debate over tariff policy have traders revisiting the notion that macro shocks could spill into crypto markets. As the Kobeissi Letter highlighted, a shutdown scenario and tariff threats were being watched closely by market participants, with the potential to amplify risk-off dynamics if equity futures fail to stabilize.

The near-term price action has also drawn attention to the balance of open interest and liquidations. In the 24-hour window, long positions dominated liquidations, with totals surpassing $250 million, according to data tracked by CoinGlass. The data suggest traders are navigating a choppy tape, where even modest shifts in macro sentiment can trigger outsized liquidations in highly leveraged segments of the market.

Against this backdrop, some analysts have sought to identify catalysts that might offer relief or an upside surprise. Michaël van de Poppe flagged a potential bullish divergence between BTC and silver on a three-day timeframe, a rare setup that could signal intensified volatility in the coming sessions. The analyst noted that after record highs in gold and silver, a divergence could reflect shifting money flows within the broader precious metals and crypto complex. Such a development could attract speculative capital back to the crypto space if the divergence proves persistent.

Market participants also kept a close eye on technical references and order-book liquidity. Traders discussed a key support level near the low $80,000s, with some arguing that a break below mid-range momentum would tilt the balance toward downside risk as traders reassess leverage and margin conditions. The broader narrative remains unsettled: a short-term bullish bounce could emerge on a favorable macro surprise, but the dominant theme appears skewed toward caution as major events loom.

In addition to macro considerations, the market continues to quantify positioning through open interest metrics and liquidity data. A notable uptick in open interest around the weekly close underscored the sense that traders were preparing for a high-volatility period. This dynamic is consistent with a market awaiting clarity on policy trajectories and economic indicators rather than committing to a directional bet.

What stands out in the current setup is the confluence of external shocks with technical dynamics. While a few analysts argue that a relief rally remains possible if macro data cools or if policy expectations shift, the prevailing tone emphasizes the risk of a renewed leg lower for BTC in the near term. The potential for a sharp move either way is heightened given the proximity of key events and the sensitivity of crypto markets to broad risk appetite changes.

Figure: BTC liquidation heatmap. Soruce: CrypNuevo/X

BTC price in focus as week’s macro slate deepens

From a market behavior perspective, traders are watching how the week’s macro agenda might shape the risk environment for cryptocurrencies. The coming days could feature a combination of U.S. macro releases, commentary from policymakers, and evolving regulatory rhetoric that collectively influence the trajectory of liquidity and risk tolerance across digital-asset markets.

As the week unfolds, observers will be looking for confirmation signals from on-chain metrics, order-book depth, and the pace of liquidations relative to open-interest development. In the near term, the price action remains sensitive to headlines and sentiment about whether the broader macro backdrop presents a net risk-on or risk-off impulse for BTC and related assets.

BTC/XAG: a potential pivot point

On a longer horizon, some traders have highlighted a possible pivot in the relationship between Bitcoin and silver. A rare bullish divergence observed on a three-day chart could imply a rotation of capital into crypto if negative macro pressures abate and risk appetite improves. This narrative is not a guarantee, but it underscores the interconnectedness of macro-complex dynamics and digital-asset prices as investors evaluate hedges and alternative stores of value.

In the background, market observers note that the Federal Reserve’s policy path remains a central determinant. The timing and magnitude of any rate adjustments feed into expectations for liquidity and leverage in crypto markets. The probability of changes to policy is continually priced in by market participants, with odds of a near-term cut frequently cited as a critical variable shaping risk sentiment.

Market context and implications

The current environment is characterized by heightened sensitivity to macro developments and policy signals. Crypto markets have shown a propensity to react to headlines that influence risk appetite, with Bitcoin often acting as a barometer for broader investor sentiment. The interplay between macro data, Fed policy expectations, and geopolitical risk can amplify price moves in digital assets, making near-term risk management particularly important for traders and institutions.

Why it matters

The week ahead matters for a wide range of market participants. Traders are calibrating exposure as macro uncertainties persist, which could lead to increased volatility and rapid repricing of risk assets. For holders and enthusiasts, the ability to navigate shifts in liquidity and leverage will influence decision-making around entries and exits. For developers and infrastructure participants, sustained volatility can affect funding dynamics, yield strategies, and risk controls within the broader ecosystem.

What to watch next

– Key macro events and policy signals that could alter risk sentiment in crypto markets.
– The Federal Reserve’s decision and accompanying communications around rate expectations.
– Developments around potential U.S. government funding decisions and tariff policy.
– Changes in open interest and liquidations as markets approach major headlines.
– Any progression in BTC’s price relationship with silver or other traditional hedges.

Sources & verification

– BTC/USD price data and intraday movements from TradingView and Bitstamp.
– 24-hour crypto liquidations data from CoinGlass.
– Market commentary and tweets from The Kobeissi Letter and Michaël van de Poppe.
– CME Group FedWatch Tool probabilities for the upcoming FOMC decision.
– Regulatory and macro context referenced in the article’s embedded links and citations.

Rewritten article body (Market reaction and key details)

Market reaction and key details

Bitcoin (CRYPTO: BTC) extended a slide into Sunday’s session as traders weighed a week expected to be defined by macro developments. The asset’s pullback followed a 1.6% drop on the day, with prices touching roughly $87,471 on Bitstamp, according to TradingView data. The move underscored a fragile risk stance ahead of a packed calendar that could reshape liquidity and volatility across digital markets.

In the background, investor positioning appeared to lean toward downside in the near term. Data from CoinGlass showed long liquidations dominating a broad set of liquidations in the last 24 hours, with totals exceeding $250 million. The pattern suggested a risk-off tilt as traders recalibrated leverage in response to the potential for further macro shocks and policy surprises.

Market observers highlighted the likelihood of a broad macro trigger that could intensify price action. The Kobeissi Letter framed the week as one that could confront investors with a combination of macroheadwinds—ranging from a potential U.S. government shutdown to tariff policy changes—and the Federal Reserve’s policy stance. The note underscored the sensitivity of crypto markets to political and economic developments and the potential for outsized moves as events unfold.

BREAKING: Bitcoin falls below $88,000 as $60 million worth of levered longs are liquidated in 30 minutes.

A government shutdown is now expected and President Trump has threatened 100% tariffs on Canada.

US stock market futures will open in less than 7 hours. pic.twitter.com/40GxrMdRTI

— The Kobeissi Letter (@KobeissiLetter) January 25, 2026

The broader setup included a note on impending earnings and macro releases that could set the tone for the week. The CME Group’s FedWatch Tool, cited in market commentaries, placed the odds of at least a 0.25% cut in focus for the upcoming FOMC meeting, highlighting the ongoing debate about the pace of rate reductions and the impact on liquidity conditions for risk assets. The nuanced expectation around policy kept traders on edge, even as some strategists suggested that any disappointment in data could spark renewed selling pressure in BTC.

On the technical front, traders observed a retreat from the mid-range as a potentially bearish signal for further downside. CrypNuevo, a well-known analyst, highlighted a support threshold near $86,300 as a critical line in the sand for bulls, while cautioning that a loss of momentum could invite a reversion toward the weekly low. The analyst also pointed to larger-timeframe (HTF) liquidations tilting the risk profile toward the downside in the near term, signaling that a short-term rally would likely face stiff resistance in the absence of supportive macro catalysts.

“Any short-lived pump this week is a potential short opportunity.”

Another thread of the narrative involved observations around open interest and liquidity. Several traders noted an unusual surge in open interest heading into the weekly close, a sign that market participants were positioning for a potentially volatile stretch ahead of major macro events. This dynamic reinforced the sense that BTC could exhibit amplified moves as new information arrives and risk appetite fluctuates.

Looking for a potential counterpoint, Michaël van de Poppe argued for a scenario where BTC could form a bullish divergence against silver (XAG) on the three-day horizon. The analyst suggested that a bottom signal in this metric could indicate capital rotation into other assets and a possible swing higher for Bitcoin if macro conditions stabilize. While not a forecast, the perspective added nuance to the ongoing debate about whether the market would find a bottom or another test of the lingering support around the low-80s region.

Against this backdrop, market participants remained attentive to how the macro calendar would unfold and what signals from policymakers might mean for risk assets. The Fed’s next move, federal data releases, and even international trade developments could all influence the balance of risk and reward in the crypto space over the coming days.

BTC/XAG three-day chart with RSI, volume data. Source: Michaël van de Poppe/X

This article was originally published as Bitcoin Gets Macro Boost as $87,000 Comes Into Play on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

The winter storm sweeping across much of the United States has forced adjustments in energy consumption by Bitcoin mining operators, with Foundry USA—home to the largest Bitcoin mining pool by hash power—scaling back its output by roughly 60% since Friday. The curtailment translates to a loss of about 200 exahashes per second (EH/s) of hashing power, according to TheMinerMag, and has pushed the pool’s current total to around 198 EH/s, a level that accounts for about 23% of the world’s mining capacity. The slowdown in production has coincided with longer than typical block intervals, as operators throttle activity to ease stress on electrical grids during a period of extreme weather. The episode highlights how crypto miners can function as a flexible demand side resource, potentially stabilizing grids when energy systems are stretched.

Foundry USA’s reduced output mirrors a broader pattern observed among U.S. miners amid Winter Storm Fern, which has forced a number of facilities to adjust energy usage to minimize strain on power networks. The curtailment has been reported beyond Foundry, with Luxor and other mining operators cited by TheMinerMag as implementing similar load reductions in response to stressed energy infrastructure. The weather event, which has swept across the Southeast, Northeast, and parts of the Midwest, has placed the electricity grid under heightened pressure, prompting utilities and grid operators to seek controllable load that can be brought online or taken offline in response to demand swings. The storm’s reach and the grid challenges it presents have drawn attention to the role of mining as a non-traditional load that can be managed to balance supply, especially during peak demand periods.

The dynamic at play underscores a paradox at the heart of crypto mining: while the industry is often criticized for its energy use, miners can also serve as a grid resource by adjusting electricity demand in response to grid conditions. When demand is low, miners can ramp up operations to consume electricity that would otherwise be idle; during peak demand, they can reduce or temporarily suspend activity to free up capacity for consumers. This elasticity can help prevent grid instability and reduce the risk of equipment damage from overloading infrastructure. As The Weather Channel notes, storms like Fern bring a mix of snow, ice, and freezing rain across large swaths of the country, amplifying the need for prudent energy management by industrial users, including mining operators.

The storm’s effects extend beyond energy consumption. The current weather pattern has contributed to a fragile operating environment for miners, with temporary slowdowns in hash rates and potential implications for the pace of the Bitcoin network’s block production. While hash power remains substantial on a global basis, the United States—once a major node in the mining landscape—faces ongoing adjustments as facilities respond to local conditions, including power outages and grid constraints. The Weather Channel’s radar and forecast data have documented Fern’s trajectory and the regions most affected, offering context for operators planning energy use in the near term. The broader implication is that weather-driven curtailment could influence near-term network dynamics, even as the longer-term trajectory of hash rate remains tied to market conditions, energy prices, and regulatory developments.

Figure: The Weather Channel’s radar and forecast imagery illustrate Fern’s reach and the regions most affected by the storm, providing a visual context for the energy-management decisions being made by mining operators. The storm’s footprint is expected to extend across a broad geographic area, with power disruptions affecting more than a million residents in some scenarios, according to live weather updates.

Bitcoin network health remains anchored in the fundamental economics of mining and energy availability, with public data showing how hashing power is distributed across pools and geographies. The ongoing discussions around energy consumption, grid reliability, and the capacity of industrial actors to modulate demand have become a central part of conversations about how crypto infrastructure interacts with traditional energy systems. The current weather event, while momentary in its impact on any single operator, is a practical demonstration of how miners can contribute to grid stability under duress, even as the industry faces scrutiny about energy use and sustainability in a broader sense.

What follows is a closer look at the current situation, the data behind the reported curtailments, and the implications for miners, the Bitcoin network, and energy grids.

What to watch next

– Recovery trajectory for Foundry USA’s hash power: Monitor whether the 60% decline is sustained or whether output rebounds as grid conditions normalize and facilities resume normal operations.
– Broader miner response: Track whether other U.S. pools and individual facilities remain in curtailment mode in the near term or begin incremental normalization as Fern weakens.
– Grid and policy developments: Observe any new utility or regulatory actions addressing industrial loads during extreme weather events and how such policies may affect mining operations.
– Network-level indicators: Watch for changes in block production timing and difficulty adjustments as hash power shifts occur across major pools.
– Public disclosures from pool operators: Look for official statements from Foundry USA and peers that detail the rationale for curtailment, the expected duration, and any contingency plans.

Sources & verification

– Hashrate Index pool data showing Foundry USA’s share of the global mining hashrate (about 198 EH/s, ~23% of the total).
– The MinerMag reporting on a roughly 200 EH/s decline in Foundry USA’s hashrate and the resulting ~12-minute block production period.
– The Weather Channel radar and forecast data documenting Winter Storm Fern’s reach and projected impacts on energy grids.
– Cointelegraph explainer material on Bitcoin hashrate and mining operations for context on how hashing power expresses itself across networks.

Rewritten article body: Winter storm Fern tests Bitcoin miners’ resilience and grid balancing

Winter storm Fern tests Bitcoin miners’ resilience and grid balancing

Bitcoin mining operations have once again demonstrated how energy-intensive activities can adapt when the power grid faces systemic stress. Foundry USA, which operates the world’s largest Bitcoin mining pool by hashrate, reported a dramatic pullback in its output as Fern, a severe winter storm, rolls across large portions of the United States. The company’s hashrate has declined by roughly 60% since Friday, amounting to about 200 EH/s of capacity removed from the network in a matter of days. Current estimates place Foundry USA at around 198 EH/s, a figure that still represents a substantial slice of global mining capacity—roughly a fifth of the total, according to Hashrate Index. The immediate effect on on-chain activity has included a lengthening of block times, with estimates indicating an average interval near 12 minutes as miners curtailed operations to reduce stress on the electrical grid.

The proportion of hashing power controlled by Foundry USA—nearly a quarter of the entire mining ecosystem—has made the shutdown particularly noticeable. While the precise daily fluctuations are driven by weather conditions and regional energy policies, the broader trend underscores the role of miners as a dynamic, controllable load resource. This concept, discussed by industry observers and researchers in recent years, positions mining operations as potential partners in grid management rather than as passive consumers of electricity. When demand surges or grid infrastructure is strained, miners can temporarily shut down or scale back their machines, freeing up capacity for households and essential services. Conversely, during periods of lower demand, they can optimize throughput to maximize efficiency and profitability.

The weather-driven curtailment comes amid a broader discussion about energy usage in crypto mining. Operators learned early in the season that grid operators and utilities value flexible demand that can be turned on or off in response to supply conditions. In recent days, reports from The MinerMag have highlighted how other U.S. pools, including Luxor, have also reduced activity in response to Fern. The storm’s impact is not confined to a single facility or pool; rather, it reflects a systemic challenge—how to balance the dual imperatives of maintaining secure, profitable mining operations and supporting energy infrastructure during extreme weather events.

For miners, the ability to modulate energy consumption is a form of risk management. Low demand periods can be used to bring machines online in a controlled manner, while peak demand triggers rapid deenergization to alleviate grid stress. This flexibility can be crucial when grids experience weather-related outages or equipment stress, which in turn reduces the risk of cascading failures in the power system. The Weather Channel’s live radar and forecast coverage of Fern show the storm’s expansive footprint, including intermittent ice and snowfall that complicate both residential power reliability and the operation of large industrial facilities. The well-being of the grid, in this sense, intersects with the economics of mining—an industry that has grown more integrated with regional energy markets as operators seek reliable, cost-effective power sources.

Beyond the immediate weather-driven dynamics, the episode highlights a longer-standing question about how Bitcoin’s network health and security respond to fluctuations in hashrate. The network’s hash rate captures the total computational power devoted to securing the proof-of-work protocol, and shifts in this metric can influence the time required to produce blocks, as well as the difficulty adjustment that follows. The balance between security and energy efficiency remains a central theme for an industry that continues to expand in spite of, and in some cases because of, its energy considerations. The current weather event provides a tangible case study of how major mining centers navigate energy constraints, and it raises questions about how future weather patterns and grid policies could shape mining operational decisions.

In response to Fern, Foundry USA and other pools have demonstrated a willingness to adapt quickly to environmental pressures. The rapid curtailment underscores the capacity of mining operators to act as flexible energy users, a characteristic that could become increasingly valuable as grids around the world confront more frequent extreme weather events. While the long-term implications for the Bitcoin network depend on a range of factors—including macroeconomic conditions, energy prices, and regulatory developments—the immediate takeaway is that mining operations can still function as a stabilizing load under stress while remaining resilient against sudden operational disruptions. As the storm passes and temperatures rebound, the industry will likely reassess its energy strategies, with output levels and grid interactions trending toward a new equilibrium informed by market signals and policy environments.

Why it matters

– The current curtailment illustrates miners’ capacity to operate as flexible grid resources. By modulating demand in response to grid stress, mining operations can help prevent overloads and potential outages during extreme weather events. This adaptive behavior may influence how utilities view large-scale, electricity-intensive industries and could shape policy discussions around energy usage and grid reliability.

– The episode reinforces the geographic concentration of mining activity in the United States and its exposure to domestic weather patterns and energy pricing. While Foundry USA remains a dominant player in the landscape, the incident underscores how localized conditions can impact global hashrate metrics and network dynamics in the near term.

– The situation adds to the ongoing conversation about energy efficiency and sustainability in crypto mining. As the industry expands, the ability to balance grid demand with production becomes a key differentiator for operators and a potential pathway to greater legitimacy with policymakers and the public.

What to watch next

– Short-term hash rate recovery for Foundry USA and other U.S. pools as Fern subsides.
– Any official statements from mining operators detailing the duration and rationale of curtailments.
– Updates on grid resilience measures and utility responses to industrial loads during winter storms.
– Changes in on-chain metrics such as block times and mining difficulty as hash power rebalances.

Sources & verification

– Hashrate Index pool data on Foundry USA’s share of global hashrate and current EH/s figures.
– The MinerMag reporting on the decline in Foundry USA’s hashrate and related block-time observations.
– The Weather Channel radar and forecast data documenting Winter Storm Fern’s reach and projected impacts.

Note: The disclaimer at the end of the original article remains in place to remind readers to verify information independently.

This article was originally published as Deadly US Winter Storm Disrupts Foundry USA and Other Mining Pools on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Introduction
Bitcoin (CRYPTO: BTC) has long been defended as a rules-based monetary system, insulated from the whim of developers. In a recent online post, Michael Saylor, co-founder of Strategy, a Bitcoin treasury firm, argued that the network’s greatest risk lies not in external threats but in “ambitious opportunists” pressing for protocol changes. The exchange spurred a broader debate about how far the core protocol should evolve, pitting proponents of a rock-solid, ossified ledger against developers who want to expand Bitcoin’s features without compromising its security guarantees. The discussion comes amid ongoing conversations about non-monetary data on the chain—ranging from NFTs to on-chain images—that some see as potential use cases and others view as a distraction from Bitcoin’s primary purpose. The dialogue underscores a fundamental tension within the ecosystem: should Bitcoin remain narrowly focused, or should it evolve to address new realities without sacrificing its core properties?

Key Takeaways

The debate centers on whether Bitcoin should ossify to preserve sound money or gradually incorporate features that enable non-monetary data and on-chain storage.

Several prominent figures have weighed in, including Saylor, Bechler, and Mert Mumtaz, highlighting a spectrum of views on how to balance security with innovation.

Quantum risk remains a point of contention, with some warning of future threats and others arguing that the network’s price and security dynamics are not yet driven by such concerns.

Bitcoin Improvement Proposal 110 (BIP-110) is referenced as a temporary mechanism to filter non-monetary data, illustrating the ongoing spam wars and data management challenges on the network.

The discourse reflects broader questions about governance, developer incentives, and the pace at which the protocol should adapt to emerging technologies.

Tickers mentioned: Bitcoin (CRYPTO: BTC)

Sentiment: Neutral

Price impact: Neutral. The conversation signals theoretical risk discussions rather than immediate market moves.

Trading idea (Not Financial Advice): Hold. The debate centers on governance and security trade-offs rather than near-term catalysts.

Market context: The exchange-trade between hardening the protocol and enabling new capabilities sits within ongoing debates about crypto governance, scalability, and risk management as macro and regulatory developments shape risk appetite for digital assets.

Why it matters

The core of the discussion is governance—how Bitcoin should evolve without compromising its foundational properties. Michael Saylor’s framing positions the risk as a governance and philosophy issue: are “ambitious opportunists” pushing for changes that could alter Bitcoin’s monetary characteristics, or can the network absorb selective upgrades that expand functionality while preserving decentralization and censorship resistance? This line of thought has long circulated among Bitcoiners who fear that rapid feature creep could open doors to unintended consequences, including new attack vectors or shifts in the network’s incentive structure.

On the other side, developers and proponents for extended capabilities argue that carefully designed enhancements can make Bitcoin more resilient and useful in a broader ecosystem. The debate touches on topics such as quantum-resistant wallet addresses and on-chain file storage, which some see as practical extensions of Bitcoin’s resilience and uptime. The discussion is not merely theoretical; it has real-world implications for how miners, node operators, and developers allocate time and resources. The tension was underscored by references to Bitcoin Improvement Proposal 110 (BIP-110), a tool discussed as a means to filter out non-monetary data and reduce spam in the legacy ledger. While BIP-110 represents a targeted compromise, it also highlights the broader concern about data management and the potential impact of non-monetary data on block space and security assumptions.

The quantum angle adds another layer of complexity. Some observers believe the emergence of quantum computing could threaten cryptographic foundations, while others insist that the community is already conducting defensive research and that notable price moves are not driven by these fears. The mixed opinions reflect a crypto ecosystem that values both robust cryptography and practical, incremental improvements. The discourse also shows the influence of prominent voices in the space, from investors to developers, each offering different prioritizations for Bitcoin’s trajectory. The debate is ongoing, with no consensus in sight about the optimal balance between a hardened base protocol and strategic feature additions.

Related: Michael Saylor pushes back on criticism of Bitcoin treasury companies

The Bitcoin community continues to debate the quantum threat

Quantum computing remains a provocative topic within the Bitcoin community. Nic Carter, a partner at Castle Island Ventures, has repeatedly warned that Bitcoin must move toward post-quantum standards sooner rather than later. His position underscores a broader concern: future cryptanalytic capabilities could undermine the security of current key types if not addressed proactively. Yet not all voices share this level of urgency. Adam Back, the CEO of Blockstream, has publicly disputed Carter’s assertions, describing them as uninformed while noting that researchers are quietly advancing protective measures. He emphasizes that the community is not denying the risk but is prioritizing a careful, evidence-driven approach to defense rather than alarmist rhetoric.

Market observers have noted that such debates rarely translate into immediate price movements. Bitcoin analyst James Check suggested that concerns about quantum threats have not materially influenced BTC’s market price, pointing instead to long-term holders’ behavior as a more decisive factor in recent price dynamics. The broader takeaway is that the Bitcoin network remains in a phase of introspection about its future development path, with some advocates pushing for more aggressive upgrades and others urging deeper conservatism to preserve the protocol’s core monetary properties.

Source: Michael Saylor

The path forward for Bitcoin governance

At this juncture, the community appears to be navigating a fault line that runs through Bitcoin’s governance framework. On one side are voices urging a form of protocol ossification—maintaining a certifiably scarce, predictable rule set that prioritizes security and monetary integrity. On the other side are developers and researchers who argue for prudent, well-vetted evolutions that can harden the network against future threats and broaden its functional envelope—without compromising decentralization or trustless security. The conversation is not about rejecting enhancements outright; it is about attaining a shared understanding of risk, trade-offs, and the conditions under which upgrades should be pursued.

As this debate unfolds, observers emphasize the importance of transparent research, documented proposals, and clear governance signals. The Bitcoin network operates through a distributed consensus model, and any meaningful change requires broad participation across developers, node operators, and miners. The outcome of these discussions will influence everything from on-chain data practices to potential upgrades that address security and scalability. In the meantime, the ongoing dialogue serves as a barometer for how the community weighs new technologies against a proven, austere monetary system that has operated for over a decade without a centralized authority.

What to watch next

Progress on BIP-110 and any subsequent data-management proposals within the Bitcoin community.

Public statements from Saylor, other Bitcoin proponents, and key developers regarding the balance between protocol rigidity and feature expansion.

Advances in research related to post-quantum cryptography and any practical implementations considered for Bitcoin’s stack.

On-chain data discussions around spam, non-monetary data, and the potential impact on block space and fees.

Regulatory and market responses to the broader debate on Bitcoin governance and future upgrades.

Sources & verification

Michael Saylor’s X post invoking concerns about “ambitious opportunists” and protocol changes.

Statements from Mert Mumtaz on the Bitcoin evolution debate.

Adam Back’s response to the quantum threat debate and his comments on ongoing defensive research.

References to Bitcoin Improvement Proposal 110 (BIP-110) and discussions about spam filtering.

Coverage of quantum-related concerns and the macro context surrounding Bitcoin’s governance discussions, including related Cointelegraph reporting and on-chain discourse.

Key figures and next steps

The conversation is likely to continue as stakeholders weigh the potential benefits of upgrades against the axioms of Bitcoin’s monetary policy. As the community pushes for clarity on governance processes and the timing of any changes, users should monitor official discussions, developer notes, and consensus signals from major participants. The coming months may reveal a more defined stance on whether Bitcoin should embrace broader data usage, how to address the looming quantum threat, and what kinds of upgrades, if any, will be deemed acceptable without eroding trust in the network’s monetary characteristics.

What it means for users and developers

For users and builders, the debate highlights the practical implications of protocol choices. Security remains a primary concern, but the possibility of enhanced features—if implemented with rigorous testing and broad consensus—could expand the ecosystem’s capabilities without sacrificing the properties that have driven Bitcoin’s growth. The path forward will require ongoing dialogue, transparent governance, and a commitment to keeping Bitcoin resilient against both present and future threats.

This article was originally published as Saylor: Opportunists Pushing BTC Changes Are Bitcoin’s Biggest Threat on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Introduction
Tezos (XTZ) has unveiled Tallinn, its latest protocol upgrade, marking a significant step in the network’s ongoing effort to boost throughput and reduce cost. The update, Tezos’ 20th protocol revision, lowers base-layer block times to about 6 seconds and introduces an optimization that could shorten settlement times for on-chain transactions. Central to Tallinn is a shift in how blocks are attested: all network validators, known as bakers, can attest to every block, a change enabled by aggregate BLS cryptographic signatures. The development aims to reduce latency and storage overhead, potentially enabling broader use cases on the Tezos ecosystem.

Key Takeaways
– Tallinn is Tezos’ 20th protocol upgrade and targets faster finality by enabling all bakers to attest to each block, rather than a subset.
– The upgrade uses BLS signatures to aggregate attestations, significantly lightening node workloads and potentially enabling further reductions in block time.
– An address indexing mechanism introduced with Tallinn claims to cut redundant address data, boosting storage efficiency by up to 100x for applications built on Tezos.
– The upgrade aligns Tezos with a broader industry push toward higher-throughput blockchains capable of supporting more complex use cases and faster settlement.
– The changes come amid a wider discussion of layer-2 scaling and modular designs across major networks, as users and developers seek faster, cheaper transactions.

Tickers mentioned: $BTC, $ETH, $XTZ, $SOL

Sentiment: Neutral

Price impact: Positive. The Tallinn upgrade could improve network efficiency and application performance, though it does not constitute financial advice.

Trading idea (Not Financial Advice): Hold. The upgrade signals ongoing maturation of Tezos but does not alone drive investment decisions.

Market context: The trajectory toward faster, more scalable blockchain networks continues to shape the sector, with networks experimenting with tiered architectures, L2 infrastructures, and modular designs to balance security, throughput, and data availability.

Why it matters

Tezos’ Tallinn upgrade underscores the platform’s commitment to closing the gap with higher-throughput networks while preserving on-chain governance and security properties. By enabling every baker to attest to each block through aggregated signatures, Tallinn reduces the computational burden previously placed on individual validators. This design aims to maintain decentralized finality guarantees while enabling faster block production, a combination that could expand Tezos’ appeal for on-chain applications requiring lower latency.

The storage efficiency gain, driven by the new address indexing mechanism, is another notable development. Tezos executives described the improvement as removing redundant address data, claiming storage costs for certain applications can be dramatically reduced—reported as a 100x improvement in storage efficiency. In practical terms, developers and wallets operating on Tezos could see lower infrastructure costs and faster onboarding of users whose interactions generate large address datasets. If the headline efficiency persists in production, it could influence the cost structure of building and running Tezos-based services, potentially supporting broader adoption.

This upgrade also sits within a broader industry context where blockchains are increasingly measured by throughput and finality latency as much as security guarantees. The industry has long recognized the need for scale beyond single-layer base protocols. Some networks pursue layer-2 solutions, including payment channels and rollups, to shoulder transaction execution off-chain while preserving a secure settlement on the base layer. For Bitcoin (CRYPTO: BTC), the system’s typical 10-minute block times have driven development of off-chain networks like the Lightning Network to facilitate payments at higher speeds. The Bitcoin network’s base-layer speed limitations have catalyzed diverse layer-2 approaches, a trend that Tezos appears to be addressing from a different architectural angle.

In the broader ecosystem, Ethereum (CRYPTO: ETH) has pursued a modular approach to scaling, with multiple layers handling execution, consensus, and data availability. By contrast, some monolithic networks, such as Solana (CRYPTO: SOL), aim to consolidate functions into a single layer, a design philosophy that has its own trade-offs. Tallinn’s emphasis on reducing block time and storage overhead illustrates Tezos’ preference for practical throughput gains within a formally governed, proof-of-stake framework.

This progression comes as the sector continues to weigh the balance between on-chain scalability and the user experience, with industry observers highlighting the ongoing importance of improved finality times, lower transaction fees, and better on-chain data efficiency as core levers for broader usage.

What to watch next
– Monitor Tezos baker activity and block finality metrics post-Tallinn to gauge the practical impact of full-block attestations.
– Track the adoption rate of the new address indexing feature and any downstream effects on on-chain storage costs for dApps.
– Review network performance data for changes in latency, throughput, and finality times over the next several network epochs.
– Look for developer feedback and ecosystem tooling updates that integrate with Tallinn’s changes, including wallet and node software support.
– Watch for any subsequent protocol proposals or governance votes that refine or extend Tallinn’s capabilities or address any edge cases encountered in production.

Sources & verification
– Tezos official communications and governance documents detailing Tallinn’s features and objectives.
– Public statements from Tezos project spokespeople regarding BLS-based aggregation and per-block attestations.
– Technical analyses and on-chain data dashboards tracking finality times, attestations, and storage usage post-upgrade.
– Related readings on scaling approaches across major blockchains, including references to Lightning Network and modular vs monolithic architectures.
– Supplementary material on Ethereum’s scaling philosophy and monolithic designs, including industry write-ups and editorial coverage where applicable.

Rewritten article body

Tezos Tallinn upgrade accelerates block finality and storage efficiency

Tezos (XTZ) has rolled out Tallinn, its 20th protocol upgrade, a development that targets faster finality and lower operating costs for applications running atop the network. The upgrade delivers a base-layer block time around six seconds, a meaningful improvement for dApps and users seeking quicker settlement. In a notable architectural shift, Tallinn enables all bakers—Tezos’ validators—to attest to every block. This universal attestation replaces the prior model in which a subset of validators verified blocks, a move designed to reduce attestation latency and distribution overhead.

Spokespeople for Tezos explained that the shift is enabled by a BLS (Boneh–Lynn–Shacham) cryptographic scheme, which aggregates hundreds of signatures into a single one per block. The practical effect is a lighter load on validator nodes and the potential for further reductions in block time as the network grows. “This is achieved through the use of BLS cryptographic signatures, which aggregate hundreds of signatures into just one per block. By lightening the load on nodes, it also opens the door to further block time reductions,” Tezos representatives stated.

Alongside this consensus optimization, Tallinn introduces an address indexing mechanism that trims redundant address data. According to Tezos, the storage efficiency for on-chain data is improved by a factor of 100, a development that could meaningfully lower the cost of running applications and services on the Tezos ecosystem. The approach aligns with a broader industry emphasis on reducing data bloat and improving on-chain storage economics, particularly as developers build more complex and data-intensive dApps on L1 networks.

As the industry continues to pursue faster and higher-throughput blockchain networks, Tallinn’s design choices reflect a pragmatic balance of security, decentralization and performance. The upgrade underscores Tezos’ ongoing evolution within a crowded field that includes discussions around scalable Layer 2s, modular designs and alternative architectures that aim to deliver lower latency without compromising governance or security.

Block times and throughput have seen dramatic shifts since the early days of distributed ledgers. The first generation of blockchains, such as Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), operated at roughly seven and 15–30 transactions per second (TPS), respectively. The Bitcoin protocol targets blocks every ~10 minutes, a cadence that has long limited the feasibility of everyday payments on the base chain. This reality has spurred a spectrum of scaling solutions, with Bitcoin relying on off-chain channels and networks designed to settle the net result later on the base layer. The Lightning Network, for instance, creates off-chain payment channels that can be settled in a single on-chain transaction after a channel closes.

The Ethereum ecosystem has pursued a modular scaling approach, separating execution, consensus and data availability layers and fostering an ecosystem of Layer 2 (L2) networks that handle most transaction execution. In contrast, monolithic blockchain networks like Solana (CRYPTO: SOL) consolidate these functions within a single layer, a design that influences performance, data availability and resilience trade-offs. Tallinn’s emphasis on reducing block time and storage footprint parallels ongoing industry conversations about the best paths to scalability while maintaining robust security and governance — a balance Tezos continues to navigate as it expands its operational footprint.

In parallel, the industry continues to explore how scaling innovations translate into real-world usage. For Tezos, Tallinn could unlock new use cases that demand rapid finality, such as micro-payments, real-time settlement for decentralized applications, and more responsive governance processes that rely on timely on-chain voting and updates. The upgrade, while technical in nature, is a signal of Tezos’ intent to remain competitive by delivering tangible improvements in efficiency and reliability for developers and users alike.

As the ecosystem weighs the implications of these changes, observers will watch for how Tallinn affects dApp performance, wallet operations and the cost structure of on-chain storage. The upgrade is one piece of a wider mosaic in which networks strive to strike a balance between throughput, decentralization and user experience, a balance that ultimately determines long-term viability and adoption.

This article was originally published as Tezos Upgrades to Tallinn; Block Times Drop to 6 Seconds on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Introduction
BitGo Holdings’ public debut on the New York Stock Exchange unfolded with a classic IPO rollercoaster: the digital asset custodian priced its offering at $18 per share, delivering an initial 25% pop on the first day of trading as investors clambered for exposure to crypto infrastructure. Yet the early exuberance cooled swiftly, and the stock drifted into negative territory in the ensuing sessions. By Friday, BitGo’s shares traded below the IPO price, dipping as much as 13.4%, signaling investors’ preference for profit-taking amid a thin public float and a broader unease surrounding crypto-linked equities. At the offer price, BitGo carried an approximate $2 billion valuation, underscoring how even established custody players remain at the mercy of market sentiment, liquidity constraints, and the sector’s regulatory tailwinds.

Key Takeaways

BitGo priced the IPO at $18 per share, valuing the firm around $2 billion at the outset.

Shares surged roughly 25% on the first day of trading but failed to sustain momentum in the subsequent session.

By Friday, the stock had moved below its IPO price, with declines of as much as 13.4% recorded on Yahoo Finance data.

The volatility reflects a combination of profit-taking after an initial rally, a relatively small public float, and ongoing uncertainty surrounding crypto-related equities.

Industry context shows broader momentum for crypto listings despite market headwinds, with Ledger reportedly exploring a US IPO and Kraken pursuing a potential listing after a major funding round.

Recent IPO performance in the crypto space has been uneven, underscoring a fundamentals-driven market despite long-term optimism for infrastructure plays.

Tickers mentioned: $BTG, Bitcoin (CRYPTO: BTC)

Sentiment: Neutral

Price impact: Negative. Initial gains faded quickly as investors booked profits and the stock faced a pullback after the debut.

Trading idea (Not Financial Advice): Hold. A cautious stance is prudent given the IPO volatility and the sector’s sensitivity to risk sentiment and regulatory developments.

Market context: The BitGo IPO comes amid a cautious liquidity backdrop for crypto equities, where investors weigh custody technology, exchange resilience, and regulatory signals against macro risk factors. The crypto IPO landscape has shown both enthusiasm and uneven performance in recent years, with newly listed companies often trading on a combination of strategic potential and market momentum rather than steady earnings visibility.

Why it matters

BitGo’s public listing marks another milestone for a firm that has positioned itself as a cornerstone of crypto custody and infrastructure. As a custodian with more than $90 billion in assets under custody, BitGo’s IPO highlights the ongoing demand among institutional players for secure, regulated on- and off-chain storage capabilities, a niche that remains critical as digital asset markets expand and evolve. The listing also serves as a barometer for investor appetite for crypto-related infrastructure plays, which are increasingly viewed through a fundamentals-first lens rather than purely speculative narratives.

From a market perspective, the early activity around BitGo’s shares illustrates the sector’s bifurcated reality. On one hand, there is a palpable appetite among some investors for legitimate, regulated infrastructure providers that can scale with institutional adoption and evolving custody standards. On the other hand, the sector remains sensitive to risk sentiment shifts, regulatory clarity, and performance comparisons with traditional financial assets. The IPO’s price discovery process — including the initial jump, rapid pullback, and ongoing price path — reflects how market participants are balancing long-term growth expectations with the practicalities of liquidity and governance in a nascent, highly scrutinized market segment.

The broader crypto market narrative also frames BitGo’s debut. Industry chatter around other potential listings — Ledger’s reported consideration of a US IPO with a valuation north of $4 billion, and Kraken’s substantial funding round at a $20 billion valuation — suggests a willingness among prominent players to explore public markets as part of a broader capital-raising and brand-building strategy. Yet, even with these signals, recent crypto IPOs have shown uneven performance, underscoring the importance of a clear business plan and a compelling operational narrative when public markets are scrutinizing every data point. The divergence between optimism about long-term adoption and the volatility of near-term pricing remains a defining feature of crypto equities in the public domain.

As PwC’s IPO expert Mike Bellin noted, the market now appears to be more fundamentals-driven than during previous hype cycles. Investors are asking for sharper storytelling, stronger execution plans, and visible progress toward profitability, even for companies that provide essential infrastructure in a rapidly expanding ecosystem. This dynamic is unlikely to ease in the near term, particularly as macro conditions and regulatory developments continue to shape risk appetite across asset classes. Nonetheless, BitGo’s listing adds a tangible data point to a sector that continues to evolve toward greater legitimacy and resilience, even if the path remains uneven.

In sum, BitGo’s IPO embodies the current crypto-market paradox: clear demand for credible, regulated infrastructure exists, but investors remain selective, wary of dilution, governance, and the pace of growth in a market still negotiating its regulatory and macro footing. The immediate price action may have been volatile, but the longer-term implications will depend on BitGo’s execution, the sector’s capacity to scale custody services, and the broader market’s tolerance for crypto-linked equities in a more disciplined investment landscape.

Source: Matthew, MBA

What to watch next

Ledger’s US IPO plans and potential valuation (reported above $4 billion) and whether a formal filing or timeline emerges.

Kraken’s public-market pathway after raising $800 million at a $20 billion valuation, including any regulatory filings or stated timelines.

Performance of crypto-related IPOs in 2025 and beyond, particularly how recent listings fare against benchmarks like the S&P 500.

BitGo’s ongoing business updates, custody capabilities, and any regulatory milestones that could influence liquidity and investor confidence.

Sources & verification

BitGo IPO news and pricing details from Cointelegraph coverage on the day of listing.

Yahoo Finance data showing intraday and post-IPO trading performance for BTGO.

Market context around crypto-related IPOs and executive commentary from PwC and other sources cited in industry reporting.

Reports on Ledger and Kraken’s funding and potential IPO trajectories from established financial media outlets.

This article was originally published as BitGo Stock Slips After IPO as Crypto Listing Volatility Returns on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

ARK Invest, led by Cathie Wood, is signaling a continued tilt toward crypto-linked equities even as the broader digital-asset market wrestles with volatility. In the latest Friday disclosures, the ARK Innovation ETF (ARKK) added 38,854 shares of Coinbase Global Inc. (CRYPTO: COIN), while the ARK Fintech Innovation ETF (ARKF) bought an additional 3,325 Coinbase shares, totaling roughly $9.4 million in new exposure. The two funds also expanded positions in Circle Internet Group by 129,446 shares and in Bullish by 88,533 shares, representing roughly $9.2 million and $3.2 million in new bets, respectively. Coinbase shares closed the session down 2.77% at $216.95. In the same update, ARK trimmed other holdings, including a 12,400-share exit in Meta Platforms. The day’s activity underscores a deliberate strategy to lean into crypto-sensitive equities amid a sector-wide pullback.

What the moves say about ARK’s stance

ARK’s latest round of trades illustrates a nuanced stance: the fund manager is selectively increasing exposure to crypto-adjacent names while paring back some mega-cap tech bets. The Coinbase purchases, concentrated in ARKK and ARKF, mark a meaningful upweight in a stock that remains a proxy for the broader digital-asset ecosystem, despite the company’s ongoing regulatory and competitive headwinds. Coinbase, a listed exchange operator and a cornerstone of the on-chain economy, has faced episodic volatility tied to crypto price movements, exchange trading volumes, and macro risk sentiment. The price action on the day—closing at $216.95 after a 2.77% decline—frames the environment in which these new positions were taken.

Beyond Coinbase, ARK’s incremental bets on Circle Internet Group and Bullish add to a portfolio tilt that leans into stablecoins and crypto-centric trading ecosystems. Circle Internet Group, the issuer behind USD Coin (USDC), has become a focal point for investors seeking on-chain liquidity and fiat-to-crypto rails, while Bullish, a consumer-facing crypto-exchange platform, offers a different risk-return profile within the ARK family. Together, the new Circle and Bullish allocations—129,446 and 88,533 shares respectively—signal a measured confidence in crypto infrastructure and investor access to digital-asset markets, even as spot volumes and price levels for major assets remain under pressure.

ARK’s broader position in the market also reflects a balancing act: while crypto equities have cooled, ARK’s activity came against a backdrop of a quarterly performance backdrop in which these same equities weighed on the flagship funds. In late 2025, ARK highlighted crypto-linked equities as a primary source of weakness across its products, with Coinbase acting as a notable drag on ARKW, ARKF, and ARKK. The firm noted that Coinbase shares fell more sharply than benchmark crypto assets like Bitcoin (CRYPTO: BTC) and Ether (CRYPTO: ETH) as centralized-exchange volumes declined following a liquidity event in October.

ARK’s longer-term thesis: a $28 trillion crypto market by 2030

ARK has continued to articulate an ambitious, long-horizon case for crypto: a market that could reach as much as $28 trillion by 2030, driven by rising institutional participation and expanding use cases for digital assets. In its Big Ideas 2026 report, ARK projected a 61% compound annual growth rate for the crypto market, with Bitcoin accounting for a substantial portion of overall value. The analysis suggests a scenario in which the number of mined Bitcoins climbs, potentially to about 20.5 million by 2030, which could support a Bitcoin price range stretching from roughly $950,000 to $1 million under certain conditions. The report also pointed to growing ETF and corporate-held positions as factors that could help sustain broader adoption, lending credibility to ARK’s willingness to accumulate exposure in crypto-linked equities during periods of dislocation. The firm’s forecast underscores a view that the secular rise of crypto networks and institutional engagement could offset cyclical volatility in prices and trading volumes.

Market dynamics and what’s driving allocations

ARK’s recent moves come at a moment when crypto markets experienced a meaningful downturn in the fourth quarter of 2025, prompting broader scrutiny of crypto equities. The sector’s pullback has historically exerted pressure on ARK’s internet and fintech-themed portfolios, which include technology platforms that interface with digital assets and blockchain-based protocols. The Coinbase-specific drag during the period—outpacing the declines in spot BTC and ETH—illustrates how sentiment around on-ramp and liquidity venues can influence returns, even when the underlying technology remains central to the long-term thesis. Investors should note that ARK’s approach appears less about quick rotations and more about building a position that can participate in a potential rebound as adoption accelerates and regulatory clarity evolves.

Meanwhile, the broader ecosystem continues to reward players who suit up for infrastructure and services that enable on-chain activity. Circle’s USDC and Bullish’s trading services sit at a nexus of retail participation and institutional demand, a dynamic that could help explain why ARK chose to increase exposure to these specific assets. The addition of nearly 130,000 Circle shares and almost 90,000 Bullish shares signals a confidence in the ecosystem’s capacity to sustain activity through cycles of volatility, while also acknowledging that near-term performance may hinge on macro liquidity and crypto-specific catalysts.

What to watch next

Next ARK disclosures and quarterly updates to gauge whether the crypto-weighted theme remains a priority or if profits are reallocated into other areas.

Movement in Coinbase, Circle, and Bullish stock prices as the crypto market digests regulatory news, institutional flows, and on-chain adoption metrics.

Updates to ARK’s Big Ideas 2026 and any revisions to its $28 trillion by 2030 forecast or Bitcoin price scenarios.

Regulatory developments that could affect exchange operators, stablecoins, and crypto-asset custody solutions.

Why it matters

The ARK trades highlight a broader market dynamic: long-duration investors are balancing a belief in transformative technologies with the immediacy of price and liquidity pressures. By increasing exposure to Coinbase, Circle, and Bullish, ARK signals that it views crypto infrastructure and on-ramps as essential components of a mature digital-asset economy. This stance matters for holders of crypto assets and the ecosystem’s builders because it reflects a potentially enduring commitment to the assets and platforms that enable mainstream participation in crypto markets. It also serves as a potential signal to other institutional players that well-capitalized funds are willing to re-enter or expand positions in crypto equities during periods of weakness, which could influence future pricing and volatility in the space.

However, the trajectory remains uncertain. The performance drag attributed to Coinbase during the quarter—driven by reduced spot volumes and external market shocks—serves as a reminder that short-term fluctuations can diverge markedly from long-run structural growth. For investors, the takeaway is that ARK’s approach blends tactical exposure with a strategic narrative: crypto networks and their associated financial rails have fundamentals that could outperform if regulatory clarity improves and institutional adoption accelerates. In that context, ARK’s latest moves are less a bet on a quick rebound and more a disciplined allocation to entities positioned to benefit from a multi-year expansion in the crypto economy.

What to watch next

Follow-up disclosures on ARK’s next set of trades and any shifts in the proportion of crypto equities within ARKK and ARKF.

Monitor Coinbase, Circle, and Bullish for updated earnings, user growth metrics, and changes in on-chain activity that could influence sentiment.

Watch for regulatory updates affecting stablecoins, exchanges, and custody solutions, which could shape the profitability and risk profile of crypto-linked equities.

Sources & verification

ARK daily trade disclosures detailing purchases of Coinbase (ARKK and ARKF) and increases in Circle and Bullish shares.

Coinbase price data showing the 2.77% move to $216.95 in the session referenced.

ARK’s quarterly report noting crypto-linked equities as a source of weakness and the role of Coinbase as a detractor.

ARK’s Big Ideas 2026 report outlining the $28 trillion crypto market forecast and Bitcoin’s share of value.

This article was originally published as ARK Invest Buys Coinbase and Circle as Crypto Stocks Slide on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Introduction

The pace of U.S. crypto regulation paused this week as lawmakers postponed the markup of the Digital Asset Market Clarity Act (CLARITY), leaving key questions about how decentralized finance and related technologies will be regulated unresolved. Industry voices argued that proposed amendments risk forcing centralized-style controls onto decentralized systems, potentially pressuring developers and infrastructure providers to implement Know Your Customer requirements or register with financial regulators. The delay followed broad sector pushback, including opposition from prominent policymakers and industry leaders, and a public rebuke from Coinbase Chief Executive Officer Brian Armstrong, prompting Senate Banking Committee Chair Tim Scott to call for a “brief pause.”

Key Takeaways

The CLARITY markup was postponed as industry groups warned that new amendments could impose unsuitable compliance requirements on decentralized networks.

Ethereum co‑founder Vitalik Buterin urged a redesign of DAO governance to better support infrastructure such as oracles, dispute resolution, and long-term stewardship, arguing token-voting models are inefficient for on-chain systems.

Pendle announced a governance revamp, phasing out vePENDLE in favor of a liquid staking and governance token, sPENDLE, with a shorter unwinding period to boost participation.

The SEC’s crypto task force received new submissions advocating for clarified self-custody rights and a nuanced approach to tokenized assets and DeFi activity within market structure rules.

Aave redefined its role in DeFi governance by transferring Lens Protocol stewardship to Mask Network, highlighting ongoing shifts in DeFi collaboration and governance workstreams.

Market data showed broad weakness among major cryptocurrencies over the week, with notable declines in certain DeFi tokens as liquidity and risk sentiment remained strained.

Tickers Mentioned

Tickers mentioned: $WHITEWHALE, $MERL, $PENDLE

Sentiment

Sentiment: Neutral

Price impact

Price impact: Neutral. The regulatory delay and governance shifts create a mixed picture for near-term prices, with some tokens facing specific adjustments while broader sentiment remains cautious.

Trading idea (Not Financial Advice)

Trading idea (Not Financial Advice): Hold. Given the policy and governance dynamics, a patient stance can help observers assess how regulatory clarity and protocol upgrades unfold before making directional bets.

Market context

Market context: The week’s events occurred amid a broader environment of regulatory scrutiny, ongoing discussions around self-custody and market structure, and evolving governance models in DeFi. Traders and developers remain attentive to how Congress, regulators, and industry groups navigate the balance between investor protections and the resilience of decentralized networks.

Why it matters

Regulatory clarity is a guiding force for the crypto sector, influencing where capital flows, how projects structure their compliance approaches, and which innovation models survive in a potentially stricter environment. The CLARITY postponement underscores the complexity of regulating decentralized technologies that rely on global participation and permissionless innovation. For developers, the ambiguity around obligations—such as KYC or registration for DeFi infrastructure—can affect timelines, funding, and the feasibility of open-source contributions. The industry’s response—from Paradigm and Variant to Coinbase—highlights a broader concern: policy proposals must preserve the decentralized nature of many protocols without exposing builders to onerous, centralized compliance burdens that could curb experimentation.

Meanwhile, governance design remains a live debate within the ecosystem. Vitalik Buterin’s call for purpose-built DAOs emphasizes the need for structures that can manage on-chain disputes, data reliability through oracles, and insurance decisions without triggering governance fatigue or centralization pressures. If adopted, such models could redefine how critical infrastructure is governed, potentially elevating resilience and accountability beyond mere token-weighted voting. Yet the tension between participation, whale influence, and privacy protections continues to shape the feasibility of new designs.

On the project side, Pendle’s move to replace vePENDLE with sPENDLE represents a practical effort to lower participation barriers and expand interoperability. By enabling withdrawals after a 14-day unwind, the protocol aims to attract more users and integrate with other DeFi builders, while still preserving a framework for governance rewards and token buybacks—allocations that can incentivize long-term participation without stalling decision-making.

Regulatory submissions to the U.S. Securities and Exchange Commission add to a crowded landscape of negotiations between policymakers and industry advocates. Proposals highlighting self-custody rights, alongside arguments that tokenized equities and DeFi assets traded from one’s own account should not automatically be treated as regulated dealers, reflect a push for nuanced classifications that can accommodate innovation while safeguarding investors. These filings are part of a broader, ongoing dialogue about how to square evolving markets with existing securities laws and investor protections.

In parallel, Aave’s decision to hand Lens Protocol stewardship to Mask Network signals a shift in how DeFi platforms collaborate on user-facing products while preserving open, permissionless core architectures. Ethereum co‑founder Buterin welcomed this move, noting that decentralized social networks built on shared data layers can foster competition and more open discourse—a reminder that governance and social connectivity are increasingly interwoven in the DeFi space.

From a market perspective, the week’s price action reflected broader risk-off sentiment. Data aggregators indicated that most of the top 100 cryptocurrencies ended the week lower, with volatility distributed unevenly across assets. Tokens tied to DeFi, including those previously highlighted in market summaries, faced notable declines, illustrating how liquidity and risk appetite shape the short-term performance of a sector still seeking clearer regulatory direction.

For observers, these developments—policy pauses, governance experiments, and strategic realignments—collectively shape the trajectory of DeFi in 2026. As debates about self-custody, decentralization, and compliant innovation continue, the coming months will test whether the ecosystem can advance governance sophistication and regulatory clarity without sacrificing the open, permissionless principles that many projects argue drive long-term value.

Continue reading: Continue reading

Continue reading: Continue reading

Continue reading: Continue reading

Continue reading: Continue reading

Continue reading: Continue reading

What to watch next

Progress on the CLARITY markup: whether a revised draft gains broader support in Congress and aligns with industry concerns.

Details of Vitalik Buterin’s proposed DAO redesigns and whether specific implementations gain adoption across infrastructure projects.

Pendle’s deployment of sPENDLE and the outcomes of its 14-day unwind desk, including governance participation metrics.

SEC submissions’ impact on self-custody protections and the regulatory classification of tokenized assets and DeFi activity.

The Lens-to-Mask Network transition: practical outcomes for user-facing services built on Lens Protocol and the health of cross-project governance collaborations.

Sources & verification

Official statements and public remarks from lawmakers and regulators regarding the CLARITY markup and self-custody rules.

Verbatim filings and submissions to the U.S. Securities and Exchange Commission’s crypto task force addressing self-custody and DeFi regulation.

Pendle’s governance update announcements detailing the vePENDLE phase-out and introduction of sPENDLE with unwind mechanics.

Strategic announcements around Aave’s stewardship of Lens Protocol and the partnership with Mask Network.

Market data and weekly DeFi overviews from Cointelegraph Markets Pro and DefiLlama for context on liquidity and TVL trends.

Key figures and next steps

Regulatory pause, governance rethink and DeFi shifts define the week

The week’s headline event was the postponement of the CLARITY markup, a move that has broad implications for how crypto assets and DeFi technologies will be regulated in the United States. Industry groups warned that the proposed amendments could impose regulatory requirements ill-suited to decentralized systems, potentially impacting developers and infrastructure providers who operate outside traditional centralized models. The debate intensified after Coinbase’s leadership publicly voiced concerns, prompting Senate Banking Committee Chair Tim Scott to announce a “brief pause” to reexamine the draft and its intended safeguards.

In the wake of regulatory friction, Vitalik Buterin pressed for a more granular approach to on-chain governance. He argued that most DAOs have devolved into token-voting treasuries that inadequately address infrastructure needs. Instead, he proposed purpose-built governance structures designed to manage core functions such as oracles, dispute resolution, and long-term project stewardship. He cautioned that participation gaps, whale influence, and decision fatigue could erode governance quality unless complemented by privacy measures, restricted AI assistance, and smarter governance design. The debate highlights a broader shift toward governance models that balance input from diverse participants with the need for decisive execution.

Pendle’s governance revamp represents a concrete step toward broader participation. By phasing out vePENDLE and introducing sPENDLE—a liquid staking and governance token—the protocol aims to streamline voting, reduce entry barriers, and promote interoperability with other DeFi protocols. The new design includes a 14-day unwinding period to facilitate smoother integrations and ongoing participation. Pendle also contemplates allocating a substantial portion of protocol revenue to governance rewards and buybacks, signaling a strategy to align incentives with long-term protocol health.

Conversations around regulation continued with new SEC submissions that stress the importance of protecting self-custody rights while ensuring that nuanced interpretations of tokenized assets and DeFi activity do not inadvertently stifle innovation. The filings reflect a broader push for a measured path to market structure rules—one that preserves investor protections without constraining the growth of decentralized ecosystems.

Aave’s decision to hand Lens Protocol stewardship to Mask Network marks a notable shift in DeFi governance dynamics. This arrangement positions Mask Network to lead consumer-facing development while maintaining Lens Protocol’s core infrastructure as open and permissionless. The move, welcomed by Buterin, underscores a belief that decentralized social networks and shared data layers can reinforce competition and enrich online discourse, reinforcing the broader theme that governance and social interfaces are increasingly central to DeFi’s evolution.

Market performance over the week reflected continued risk-off sentiment among investors. While broad activity remains volatile, DeFi assets showed particular sensitivity to regulatory news, liquidity conditions, and venture funding signals. Some tokens experienced pronounced declines, reminding participants that regulatory clarity remains a gating factor for capital deployment and innovation in this rapidly evolving space.

As policymakers, industry groups, and protocol builders navigate these interlocking issues, the path forward will be shaped by the degree to which regulation can protect investors while preserving the decentralized ethos that underpins much of the crypto ecosystem. The coming months will be pivotal in determining whether governance innovation paired with clearer rules can help DeFi mature without sacrificing openness and composability.

This article was originally published as DeFi Leaders Push Back as DAO, Governance and Custody Debates Spike on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Colombia’s AFP Protección, the country’s second-largest private pension and severance fund manager, is preparing a measured foray into crypto exposure through a new investment fund focused on Bitcoin. The move was confirmed by Juan David Correa, president of Protección SA, in an interview with Valora Analitik. Access to the product will be restricted and delivered through a personalized advisory process designed to gauge each investor’s risk tolerance. Only clients who meet specific criteria will be able to allocate a portion of their portfolios to Bitcoin (CRYPTO: BTC). Correa underscored diversification as the core objective, noting that qualified participants would have the option to expose a portion of their holdings to this asset class. The initiative marks a notable step for the Colombian pension sector as it contemplates digital assets within a carefully structured risk framework.

Protection of core investments remains intact: the Bitcoin-linked fund is positioned as an optional diversification tool rather than a rewrite of traditional pension allocations.

Protección’s approach mirrors a precedent set by Skandia Administradora de Fondos de Pensiones y Cesantías, which began offering Bitcoin exposure in September of the prior year, making Protección the second major Colombian pension administrator to enter the crypto space.

The broader Colombian pension-fund landscape has grown substantially, with mandatory funds reaching over 527 trillion pesos as of November 2025 and roughly half of that sum invested abroad, illustrating a trend toward global diversification within a regulated framework.

Regulatory developments in Colombia are advancing crypto compliance, as the tax authority (DIAN) rolled out a mandatory reporting framework that aligns with the OECD’s Crypto-Asset Reporting Framework (CARF), signaling a move toward standardized cross-border tax information sharing.

Tickers mentioned: $BTC

Sentiment: Neutral

Price impact: Neutral. The introduction of a crypto-linked fund as a diversification tool is unlikely to exert immediate broad-based price pressure on Bitcoin, though it could influence participation among high-net-worth or institutionally aligned investors.

Trading idea (Not Financial Advice): Hold. The product represents a cautious, governance-driven exposure for qualified clients within a disciplined, advisory-led framework.

Market context: The Colombian pension sector is navigating a growing appetite for alternative assets while tightening regulatory oversight. The DIAN framework and CARF alignment reflect a broader, global push toward transparent reporting and cross-border data sharing, even as pension managers weigh the potential benefits of crypto exposure against risk controls and liquidity considerations.

Why it matters

The shift by Protección taps into a broader trend where institutional investors in Latin America are re-evaluating their exposure to digital assets within tightly managed risk parameters. While traditional assets—fixed income, equities, and other conventional holdings—remain the backbone of Colombian pension portfolios, the addition of a Bitcoin-linked option provides a new tool for diversification. For a market where Protección already oversees substantial assets (more than 220 trillion Colombian pesos, or roughly $55 billion, for millions of clients across mandatory and voluntary plans and severance accounts), the ability to offer a carefully scoped crypto exposure could affect how risk is managed and how portfolios are constructed over time.

The move also puts a spotlight on the regulatory environment governing crypto in Colombia. The country’s decision to require crypto service providers to collect and report user and transaction data under the DIAN framework, and its alignment with CARF, creates a more predictable compliance landscape. This reduces the regulatory stigma around crypto investments in institutional portfolios and helps build a framework in which pension funds can explore digital assets with clearer due diligence standards. The regulatory backdrop matters because it shapes the degree to which institutions will ramp up participation, and it informs how products like Protección’s fund are designed, priced, and monitored.

From a market perspective, Colombia’s pension fund sector is sizable and evolving. The broader mandatory fund market reached 527.3 trillion pesos as of November 2025, with nearly half of those assets held abroad, indicating that asset owners and managers are already comfortable with international exposures. In this context, a diversified approach that includes a calculated crypto allocation may be viewed as a method to manage currency risk, inflation hedging, or return volatility, particularly in periods of macro uncertainty. The addition of Bitcoin as an exposure option—under a strict advisory process and with clearly defined limits—could influence how other pension managers think about balancing traditional and alternative assets in the coming years.

Ultimately, Protection’s initiative signals a cautious, governance-forward acceptance of digital assets within Colombia’s institutional landscape. It reflects a broader pattern in which pension funds and other large-scale investors test the waters of crypto through structured products, rather than abrupt, whole-portfolio shifts. The emphasis on diversification and risk profiling suggests that the fund will be used selectively, potentially attracting clients who are already comfortable with crypto or those seeking to add a measured layer of digital exposure to their diversified portfolios. The approach aligns with a global trend among experienced asset managers who favor managed exposure as a bridge to more progressive crypto adoption, rather than an outright pivot away from traditional asset classes.

What to watch next

Follow Protección’s annunciation of eligibility criteria and the number of clients who gain access to the Bitcoin-linked fund through the advisory process.

Monitor the implementation and enforcement of Colombia’s DIAN crypto reporting framework by exchanges, custodians, and intermediaries, and any ensuing guidance from regulators on CARF alignment.

Track further moves by Colombian pension managers into digital assets, including whether Skandia and others expand their crypto programs or introduce new products.

Observe changes in the overall asset mix of Colombian pension funds, especially any shifts in offshore allocations and the impact on risk-adjusted returns.

Watch for market commentary from policymakers and industry groups regarding the role of crypto in retirement portfolios and any potential regulatory adjustments that could affect product design or access thresholds.

Sources & verification

Statement by Juan David Correa, president of Protección SA, in an interview with Valora Analitik about Protección’s Bitcoin-linked fund and access criteria.

DiAN’s introduction of a mandatory crypto reporting framework and the alignment with the Crypto-Asset Reporting Framework (CARF).

Historical note on Skandia Administradora de Fondos de Pensiones y Cesantías offering Bitcoin exposure in September of the previous year.

Data on Protección’s asset base (over 220 trillion COP) and Colombia’s pension market size (527.3 trillion COP as of November 2025) with offshore allocations.

Context on related industry developments and market conditions as described in the source material.

Bitcoin exposure fund marks cautious diversification for Colombian pensions

Colombia’s pension landscape is increasingly testing the boundaries of traditional asset classes, guided by a disciplined, risk-aware framework. The initiative by AFP Protección to introduce a Bitcoin-linked fund through a highly selective advisory process represents a deliberate approach to diversify within defined limits rather than a wholesale reallocation of capital. The emphasis on client suitability, risk assessment, and portfolio prudence underscores how institutional players are balancing the potential upside of digital assets with the necessity of safeguarding a broad base of retirement savings. As regulatory clarity deepens and more pension administrators explore crypto offerings, the Colombian market may see a gradual, incremental integration of digital assets into conventional portfolios, with ongoing scrutiny to ensure that risk controls keep pace with evolving asset classes.

This article was originally published as Colombia’s Pension Giant AFP Protección Expands Bitcoin Exposure on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Introduction
Polymarket bettors are pricing in a 77% probability of a new US federal government shutdown by January 31, a jump of about 67% in just 24 hours. The spike unfolds as lawmakers push the CLARITY Act, a core crypto-regulatory proposal that has stalled amid the fallout from the record-long shutdown that dominated Washington late last year. Senate Democrats led by Chuck Schumer signaled they might block progress on the broader appropriations bill if funding for the Department of Homeland Security is attached, injecting political risk into crypto policy discourse. The week’s headlines also featured a Minneapolis incident and renewed debate over regulation, with Coinbase (EXCHANGE: COIN) CEO Brian Armstrong warning that an inadequate bill could undermine competitiveness in the sector. President Donald Trump also floated the possibility of another shutdown, underscoring ongoing political volatility that could spill into digital-asset policy.

Key Takeaways

Polymarket’s odds of a January 31 US government shutdown reached roughly 77%, rising 67% over the previous 24 hours.

The CLARITY Act remains in flux in Congress, with delays tied to the last shutdown and uncertainty about a second markup window (4–6 weeks is cited by some observers).

Senate Democrats stated they would not provide votes to proceed with the appropriations bill if DHS funding were included, complicating the regulatory path for crypto reform.

Coinbase (EXCHANGE: COIN) CEO Brian Armstrong cautioned that the current draft of the CLARITY Act could be materially worse than the status quo, potentially eroding the industry’s competitive position.

Former President Trump suggested another potential shutdown could occur, highlighting the persistent political volatility shaping regulatory expectations.

Tickers mentioned: $COIN

Sentiment: Neutral

Price impact: Neutral. The activity reflects political risk pricing into a crypto-regulatory framework rather than immediate asset moves.

Market context: The episodes illustrate how US budget dynamics and regulatory policy intersect with crypto markets, particularly around stablecoins and market structure debates that influence investor confidence and liquidity.

Why it matters

The ongoing dialogue over the CLARITY Act sits at the crosscurrents of policy clarity and crypto innovation. When lawmakers grapple with the text of crypto legislation, market participants monitor how changes could affect stablecoin yields, custody standards, and the broader framework governing digital assets. The price action in the Polymarket derivative reflects traders’ interpretation of who might win or lose in negotiations that could reshape market structure, funding, and enforcement expectations. A cleared timetable for a markup or the introduction of a revised bill could alter how firms plan product launches, risk controls, and lobbying strategies.

Industry players have voiced concerns about the bill’s current form. Armstrong’s warning that the version in circulation could be worse than the status quo underscores a broader industry demand for thoughtful, workable regulation rather than haste. The conversation is not purely aspirational; it carries real implications for competitiveness, innovation, and capital allocation within crypto markets. As lawmakers weigh compromises, operators and investors will continue to calibrate risk appetite in light of potential shifts in stablecoin policy, exchange rules, and the treatment of digital assets in light of traditional financial regulation.

Beyond policy specifics, the political environment—exemplified by remarks from Schumer and other leaders—affects how the market prices risk in the sector. The shutdown discourse is a reminder that legislative inertia can slow the deployment of frameworks that many in the crypto industry view as essential for legitimacy and mainstream adoption. In parallel, the regulatory dialogue remains interconnected with other market forces, including macro risk sentiment and the performance of crypto-related investment products, which have themselves faced their own cycles of inflows and outflows that reflect broader investor appetite for digital assets.

What to watch next

Progress on the CLARITY Act: whether a second markup will occur within the proposed 4–6 week window and what revisions might be introduced.

Senate negotiations on DHS funding: whether a path exists to attach or sever DHS funding from the broader appropriations bill.

Industry responses: how major crypto firms and lobbyists adjust messaging and position as versions of the bill evolve.

Polymarket odds updates: whether the market assigns greater or lesser probability to a shutdown as political signals shift.

Public statements from Coinbase and other crypto executives: any new commentary on how policy design could affect market structure and competitiveness.

Sources & verification

Polymarket event page: “Will there be another US government shutdown by January 31.”

Senate Democratic Leader Chuck Schumer’s public stance on DHS funding and bill progression (X post).

CBS News Minneapolis shooting coverage for contemporaneous context on the week’s headlines.

Fox Business interview excerpts with former President Donald Trump discussing potential future shutdowns.

Coinbase (EXCHANGE: COIN) CEO Brian Armstrong’s comments on CLARITY Act proposals (Cointelegraph).

Public discussions around the 43-day US government shutdown and its influence on legislative timing and crypto policy.

Market reaction and regulatory drift: Polymarket odds surge as CLARITY Act stalls

Polymarket’s latest pricing reveals a market that is increasingly tethered to political outcomes rather than purely financial indicators. The platform’s odds for a January 31 government shutdown sit near 77%, a striking 67% advance over the prior day, illustrating how policy risk can translate into derivative markets that price in legislative uncertainty. The slam of headlines surrounding budget fights and crypto-regulatory debates has created a nucleus of speculative activity that reaches beyond traditional asset classes, reflecting traders’ expectations about which side of the aisle will shape crypto policy in the coming weeks.

Central to the debate is the CLARITY Act itself. The bill, designed to clarify the regulatory environment for digital assets, has faced persistent delays in Congress, with aides pointing to the fallout from the last shutdown as a complicating factor. Observers have framed the timeline for a markup as a litmus test for how seriously lawmakers intend to advance crypto reform this session. Galaxy Digital’s Alex Thorn highlighted industry concerns about stablecoin yields within this dynamic, noting that the banking lobby’s position on competition could influence the bill’s reception and ultimate form.

The political dynamics around DHS funding add another layer to policy considerations. Schumer’s assertion that senators will withhold votes to proceed with the appropriations package if DHS funding is included signals that partisan fault lines could stall or reshape the bill’s trajectory. In parallel, a broader political conversation—spurred by remarks from other leaders and a series of high-profile media appearances—continues to inject uncertainty into how and when crypto policy will crystallize. The impact on market participants is not limited to speculative bets; it touches on product development, investor confidence, and the long-run path to regulatory legitimacy for digital assets.

From a market structure perspective, industry voices have urged that any regulatory framework should preserve incentives for innovation while providing clear guardrails. Armstrong’s argument—that the current draft could undermine the competitive position of the sector—embodies a broader plea for balanced regulation that protects consumers without stifling growth. As lawmakers weigh compromises and revisions, the crypto industry will be watching closely to see whether a bipartisan path emerges or if political gridlock prolongs the status quo. The outcome will help define how digital assets and associated services are integrated into the traditional financial system in the years ahead.

This article was originally published as Polymarket Odds Surge to 77% for January US Government Shutdown on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Bloomberg Intelligence strategist Mike McGlone has shifted his stance on Bitcoin and the broader cryptocurrency space, urging investors to “sell the rallies” in 2026 amid a changing macro backdrop. In a contrarian read of the market, he argues that the conditions that once supported a Bitcoin thesis have evolved: what started as a scarce disruptor has become enmeshed in a crowded, highly speculative ecosystem, with correlations to equities rising and macro forces feeding traditional markets. McGlone also warns that the rise of exchange-traded funds (ETFs) and periods of subdued volatility may presage a period of renewed fragility rather than a renewed bull phase.

His view stretches beyond crypto, painting a stark macro canvas for equities, commodities and precious metals. He suggests that gold’s recent rally could reflect systemic stress rather than pure strength, and he quips that when “the stupid rock” outperforms everything else, it’s a signal that investors should recalibrate risk. The interview containing his remarks is available to watch via YouTube.

Bitcoin (CRYPTO: BTC) has long been positioned by some observers as a hedge or a digital store of value, but McGlone contends that the asset now sits more firmly inside the fabric of traditional markets. He points to its evolving correlation with stocks and other risk assets as evidence that the crypto market is no longer insulated from the same macro dynamics that drive risk-on and risk-off cycles in conventional asset classes. In his view, the notable shift has broad implications for how investors should approach positioning in 2026 and beyond.

The commentary arrives at a time when equipment for a possible crypto regime shift is in focus for market participants. McGlone highlights a string of ETF approvals as well as historically low volatility as early warning signals—features that, in his assessment, can both attract new entrants and intensify speculative behavior. The net effect, in his framework, is that Bitcoin has moved from a hedge against the system to a component within it, altering the risk calculus that previously underpinned its narrative.

Beyond the crypto space, McGlone draws a wider map of the investment landscape. His macro lens suggests that stocks, commodities and even gold could be traversing a more delicate phase, with gold’s rally potentially masking thinner liquidity or growing fragility in real economies rather than signaling a broad-based uptrend. He emphasizes that the market’s most dramatic moves often come when conventional hedges falter, and that history has shown time and again how complacency around volatility can precede sharper drawdowns.

“When the stupid rock starts outperforming everything else, investors should pay attention,” McGlone remarks, underscoring the paradox that even familiar assets can become signals of a cooler macro environment if they diverge from those established narratives. The full interview, which delves into Bitcoin’s possible downside scenario and the signals he is watching instead, is available to view on YouTube.

Related: Bitcoin rolls over as gold gets huge $23K price target by 2034

[Disclosures omitted for brevity.]

This article was originally published as Bitcoin Trade Over? Bloomberg Strategist Predicts 2026 Macro Outlook on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Introduction

<pUS-based spot Bitcoin ETFs extended their outflow streak to five sessions as crypto sentiment remains fragile. On Friday, these funds recorded $103.5 million in net withdrawals, continuing a movement that began a week earlier. Over the five-day span, including a four-day US trading week shortened by Martin Luther King Jr. Day, total outflows reached roughly $1.72 billion, per data from Farside. The market backdrop shows BTC testing key psychological levels without breaking above $100,000 since mid-November, with the spot price around $89,160 at the time of publication. In this environment, ETF flows are often watched as a barometer for retail interest and potential near-term price direction.

To illustrate price dynamics, a secondary data point from CoinMarketCap shows Bitcoin has not breached the $100,000 threshold in months, underscoring a broader risk-off tendency even as some market participants await a more definitive trend reversal. The combination of persistent outflows and subdued price action has shifted attention to sentiment indicators that capture how participants are reacting as liquidity conditions tighten and macro narratives evolve.

The Index has been in “Extreme Fear” territory since Wednesday. Source: alternative.me

The focus on spot ETF flows lies in measuring retail appetite and gauging whether a near-term bottom could emerge for Bitcoin in the coming weeks, even as near-term risk sentiment remains fragile.

The crypto market is in a “phase of uncertainty,” says Santiment

The broader crypto market has been drifting lower in recent sessions. The Crypto Fear & Greed Index registered an “Extreme Fear” score of 25 in its latest update, signaling a risk-off stance among many investors. According to Santiment, the market appears to be in a plateau of uncertainty, with retail traders retreating while allocations favor more traditional asset classes. The firm noted that a potential turnaround could materialize in the near term if price dynamics and on-chain signals begin to align more favorably.

“The best move is probably patience.”

In a subsequent note, Santiment emphasized that quieter indicators—such as supply distribution trends and reduced social chatter—could hint that a bottom might be forming, even as the current environment calls for caution. The persistence of volatility and the absence of a compelling catalyst continue to shape market psychology.

In a separate view, Nik Bhatia, founder of The Bitcoin Layer, highlighted that sentiment could be influenced by broader metal markets. In a Saturday post on X, he argued that gold’s rally extends the disconnect between traditional assets and crypto performance. “With gold practically $5,000 and silver at $100, the sentiment in Bitcoin is so poor due to being left out of the metals rally that it almost feels like post-FTX $17,000 bear vibes,” he said. While he maintained an overall bullish stance, he cautioned that fear remains a dominant driver of current price action.

Other observers have cautioned that the prevailing mood in the market may require time to resolve. Bob Loukas, a crypto analyst, suggested that sentiment could be primed for a countertrend rally, noting that the downside has endured for some time and that a corrective move may be overdue.

As the market digests these signals, traders are watching for clearer catalysts that can shift the trajectory of spot BTC ETF flows and the broader crypto market.

The discussion above reflects a landscape where price action and sentiment are in a fragile balance, with investors weighing the implications of outflows against potential supportive signals from on-chain activity and macro liquidity trends.

Why it matters

The ongoing outflows from US spot BTC ETFs matter because they offer a visible proxy for retail appetite in a market that has often been driven by a mix of leverage, institutional interest, and macro risk sentiment. When ETFs see sustained redemptions, it can signal a preference for risk-off assets and a cautious stance among retail participants, which, in turn, can weigh on near-term price performance for Bitcoin. The benchmark for measuring retail behavior—ETF flow data—has historically provided clues about potential price movements, especially when combined with on-chain activity and macro developments.

Moreover, the convergence of softer sentiment indices and lower trading activity can shape risk management decisions across the space. Traders and institutions alike monitor Fear & Greed signals and on-chain distribution patterns to identify if a bottom is forming, or if further capitulation could unfold before a meaningful recovery. In this context, the dialogue around whether Bitcoin can rejoin a risk-on rotation or remains tethered to traditional asset cycles remains unsettled. The intersection of ETF flows, macro liquidity, and evolving regulatory expectations will likely influence how market participants position themselves in the near term.

For builders and investors, the current environment underscores the importance of liquidity resilience, clear product design around spot exposures, and robust risk controls, particularly when price momentum shifts are often driven by non-fundamental catalysts. While some voices in the community remain cautiously bullish, the narrative remains data-driven and cautious rather than speculative, as participants temper expectations while awaiting more definitive signals.

What to watch next

Next week’s spot BTC ETF flow data to assess whether outflows persist or begin to reverse.

Bitcoin price movement around the mid-to-high $80,000s and whether a break toward the $90,000 level gains traction.

Updates to the Fear & Greed Index and on-chain indicators that could corroborate a potential bottom.

Macro developments or regulatory signals that could impact liquidity and risk sentiment in crypto markets.

Any notable commentary from market researchers and influencers on whether a durable reversal is forming.

Sources & verification

Farside data on five-day outflows from US spot BTC ETFs totaling about $1.72 billion.

CoinMarketCap price data for Bitcoin around $89,160 at the time of publication.

Crypto Fear & Greed Index by alternative.me and its “Extreme Fear” reading (25).

Santiment’s weekly market assessment describing a “phase of uncertainty” and retail-leaning shifts in sentiment.

Public comments from Nik Bhatia on X regarding metal markets and crypto sentiment.

Analyst observations on potential countertrend rallies and broader risk-off dynamics.

Outflows persist as US spot BTC ETFs see five-day streak

Bitcoin ETFs listed in the United States continued to shed assets on Friday, keeping a five-day withdrawal streak intact. The day’s net outflow stood at $103.5 million, extending a trend that began in the prior week and culminating in roughly $1.72 billion pulled from the sector over the span of five trading days. The pullbacks come amid a broader malaise in market sentiment and a cautious approach from investors as liquidity remains variable. The data, sourced from Farside, highlights how ETF flows can serve as a proxy for retail appetite and potential directional cues for Bitcoin price action in the near term.

The price of Bitcoin hovered around $89,160, a level that underscores the difficulty of reclaiming the $100,000 threshold that last breached in November. Market participants have argued that the ETF-outflow signal, when paired with subdued price momentum, points to a cautious risk environment where traders expect a possible stabilization before a sustained move higher.

The market’s mood aligns with a broader narrative of uncertainty, as sentiment measures show a population of investors retreating from riskier assets and awaiting more concrete catalysts. While some voices advocate patience, others forecast that an eventual reversal could emerge as macro conditions shift and on-chain metrics rebound, even if the timing remains uncertain.

In this environment, attention remains on how quickly volatility might normalize and whether additional inflows into the ETF complex or a shift in risk appetite could unlock a fresh leg higher for Bitcoin.

This article was originally published as Bitcoin ETFs Shed $1.72B in 5-Day Outflow Streak on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Introduction

Bitcoin (BTC) (CRYPTO: BTC) has long been debated as a potential everyday payment method. Yet, observers say policy, not the underlying technology, remains the bigger hurdle to widespread adoption. Pierre Rochard, a Bitcoin treasury veteran and a board member of the Strive project, argues that even the most efficient payments system struggles to gain traction when users face tax frictions. In late 2025, the Bitcoin Policy Institute warned about a missing de minimis tax exemption for small BTC transfers, a gap that could discourage routine payments. The policy conversation then shifted to whether lawmakers should extend exemptions to broader crypto activity, including charitable giving and other on-chain activities.

Discussions around tax treatment have intensified as U.S. lawmakers weigh how to apply exemptions to digital assets. Proposals touch on who should be exempt, where the thresholds lie, and how to balance revenue considerations with innovation. The debate is not just about whether BTC is fast enough or cheap enough to be a payment rail; it centers on how tax policy either enables or constrains its everyday use. The conversation is ongoing, with supporters arguing that clear, sensible exemptions would unlock practical, real-world use, while opponents worry exemptions could create loopholes or distort markets.

Disclosure: The information below is based on a press release or promotional material. Readers should verify key claims independently.

Key Takeaways

Tax policy is cited as the primary barrier to BTC becoming a widespread payment method, more so than technical limits or scaling concerns.

The absence of a de minimis tax exemption for small BTC transfers can impose a tax burden on everyday transactions, hindering merchant adoption and consumer use as a medium of exchange.

Wyoming Senator Cynthia Lummis proposed a de minimis exemption for digital asset transactions of $300 or less, with an annual cap of $5,000 and exemptions for charitable donations, aiming to make small crypto transactions more palatable for everyday use.

Policy debates feature notable voices, including Jack Dorsey, who has urged faster BTC adoption through tax relief, and critics who argue that exemptions for stablecoins and other assets deserve scrutiny.

Merchant acceptance and consumer familiarity with BTC as a payment option are intricately tied to how policy evolves, not solely to how the technology performs.

The broader regulatory and tax landscape—alongside staking and mining considerations—continues to shape the incentive structure for using BTC in daily commerce.

Tickers mentioned

Tickers mentioned: $BTC

Sentiment: Neutral

Price impact: Neutral. Regulatory and tax policy discussions could influence sentiment, but no immediate price signal is evident from the current disclosures.

Trading idea (Not Financial Advice): Hold. Clarity on tax exemptions and policy direction could affect BTC payment-use incentives in the near term.

Market context: The discussions occur amid a broader crypto policy environment characterized by ongoing debates over tax treatment, regulatory clarity, and the balance between consumer protection and innovation. These policy conversations intersect with merchant adoption, consumer willingness to use BTC for purchases, and the appetite of policymakers for tax incentives related to digital assets.

Why it matters

Policy shape matters as much as technology in the BTC payments debate. If de minimis exemptions are extended to small BTC transfers, merchants could find it financially viable to accept BTC for everyday purchases, reducing the friction involved in converting crypto to goods and services. Conversely, restrictive tax rules could discourage merchants from embracing BTC as a routine payment option, regardless of network efficiency or transaction costs.

The conversation is not theoretical. It reflects a broader effort to align tax incentives with the practical realities of crypto commerce. Proponents argue that lower friction, achievable through reasonable exemptions, could accelerate merchant adoption and consumer experimentation with BTC in real-world transactions. Critics, however, caution that tax advantages may need to be carefully bounded to avoid unintended fiscal or market distortions. The policy choices could either narrow or widen the gap between BTC as a store of value and BTC as a functional method of payment.

Voices from the industry have framed the issue in different lights. For some, progress hinges on lawmakers recognizing BTC as everyday money and granting targeted relief for small transactions and charitable use. For others, the emphasis remains on comprehensive tax frameworks that treat digital assets like other financial instruments while guarding against abuse and risk. The tension between innovation, consumer convenience, and fiscal responsibility is at the heart of the policy debate, and it will influence how quickly BTC can become a commonly accepted form of payment for goods and services.

What to watch next

Whether U.S. lawmakers move forward with a de minimis exemption framework for digital asset transactions and the specific thresholds that will be proposed.

Updates to the Lummis crypto tax bill and any amendments that could broaden or restrict exemptions, including charitable-donation considerations.

Public reactions from cryptocurrency advocates and merchants regarding tax exemptions and how they translate into practical payment adoption.

Any official studies or policy papers from the Bitcoin Policy Institute or similar think tanks on the impact of tax policy on Bitcoin payments.

Potential spillover effects on related assets, including stablecoins and other digital assets used in commerce, as lawmakers weigh exemptions and reporting requirements.

Sources & verification

Bitcoin Policy Institute report on the lack of a de minimis tax exemption for small BTC transfers.

Senator Cynthia Lummis’ crypto tax bill PDF outlining the proposed de minimis exemption for digital asset transactions and the $5,000 annual cap.

Coverage of Lummis’ bill proposing a de minimis tax exemption on digital asset transactions of $300 or less and related charitable-donation provisions.

Statements from Jack Dorsey about making BTC everyday money as soon as possible and related coverage of Square’s BTC payment integration.

Public discussions on the potential impact of tax exemptions on BTC use as a medium of exchange and the broader policy debate around stablecoins.

Tax policy as the main hurdle to BTC as everyday payments

Bitcoin (BTC) (CRYPTO: BTC) has long been debated as a potential everyday payment instrument. Proponents argue that the network’s settlement speed and low costs are sufficient for routine use, while skeptics emphasize that policy choices could stall adoption before the technology proves itself in real-world commerce. The core assertion from Pierre Rochard—a board member of the Bitcoin treasury firm Strive—is that the bottleneck is not the protocol or throughput, but the tax framework that governs each transaction. He likens the situation to a sports analogy: the best player remains dominant only as long as they actively participate; if they sit out, the advantage can evaporate. This metaphor underscores the idea that policy engagement, rather than pure tech performance, determines whether BTC can function as everyday money.

In December 2025, the Bitcoin Policy Institute voiced concern about the absence of a de minimis tax exemption for small BTC transfers. This gap means that every BTC transfer, even a modest one for a purchase, could trigger tax consequences. For users and merchants hoping to transact in BTC as a medium of exchange, the lack of a de minimis exemption translates into a tax drag that undermines the practical appeal of using BTC for daily purchases. The argument here is straightforward: if a transaction is small enough to be economically meaningful for a buyer, the tax treatment should not impose an overhead that makes the payment less convenient than alternatives.

Simultaneously, U.S. lawmakers have contemplated narrowing or redefining exemptions to cover only certain forms of digital assets, with lawmakers signaling interest in applying de minimis relief more tightly to stablecoins—dollar-pegged tokens backed by fiat reserves or short-duration instruments. The policy debate reflects a balance between encouraging legitimate use of digital assets and safeguarding tax revenue. The potential narrowing of exemptions for BTC would run counter to the aim of making BTC a practical payment vehicle, particularly for everyday purchases where small amounts accumulate into meaningful usage.

In parallel, notable political figures have weighed in on the issue. Wyoming Senator Cynthia Lummis, a cryptocurrency advocate, introduced a standalone crypto tax bill in July 2025 proposing a de minimis exemption for digital asset transactions of $300 or less. The proposal also imposes a $5,000 annual cap on exemptions and includes provisions to exempt cryptocurrencies used for charitable donations. The text of the bill, available online, signals an intent to lower the tax friction faced by small-value BTC transfers while preserving a framework for broader digital-asset taxation. The goal, as articulated by supporters, is to encourage practical usage of digital assets in daily life rather than reserve them for speculative or large-scale investments.

From corporate and industry perspectives, voices have called for tax relief on small BTC transactions. Jack Dorsey, the founder of payments company Square, which has integrated BTC payments into its point-of-sale systems, has repeatedly argued for tax exemptions on small BTC transactions to accelerate BTC’s role as everyday money. His stance sits alongside broader industry calls for policy clarity that would enable merchants to accept BTC without incurring disproportionate tax or administrative costs. Critics, including some Bitcoin advocates, emphasize caution about exemptions that could create loopholes or distort incentives in ways that favor certain assets over others. The dialogue thus continues to evolve as policymakers, industry participants, and the public evaluate the right balance between encouraging adoption and maintaining fiscal discipline.

The policy conversation also touches on how exemptions interact with other crypto activities. For example, discussions have emerged around how staking or mining income should be treated for tax purposes, and whether exemptions should apply to charitable contributions or to other on-chain actions beyond straightforward purchases. These debates illustrate that the treatment of crypto assets in tax code is not limited to one use case but encompasses a broad ecosystem of activities that could influence overall demand for BTC as a transactional medium.

Ultimately, the outcome of these policy debates will influence merchant behavior and consumer willingness to adopt BTC for daily spending. While the technology continues to improve in terms of speed and cost, the practical viability of BTC as everyday money is shaped by how tax policies evolve, how exemptions are defined, and how policymakers calibrate incentives to balance innovation with revenue and risk controls. In this context, the next few legislative sessions and policy publications will be pivotal in determining whether BTC moves from being primarily a store of value to a widely used medium of exchange for ordinary purchases.

This article was originally published as Tax Rules Are the Biggest Hurdle to BTC Payments, Crypto Exec Says on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

The Nietzschean Penguin (PENGUIN) token, a memecoin launched on the Solana (CRYPTO: SOL) blockchain, surged by roughly 564% after a White House post on X featuring an image of the president and a penguin walking through the snow went viral. The move occurred despite a broader downturn in the memecoin sector, underscoring how social media moments can still move tiny cap assets on efficient, on-chain ecosystems. Before the post, PENGUIN carried a market capitalization of about $387,000; in the 24 hours that followed, trading volume surged to roughly $244 million, according to SolanaFloor. By the time this article was prepared, the token’s market cap was reported around $136 million, with a price near $0.13 per DexScreener data. The event drew comment from industry observers who say the episode signals renewed appetite for on-chain trading activity in niche crypto segments.

Disclosure: The information below is based on a press release or promotional material. Readers should verify key claims independently.

Key Takeaways

PENGUIN’s price jumped about 564% following a viral White House post on X featuring a penguin image, illustrating how political imagery can impact meme assets.

24-hour trading volume spiked to roughly $244 million on SolanaFloor, highlighting a sudden influx of liquidity into a micro-cap token on the Solana network.

Market capitalization rose from a sub-million figure to about $136 million at the time of reporting, while the price hovered near $0.13.

The rally occurred amid a broader memecoin market downturn earlier in the year, contrasting with periods when meme tokens briefly outperformed traditional crypto sectors.

Industry voices cautioned that on-chain activity and social-media buzz can drive outsized moves in low-cap tokens, even as the broader market remains range-bound.

Analysts pointed to a continued interest in on-chain trading as a counterpoint to centralized hype, with Pump.fun’s platform involvement noted by investors and developers alike.

Tickers mentioned: $SOL

Sentiment: Neutral

Price impact: Positive. The rapid rally followed a viral social-media trigger, signaling a renewed appetite for active trading in niche memecoins.

Trading idea (Not Financial Advice): Hold. The move demonstrates volatility and speculative interest, requiring risk-aware positioning.

Market context: The episode sits within a wider pattern of memecoin volatility, where social momentum and on-chain liquidity can drive bursts of activity even as trend-following conditions remain mixed. In January 2026, memecoin total market capitalization rebounded by about 23% to top $47 billion, according to CoinMarketCap, after dipping in the preceding months, while social-media mentions intensified, as tracked by Santiment.

Why it matters

The episode matters because it illustrates the ongoing influence of social content on on-chain markets, even in highly niche segments of the crypto space. The PENGUIN rally shows that official or semi-official moments—like a White House post—can catalyze demand for a meme asset that operates on a layer-1 chain designed to support fast, low-cost transactions. The Solana (CRYPTO: SOL) ecosystem’s capacity to absorb a surge in liquidity for a micro-cap token underscores the network’s liquidity depth relative to its market cap, at least in brief spikes.

From a market structure perspective, the 24-hour trading volume of approximately $244 million is several orders of magnitude larger than the token’s pre-event market cap, highlighting how liquidity can surge in response to a viral cue. This kind of dissonance—tiny capitalization paired with outsized liquidity inflows—can generate rapid price discovery in a narrow window. Investors should note that such episodes often attract day traders and speculative funds that are willing to tolerate sharp pullbacks if the social narrative quiets. The broader memecoin cycle has been characterized by bursts of interest followed by consolidation, with later periods showing a divergence between hype-driven moves and fundamental utility.

The broader context for memecoins remains nuanced. While the sector enjoyed high-profile momentum in 2024, the year also saw a number of tokens retreat dramatically after initial surges. In early 2026, momentum re-emerged on social channels, aided by data firm Santiment’s tracking of social buzz, which can foreshadow shifts in risk appetite. The counterpoint to hype is often liquidity availability across on-chain venues, in which platforms like DexScreener help traders gauge liquidity conditions in near real time. The balanced view is that memecoins can offer rapid upside during favorable sentiment phases, but they also carry outsized downside when activity wanes or when regulatory or macro conditions turn negative.

The PENGUIN memecoin’s price action. Source: DEXScreener

“Memecoins typically lead when risk appetite returns. The rebound in the Fear and Greed Index from extreme fear toward neutral reinforces this shift,” said Vincent Liu, chief investment officer at Kronos Research, in remarks compiled by Cointelegraph. The latest move in PENGUIN, then, can be read as a microcosm of how social signals and on-chain liquidity interact during bursts of speculative interest.

Social media interest in memecoins surged in January 2026. Source: Santiment

Memecoins show signs of life in 2026 after a disappointing year. The broader market narrative remains contingent on risk-on or risk-off sentiment, and the ability of social-media momentum to translate into durable demand remains undecided. The near-term trajectory for PENGUIN will hinge on whether liquidity can be sustained beyond the initial hype and whether broader liquidity conditions in the crypto market support continued participation in high-beta memecoin plays.

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy

What to watch next

Monitor whether the price and on-chain liquidity sustain after the initial spike, with updates from SolanaFloor and DexScreener.

Watch for additional social-media signals on Santiment to assess whether the hype translates into lasting demand.

Observe any official statements or developments from Pump.fun or related launchpads that could influence future memecoin launches on Solana.

Track regulatory or macro shifts that could affect risk appetite in micro-cap memecoins and on-chain markets.

Keep an eye on subsequent memecoin performance in early 2026 to determine if the January rebound represents a broader trend or a temporary blip.

Sources & verification

White House post on X referenced in the initial surge narrative.

SolanaFloor data for PENGUIN’s pre/post-event market activity and 24-hour trading volume.

DexScreener data for price and market-cap context on the Solana network.

CoinMarketCap’s January 2026 memecoin market-cap movement and overall memecoin sector context.

Santiment’s tracking of social-media buzz around memecoins in January 2026.

What the story shows about the market

The PENGUIN episode illustrates how a mass-audience moment can inject liquidity into a micro-cap token on a fast, on-chain network. It also highlights the fragility of price discovery in memecoins, where a spike in social media attention can outpace fundamentals and trigger a rapid reallocation of capital. For traders and builders, the episode underscores both the potential for sudden upside and the risk of sharp reversals in highly speculative corners of the crypto market.

This article was originally published as Penguin Memecoin Surges Over $136M Market Cap After White House Post on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

The latest data shows Bitcoin (CRYPTO: BTC) nodes signaling support for Bitcoin Improvement Proposal 110 (BIP-110), a temporary soft fork intended to curb the amount of data carried within transactions at the consensus level. Measured signals indicate 2.38% of detectable nodes backing the proposal, with 583 of 24,481 nodes running the BIP-110 implementation, The Bitcoin Portal reports. The initiative centers on a short-term data cap rather than a permanent change to protocol rules, reflecting a broader debate over data storage, network costs, and decentralization in the Bitcoin ecosystem.

Key Takeaways

2.38% of Bitcoin nodes are signaling support for BIP-110, out of 24,481 reachable nodes.

583 nodes are running the soft-fork implementation, with Bitcoin Knots identified as the primary software for this proposal.

BIP-110 enforces a 34-byte limit on transaction outputs and an 83-byte cap on OP_RETURN data, applying for a one-year period with potential extension or modification.

The proposal’s GitHub page explains the one-year term and possible adjustments after that interval.

Debate around OP_RETURN and data limits has intensified since Bitcoin Core version 30 temporarily removed the 83-byte cap, a move that sparked substantial criticism within parts of the community.

Critics warn that relaxing data limits could raise storage costs for running nodes and encourage centralization, while supporters argue that filters and restrictions fail to adequately deter spam.

Tickers mentioned: $BTC

Sentiment: Neutral

Price impact: Neutral. The development reflects on-chain policy debates rather than immediate market catalysts.

Trading idea (Not Financial Advice): Hold. The evolution of BIP-110 will likely influence long-term network dynamics more than short-term price movements.

Market context: The discussion around BIP-110 sits within broader concerns about data growth, node accessibility, and the balance between censorship-resistance and on-chain efficiency in the Bitcoin network, against a backdrop of ongoing debates about user data, spam, and resource demands on validators.

Why it matters

The emergence of BIP-110 underscores a persistent tension in Bitcoin between on-chain data usage and the cost of maintaining a decentralized network. By limiting the size of transaction outputs to 34 bytes and capping OP_RETURN data at 83 bytes, proponents argue the change would reduce the on-chain payload that nodes must store and process. In practical terms, a lower data load could ease the resource burden for individual operators and smaller participants who run full nodes on consumer hardware. However, the flip side is a potential shift in the economics of running a node, with higher storage and bandwidth demands for those seeking to participate in validation and governance.

The current signal of support—2.38% of nodes with 583 of 24,481 participating—reflects a small but notable subset of the network willing to test a temporary constraint on data. The primary implementation cited for this proposal is Bitcoin Knots, a fork of Bitcoin Core offering alternative configurations and features. The existence of a soft fork specifically designed to be temporary signals that observers expect this constraint to be revisited after a year, with the GitHub page outlining the terms of deployment and the possibility of extension or modification. Such a timeline invites scrutiny of how governance and consensus might shift as the term nears expiration, especially if other stakeholders push for longer-term or alternative data-management approaches.

In contrast, the Bitcoin Core community’s decision to remove the 83-byte OP_RETURN limit with version 30—an action that unfolded in October 2025—drew sharp criticisms from opponents. Critics contended that removing a quantifiable data cap could incentivize spam and bloat, raising storage costs and potentially centralizing node operation as hardware requirements rise. This concern is central to the broader debate about whether the protocol should impose stricter data controls to preserve accessibility and resilience, or whether it should emphasize openness and flexibility even at the cost of increased on-chain data load.

The debate has also elicited notable opinions within the community. Critics such as Bitcoin advocate and educator Matthew Kratter have warned that unbounded data injection could threaten Bitcoin’s decentralization by imposing greater hardware and bandwidth burdens. Conversely, Bitcoin Core contributor Jameson Lopp has argued that data filters and limits may not be an effective antidote to spam and that more stringent data restrictions could hinder legitimate, data-heavy use cases. The arc of this discussion illustrates how changes to protocol rules—whether through a temporary soft fork like BIP-110 or a core upgrade—reverberate through node operators, miners, and developers alike.

The backdrop to these technical debates is a network that remains decentralized at its core but faces practical pressures as technology, storage costs, and participation thresholds shift. While consumer-grade hardware has historically sufficed for many nodes, the evolution of data handling policies could tilt that balance. It is this tension—between preserving an inclusive, low-barrier-to-entry network and managing the resource demands of a growing blockchain—that keeps BIP-110 and similar proposals at the center of ongoing discussions within the ecosystem.

As the community weighs short-term fixes against longer-term design choices, the path forward remains uncertain. The one-year horizon for BIP-110 can serve as a proving ground to assess whether data restrictions achieve their stated goals without unduly restricting legitimate use. The outcome will influence not only node economics but also how developers, miners, and users perceive the trade-offs between scalability, security, and verifiability on the Bitcoin network.

The shift in data handling policies also raises questions about how future upgrades might be staged to minimize disruption while preserving core principles of censorship resistance and open access. Supporters of more stringent controls frequently argue that such measures help deter spam and prevent excessive on-chain data growth, which could otherwise discourage new participants from running nodes. Opponents, however, emphasize that any expansion of centralization risk—through higher hardware and operational costs—undermines the decentralized ethos that underpins Bitcoin’s value proposition.

What to watch next

Monitoring node-count changes as BIP-110 deployment progresses and whether more implementations align with the soft-fork’s parameters.

Assessing whether the one-year term prompts a broader governance discussion about long-term data restrictions or alternative mitigation strategies.

Watching for any updates in the GitHub page for BIP-110 that could shape the final terms, extensions, or adjustments to the data caps.

Tracking community responses to the ongoing debate around OP_RETURN and arbitrary data limits, including any additional market or developer commentary.

Reviewing any activity on Bip-110.org or related documentation that could influence the timeline or deployment approach.

Sources & verification

The Bitcoin Portal’s node-count data and identification of Bitcoin Knots as the primary implementation for BIP-110.

The GitHub page detailing BIP-110’s terms, including the one-year deployment window and potential extensions.

The original discussions surrounding the removal of the 83-byte OP_RETURN limit in Bitcoin Core v30 (Oct 2025).

Technical discussions and community commentary on the OP_RETURN data-cap debate, including perspectives from noted developers.

Historical context on the OP_RETURN controversy and its links to broader debates about spam versus data transparency on-chain.

What the story means for users and the market

The BIP-110 thread illuminates a core challenge in blockchain design: how to balance a decentralized network’s accessibility with practical limits on data growth. While a soft fork like BIP-110 could temporarily constrain data to gain clarity on network behavior, it also tests the willingness of node operators to adapt to stricter rules or to opt for alternative software implementations. The outcomes—whether the one-year window proves effective at reducing spam, or whether the community chooses to revert to looser data parameters—will inform how future updates are approached and communicated to users.

What to watch next

Key milestones and any activation dates associated with BIP-110’s rollout.

Community feedback and governance decisions as the one-year term approaches its end.

Any new research or testing results on SPAM mitigation vs. data bloat in live networks.

This article was originally published as BIP-110: Temporary Soft Fork Gains Over 2% of Bitcoin Nodes on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Bitcoin Amsterdam 2023, hosted at Amsterdam’s Westergas from October 12-13, exceeded all expectations, with close to 3,000 attendees. This remarkable turnout mirrored the event’s popularity from the previous year, showcasing the unwavering dedication and passion of the European Bitcoin community. Despite the challenges posed by the ongoing bear market, attendees from all corners of the globe flocked to the Dutch capital to engage with industry thought leaders, visionaries, and influential figures, including Edward Snowden, Adam Back, Stella Assange, and many others. It proved to be more than just a conference; it was a dynamic platform bringing together a diverse range of participants, from industry leaders to builders in Bitcoin, institutions, academics, educators, activists, and the global community of Bitcoin enthusiasts.

One of the standout aspects of this year’s event was the series of industry announcements that took place. Attendees were treated to exciting revelations, including the launch of cutting-edge products such as the Trezor Safe 3 Hardware wallet and the Wassabi Wallet’s new coinjoin API. HIVE Digital Technologies Ltd. provided an update on its HPC and AI infrastructure projects.

These and many other announcements that took place at Bitcoin Amsterdam reaffirmed the dynamism of the Bitcoin ecosystem, illustrating its continued growth and development.

“Everything that is connected with Bitcoin is welcome in Madeira.” – President Miguel Albuquerque of Madiera

“Focus on bitcoin fundamentals!” says Edward Snowden

Book enthusiasts had the opportunity to engage in book signings and celebrate new book launches, with Aaron’s Van Wirdum unveiling “The Genesis Book.” The event not only offered a space for the exchange of ideas but also celebrated the literary contributions to the Bitcoin space, providing attendees with valuable resources to further their understanding of this transformative technology.

Amid the discussions and product launches, Bitcoin Amsterdam 2023 also embraced the artistic realm with the “Ordinal Night” digital art exhibition and art auction. This innovative showcase highlighted the fusion of technology and creativity, demonstrating that Bitcoin extends beyond finance and into the realm of culture and expression.

A particularly exciting highlight of the event was the announcement of the “One Million Dollar Seed Funding Prize” by Samara Alpha. The inaugural Bitcoin Alpha Competition, co-hosted by Samara Alpha and Bitcoin Magazine, sought to democratize investing by identifying the best undiscovered Bitcoin fund manager. This initiative reflects the Bitcoin community’s commitment to fostering innovation and inclusivity, creating a level playing field for aspiring fund managers to shine.

In the spirit of community-building, Bitcoin Amsterdam 2023 proved to be a gathering of minds and ideas, a hub of technological innovations and artistic expression. The event celebrated the diverse facets of the Bitcoin ecosystem, from groundbreaking product releases to artistic expression, and even venture capital initiatives aimed at propelling Bitcoin into a new era of financial democratization.

As we reflect on this year’s conference, it’s clear that The Bitcoin Conference has evolved into a multidimensional platform where thought leaders and industry pioneers converge to shape the future of Bitcoin. The event’s dynamism and commitment to the European community underscore the enduring significance of Bitcoin in our ever-changing world. It’s not just one of the cryptocurrencies; it’s a global movement, a force for innovation, and a beacon of hope for a more equitable financial future. Bitcoin Amsterdam 2023 was a testament to the enduring power of this technology and the passionate community that continues to drive it forward.

Upcoming Bitcoin events:

Nashville, Tennessee July 25-27, 2024 get tickets now 

Amsterdam, TBD 2024 get tickets now

This article was originally published as Bitcoin Amsterdam 2023: A Confluence of Minds, Innovations, and Celebrations on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

At the World Economic Forum in Davos, prominent African policy and finance voices highlighted a rapid shift in how people move value across borders. Vera Songwe, a former United Nations under-secretary-general and current chair of the Liquidity and Sustainability Facility, argued that stablecoins are increasingly used to cut remittance costs and speed up settlement times. In Africa, where traditional cross-border transfers can cost about $6 for every $100 sent, digital currencies are offering a cheaper, faster alternative and expanding financial access for both individuals and small businesses. Songwe’s comments were delivered during a Davos panel and underscored a broader momentum toward crypto-enabled inclusion on the continent. WEF Davos panel.

650 million people don’t have access to a bank account in Africa. With a smartphone you have access to stablecoins, so you can save in a currency that is not exposed to fluctuations of inflation and making you poor.”

Songwe noted that inflation has climbed above 20% in roughly a dozen to fifteen African countries since the COVID-19 pandemic, a backdrop that makes a store of value in more stable units appealing. In that context, stablecoins are presented not merely as a payments mechanism but as a potential hedge against local currency depreciation. The practical upshot, she argued, is that stablecoins enable households and small businesses to preserve value and transfer funds with far greater speed than traditional channels allow.

Her remarks reflected a broader trend: digital currencies are moving from novelty to everyday use in several markets where inflation and capital controls have intensified. In her estimate, around 650 million adults in Africa still lack bank accounts, but a smartphone can unlock access to stablecoins, offering a degree of financial resilience even where formal financial services remain out of reach. The regions showing the strongest activity include Egypt, Nigeria, Ethiopia and South Africa, where volatile inflation and policy constraints have helped stablecoins gain traction as a means of saving, paying suppliers, and moving money domestically and across borders. The emphasis appears to be on practical, lower-cost usage by small and medium-sized enterprises that rely on faster settlement cycles for vendor payments and cross-border trade.

Total monthly onchain value received by Sub-Saharan Africa from July 2022 to June 2025. Source: Chainalysis

Beyond remittances, the continent’s crypto narrative is being reshaped by government and regulatory attention. A September Chainalysis report positioned Sub-Saharan Africa among the world’s fastest-growing regions for crypto adoption, reporting on-chain value exceeding $205 billion from July 2024 to June 2025—year over year growth of about 52% and ranking third globally in adoption intensity. As adoption accelerates, several nations have moved to formalize or recalibrate their approaches to crypto activity, balancing potential benefits with risk controls.

On the policy front, Ghana moved decisively in December to regulate the sector, legalizing cryptocurrency trading by passing a Virtual Asset Service Providers bill and creating a formal regulatory framework for the industry. Bank of Ghana Governor Johnson Asiama framed the measure as a way to enable crypto activity while equipping authorities with tools to manage associated risks. Nigeria followed with governance steps in January to bring crypto activity into the tax net by requiring crypto service providers to link transactions to users’ tax identification numbers. The intent is to anchor regulation in identity-based reporting rather than relying solely on on-chain tracing. In South Africa, the central bank has warned that crypto assets and stablecoins represent emerging financial stability risks as local adoption continues to rise.

African countries advance crypto legislation

The regulatory arc in Africa illustrates a widening spectrum: from formal legalization and tax integration to prudent, risk-aware oversight. Ghana’s move represents one end of that spectrum, aiming to establish clear rules for exchanges and service providers. Nigeria’s identity and tax reporting requirements represent another approach, attempting to bring crypto markets into existing fiscal frameworks without stifling innovation. South Africa’s stance—recognizing stability risks—signals a willingness to monitor and study the impact of digital assets on banks and payment systems as the sector grows. These regulatory experiments coincide with ongoing research into how stablecoins and other crypto tools can influence financial inclusion, cross-border trade, and macro stability on the continent.

What to watch next

Whether Ghana’s VASP framework is complemented by further guidance on consumer protections and AML/CFT standards.

Nigeria’s enforcement of tax-ID linked transactions and how crypto service providers implement identity verification across use cases.

South Africa’s ongoing assessments of crypto’s impact on financial stability and the potential design of supervisory regimes for stablecoins.

Any cross-border payments pilots or regulatory sandboxes that test stablecoins for real-world remittances and SME payments.

What to watch next

Regulators publish further guidance or amendments to existing crypto laws in Ghana, Nigeria, and South Africa.

Public-private collaborations emerge to promote financial inclusion using stablecoins or crypto rails.

Adoption metrics from central banks and market regulators begin to show how much of the on-chain value is driven by remittances versus investment or trading flows.

Sources & verification

Vera Songwe’s remarks on stablecoins’ impact on remittances and inflation at the World Economic Forum in Davos (panel video link).

Chainalysis report on Sub-Saharan Africa crypto adoption and the on-chain value metrics for July 2024–June 2025.

Ghana’s Virtual Asset Service Providers bill and regulatory framework developments.

Nigeria’s January crypto regulatory changes tying activity to tax identification numbers.

South Africa’s central bank stance on crypto assets and stability risk considerations.

Related coverage onVisa’s partnerships with stablecoins in Europe, the Middle East and Africa (linked in the original article).

Remittance costs, inflation, and Africa’s stablecoins

Africa’s remittance landscape is undergoing a meaningful shift as stablecoins move from niche usage to a broader financial tool. Songwe’s observations at Davos reflect a continent where the cost of sending money across borders has long been a barrier for families and small businesses. If a transfer of $100 could be settled in minutes rather than days, and with fees that can be significantly lower than traditional networks, the case for digital currencies as an everyday utility grows stronger. The data from Chainalysis reinforces this narrative, showing robust on-chain activity across Sub-Saharan Africa even as governments deliberate how best to regulate, tax, and supervise the new rails.

In markets marked by high inflation and capital controls, stablecoins have supplied a form of value retention and liquidity for users who otherwise face eroding purchasing power. The Ghanaian example demonstrates how a regulatory framework can be designed to unlock innovation while preserving financial stability. Nigeria’s approach—tying crypto activity to tax compliance—reflects a pragmatic attempt to integrate digital assets into the formal economy. South Africa’s caution signals that regulators are evaluating systemic risk as the crypto space expands.

As the continent continues to experiment with crypto-enabled remittances, policymakers face the task of balancing inclusion with risk management. The ongoing dialogue among investors, regulators, and users will likely shape the trajectory of crypto adoption in Africa for years to come, with potential implications for payment infrastructure, cross-border settlement, and the broader macroeconomic environment.

Disclosure: The information above is based on publicly available statements, reports, and regulatory actions. Readers should verify key claims independently.

This article was originally published as Stablecoins Emerge as Africa’s Financial Rails, Says Ex-UN Official on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Introduction

Regulators’ push to curb stablecoin yields under the CLARITY Act threatens to reroute capital away from fully regulated markets and toward offshore or opaque financial structures. Industry executives warn that restricting compliant stablecoins from offering yields could sideline legitimate institutions while accelerating capital migration beyond U.S. oversight, complicating the country’s position in the global crypto ecosystem.

Key Takeaways

The CLARITY Act’s yield restrictions may drive compliant stablecoins offshore, undermining regulated financial channels.

Treating stablecoins strictly as cash rather than yield-bearing instruments creates incentives for capital to seek higher-yield opportunities outside the onshore framework.

Emerging on-chain yield strategies, including delta-neutral and synthetic structures, could flourish in regulatory gray areas, raising disclosure and oversight concerns.

Global competition is intensifying as other jurisdictions pursue yield-bearing digital instruments, potentially eroding U.S. competitiveness in crypto finance.

Tickers mentioned:

Sentiment: Bearish

Price impact: Negative. The proposed restrictions could depress onshore demand for compliant stablecoins and push yield-seeking capital abroad.

Trading idea (Not Financial Advice): Hold. Regulators’ actions create a watchlist for regulatory clarity and risk transfer to offshore structures.

Market context: The debate on stablecoin regulation sits at the intersection of monetary policy, banking capital, and crypto innovation, amid broader shifts toward yield-bearing digital assets worldwide.

Rewritten article body

The United States faces a pivotal choice as lawmakers weigh restrictions on stablecoin yields within the framework of the CLARITY Act. Industry participants contend that proposals to bar fully compliant stablecoins from offering interest could push a substantial amount of capital into offshore or opaque structures that operate outside conventional regulatory guardrails. Colin Butler, head of markets at Mega Matrix, argues that removing yield from compliant stablecoins would not fortify the American financial system; it would instead marginalize regulated institutions and redirect capital beyond U.S. oversight.

“There’s always going to be demand for yield,” Butler told Cointelegraph, noting that if compliant stablecoins cannot offer it, investors will gravitate toward offshore options or synthetic structures that fall outside the regulatory perimeter. The policy tension centers on balancing financial stability with the needs of market participants seeking efficient, regulated access to stable, dollar-denominated yields.

Under the GENIUS Act, payment stablecoins such as USDC must be fully backed by cash or short-term Treasuries and are prohibited from paying interest directly to holders. The framework treats stablecoins as digital cash rather than as traditional yield-bearing financial products. Butler maintains this creates a structural misalignment, especially when the three-month U.S. Treasury yields are hovering around 3.6% while ordinary savings accounts lag far behind.

He adds that the “competitive dynamic for banks isn’t stablecoins versus bank deposits,” but rather banks offering depositors only modest rates while banks retain the lion’s share of yields. If investors can earn 4% to 5% on stablecoin deposits via exchanges, compared with near-zero yields at traditional banks, capital reallocation appears rational—especially for yield-seeking institutions and individual investors alike.

Andrei Grachev, founding partner at Falcon Finance, warns that constraining onshore yield could create a vacuum that is rapidly filled by so‑called synthetic dollars—dollar-pegged instruments designed to maintain parity through structured trading strategies instead of one-to-one fiat reserves. “The real risk isn’t synthetics themselves—it’s unregulated synthetics operating without disclosure requirements,” Grachev said.

Butler pointed to Ethena’s USDe as a prominent example, noting that it generates yield through delta-neutral strategies involving crypto collateral and perpetual futures. Because such products fall outside the GENIUS Act’s definition of payment stablecoins, they occupy a regulatory gray area. “If Congress is trying to protect the banking system, they have inadvertently accelerated capital migration into structures that are largely offshore, less transparent, and completely outside U.S. regulatory jurisdiction,” he said.

Banks have argued that yield-bearing stablecoins could trigger deposit outflows and weaken their lending capacity. Grachev acknowledged that deposits are central to bank funding, but contended that portraying the issue as unfair competition misses a larger point. “Consumers already have access to money markets, T-bills, and high-yield savings accounts,” he noted, adding that stablecoins simply extend that access into crypto-native environments where traditional rails are less efficient.

Stablecoin yield bans could hurt US competitiveness

Beyond domestic concerns, the policy debate carries global implications. China’s digital yuan became interest-bearing earlier this year, and jurisdictions such as Singapore, Switzerland, and the UAE are actively developing frameworks for yield-bearing digital instruments. Butler warns that if the United States bans yield on compliant dollar stablecoins, it risks signaling to global capital that the U.S. offers only zero-yield coins, while other economies promote interest-bearing digital currencies—“a gift to Beijing,” he argued. Grachev argues the United States still has an opportunity to lead by establishing clear, auditable standards for compliant yield products. The current CLARITY Act draft, though, risks diluting this leadership by treating all yield as equivalent and failing to distinguish between transparent, regulated structures and opaque alternatives.

This article was originally published as CLARITY Act Could Ban Stablecoin Yields and Push Capital Offshore on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Introduction

The United States’ brinkmanship over Greenland has spotlighted Europe’s fragile economic ties with Washington. As Brussels weighs responses to what some officials describe as US aggressiveness, the continent contemplates a range of tools—from targeted market access restrictions to the unprecedented offloading of US debt held in European portfolios. While a Davos-backed framework failed to crystallize, the mood remains wary, and EU leaders are mapping potential steps should tensions flare again. The episode underscores a shifting financial order, with implications for stablecoins, liquidity in Treasury markets, and the global reach of dollar-denominated assets.

Key Takeaways

European leaders are openly considering responses that could include restricting US access to EU markets and potentially unloading US debt held in Europe as leverage.

The feasibility of dumping trillions in US Treasuries is uncertain, given the complex mix of official and private holders and the limited capacity of alternative markets to absorb such a shift.

Stablecoin issuers, required by new US regulation to back reserves with dollars and Treasuries, face a growing role as buyers of US debt, intensifying the link between stablecoins and Treasury market liquidity.

The broader risk landscape remains unsettled: a multipolar world could stress US debt markets if alternative assets fail to fill the liquidity gap, with implications for the global financial system.

Sentiment: Bearish

Price impact: Negative. Heightened geopolitical risk and liquidity concerns could pressure Treasury market stability and investor sentiment.

Trading idea (Not Financial Advice): Hold. The situation is fluid, and any policy moves could swing risk appetite across fiat and crypto markets.

Market context: A more multipolar order increases cross-asset contagion risk as policymakers reevaluate the role of the dollar and the resilience of dollar-denominated markets.

Can the EU actually dump US debt?

Before Jan. 21, European leaders weighed a range of responses. While Denmark deployed forces to Greenland, other leaders flirted with a “trade bazooka” that could shut out US companies from EU markets. On the other side of the ledger, some argued Europe could leverage holdings of US debt. Former Dutch Defense Minister Dick Berlijn suggested that if Europe offloaded bonds, it would provoke a US shock—“the dollar crashes, high inflation,” and voters would not respond kindly.

Deutsche Bank economist George Saravelos noted in a recent briefing that, while the US remains militarily and economically potent, it depends on external deficits financed by others. “The US has one key weakness: it relies on others to pay its bills via large external deficits,” he wrote. The practical challenge, however, is formidable: how would Europe compel a broad set of holders—ranging from central banks to pension funds and banks—to sell? Much of the US debt in Europe is not held by governments but by private institutions, including hedge funds, banks, and pension funds across the UK, Luxembourg, and Belgium. Yesha Yadav, a Vanderbilt law professor, emphasized that foreign government buyers tend to be reluctant to move unless compelled by necessity, making a coordinated dump unlikely in the near term.

Other voices warned that escalation could backfire politically and economically. Societe Generale’s Kit Juckes argued that the situation would need to deteriorate further before it would harm investment performance for political ends. Nonetheless, some analysts suggested Europe could explore using debt deemed among the safest as collateral to preserve financial stability if conditions worsen. Yet the core problem remains: the global transition away from dollar dominance requires viable substitute assets, and there are few ready-made buyers for a massive, abrupt reallocation of traditional Treasuries.

China has signaled a slower pace in US debt purchases, and Asian markets, though substantial, cannot swallow a sudden, large-scale shift without disrupting global risk premia. The market capitalization of major regional indices and sovereign bond markets remains far smaller than US debt markets, complicating any attempt to replicate the liquidity and depth of Treasuries. The conclusion of many analysts is clear: even in theory, the USD’s reserve-currency status and the breadth of US capital markets limit the feasibility of a sudden decoupling.

Stablecoins become major buyers of US debt

The GENIUS Act established a framework where stablecoin issuers operating in the United States must hold sufficient reserves, including dollars and Treasurys, to back their coins. This requirement has made at least part of the stablecoin sector a steady source of demand for Treasuries, effectively tying stablecoin liquidity to the health of US Treasury markets. As stablecoins grow, their appetite for Treasuries expands accordingly, which can bolster the liquidity and appeal of US debt in the near term. Yet that dependency also exposes the Treasury market to a new class of liquidity shocks if stablecoin issuers encounter stress or regulatory shifts tighten the supply of Treasuries.

The dynamic raises questions about liquidity shocks in debt markets, a concern voiced by Yesha Yadav and Brendan Malone in earlier analyses. If a run were to occur among stablecoin issuers, the lack of substitute buyers could ripple through the system, potentially undermining the credibility of US Treasury markets. The interconnectedness of stablecoin reserves with Treasuries means policy developments in one domain can quickly affect the other, reinforcing the need for robust risk management across both fiat and crypto ecosystems.

As dialogue persists between Washington and Brussels, and as markets recalibrate to an evolving monetary order, the stability of US debt markets may increasingly hinge on the behavior of non-traditional buyers. The political impulse toward hedging risk with alternative assets remains strong, but the mechanics of an orderly transition away from a dollar-centric system are complex. Latvia’s President Edgars Rinkēvičs warned that while a full rupture is not guaranteed, “there is a clear and present danger” in the current trajectory—an observation that resonances across both traditional and digital asset markets.

Conclusion

The Greenland episode has reframed a familiar debate: how resilient are dollar-based markets in a world seeking diversification? As the EU weighs options ranging from access restrictions to debt reallocation, and as stablecoins deepen their footprint in the Treasury ecosystem, markets face a test of liquidity, credibility, and cross-border coordination. The outcome will hinge on policy decisions, private-sector behavior, and the pace of de-dollarization—factors with immediate relevance for both traditional finance and the evolving crypto landscape.

This article was originally published as If Greenland Deal Fails, Can the EU Sell U.S. Debt? on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Introduction

The Netherlands is advancing plans to tax unrealized gains across a broad spectrum of assets, including stocks, bonds and cryptocurrencies, as part of an overhaul to the Box 3 wealth tax regime. The proposal would levy annual taxes on paper profits—even when assets have not been sold—sparking concerns about capital flight among investors and crypto participants. Lawmakers across the political spectrum indicate broad support, arguing the reform is necessary to shore up public finances after court rulings challenged the current approach, with NL Times reporting on the developments.

Key Takeaways

Unrealized gains on equities, bonds and crypto would face annual taxation under the Box 3 overhaul.

Government officials say taxing only realized gains is preferable but cannot be delivered before 2028 amid fiscal pressures.

Cross-party backing is expected, though concerns about administration and revenue shortfalls persist.

The reform includes favorable treatment for real estate investors, with deductions and taxation upon realization, while second homes face extra levies.

Sentiment: Bearish

Price impact: Negative. The prospect of annual unrealized gains taxes may damp asset valuations and incentivize capital flight.

Trading idea (Not Financial Advice): Hold. The policy debate indicates potential long-term shifts in asset costs and tax certainty, warranting a cautious stance until details solidify.

Market context: The move comes amid broader European scrutiny of wealth and asset taxation, with crypto policy and cross-border competitiveness a key consideration for investors.

Dutch parties back tax on unrealized gains

Under the proposal, investors in equities, bonds and cryptocurrencies would face annual taxation on paper gains. State Secretary Eugène Heijnen has argued that taxing only realized returns would be preferable, but the government contends that implementing such a regime before 2028 is not workable given fiscal pressures and the desire to avoid further revenue shortfalls. The plan would replace the current Box 3 approach, which has faced court rulings over its reliance on assumed rather than actual returns, a development that prompted renewed parliamentary scrutiny this week. More than 130 questions were directed at Heijnen as the Tweede Kamer (House of Representatives) debated the reforms, reflecting concerns about administration, fairness and timing.

The reform has drawn support from a broad swath of parties. The liberal VVD and the Christian Democratic Appeal (CDA) are expected to back the bill, as are JA21 and the Party for Freedom (PVV), indicating a cross-party consensus on the need to modernize Box 3. Center-left groups such as Democrats 66 (D66) and GroenLinks–PvdA have also signaled openness to the changes, arguing that annual taxation would be simpler to administer and would help avert larger budget gaps created by unrealized gains. In discussions about the balance between revenue needs and administrative practicality, lawmakers have stressed that delaying would exacerbate public-finance pressures and deepen the shortfall projections.

Within the framework, the plan also introduces a rewrite of tax treatment for real estate, aiming to make Box 3 more favorable for property investors. Costs would be deductible, and taxation would occur upon realization of profits, though second homes would incur an additional levy for personal use. If enacted, the changes could reshape asset allocation within Dutch portfolios and influence decisions by households and institutions alike as they adapt to a system that taxes returns annually rather than at realization alone.

The policy’s reception among investors and crypto advocates has been mixed, with substantial criticism focused on potential outflows and reduced competitiveness. Critics warn that annual taxes on paper gains could accelerate capital flight and deter innovation in the Netherlands’ crypto sector. Prominent Dutch analyst Michaël van de Poppe described the plan as “insane,” arguing that the added burden would significantly raise the annual tax bill and push residents to consider relocating. Heenan-style commentary on social media echoed concerns that the policy could hamper wealth creation and incentivize capital to migrate to more favorable regimes.

Dutch unrealized gains tax sparks crypto backlash

The backlash from the crypto community centers on the risk that annual taxation of unrealized gains would deter investment in digital assets and blunt the Netherlands’ appeal as a hub for crypto innovation. Investors warn that higher holding costs and the prospect of ongoing tax obligations without liquidity events could complicate long-term strategies for individuals and firms alike. Supporters counter that the current regime creates distortions and revenue gaps, while a transparent, annual tax on paper gains is viewed as easier to administer and more equitable in capturing wealth across asset classes. The debate, set against a tightening fiscal environment, underscores how tax policy can influence both market structure and regulatory competition within Europe.

As policymakers weigh the merits and risks, the broader market context remains critical: Europe is recalibrating wealth and asset taxation in parallel with regulatory reforms in crypto. The Dutch plan reflects a wider trend toward simplifying administration and aligning tax treatment across asset categories, even as critics warn of unintended consequences for investment, innovation and capital mobility. The outcome will likely hinge on the final design details, transition rules and the government’s ability to secure cross-party support while addressing concerns about revenue stability and administrative practicality. The next steps in parliament will determine whether the Box 3 overhaul can balance revenue needs with the Netherlands’ aspirations as a fintech and crypto-forward economy.

This article was originally published as Netherlands Eyes Unrealized Gains Tax on Stocks and Crypto on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.