Cointelegraph

Ethereum treasury company BitMine Immersion Technologies scooped up $97.6 million worth of Ether on Tuesday as the crypto market remains muted in the final days of 2025.

Nansen data shows BitMine purchased 32,938 Ether (ETH). Other data shows its total holdings is now 4.07 million ETH, worth $12 billion.

BitMine also staked another 118,944 ETH, continuing its strategy to earn passive returns for shareholders.

BitMine’s latest buying spree comes amid a broader crypto market compression, which Tom Lee,  the orchestrator of BitMine’s Ethereum strategy, said is partly due to an uptick in tax-loss selling in the US:

"Year-end tax-loss related selling is pushing down crypto and crypto equity prices and this effect tends to be the greatest from 12/26 to 12/30, so we are navigating markets with this in mind.”

More tax-loss selling typically happens toward the end of December as individuals and institutions offload assets to offset profits and lower their taxable income for the year.

Lee, a founder and managing partner of Fundstrat, said crypto prices have also been affected by institutional investors taking a break during the Christmas period, as it leaves bots to dominate trading activity.

The selling pressure has stalled upward price movement, with the crypto total market cap having now hovered around the $3 trillion mark for the past two weeks, CoinGecko data shows.

Change in crypto market cap over the past fortnight. Source: CoinGecko

BitMine’s ETH buying activity hasn’t slowed

Despite the market slump, BitMine has accumulated more than 77,400 ETH since last Monday, widening its lead over competitors and becoming what Lee describes as the largest “fresh money” buyer of ETH.

BitMine has now purchased more than 40,000 ETH each week for at least 10 consecutive weeks.

Digital asset treasuries by value of crypto holdings. Source: BitMine

Proposed California wealth tax stirs controversy

It comes as several crypto leaders slammed a proposed 5% wealth tax on billionaires earlier this week, with opponents arguing it could trigger an exodus of entrepreneurs and capital out of the tech-savvy state.

“I promise you this will be the final straw. Billionaires will take with them all of their spending, hobbies, philanthropy and jobs,” former Kraken CEO Jesse Powell said.

The proposal includes taxes on unrealized gains.

Magazine: 6 reasons Jack Dorsey is definitely Satoshi… and 5 reasons he’s not

The crypto market will be bleeding into 2026 depsite other major assets gaining; however, there will be a chance for crypto to play catch-up in the new year, according to market intelligence platform Santiment.

In an X post on Tuesday, analysts from Santiment said Bitcoin (BTC) is trailing behind gold and the stock market index S&P 500, which have both made slight recoveries after a crash in November saw bleeding across the board.

Since the start of November, gold is up 9%, the S&P 500 is up 1%, and Bitcoin is down 20%, trading for around $88,000 as of Wednesday.

Bitcoin is trailing behind gold and the S&P 500, but that could shift in 2026. Source: Santiment

“The correlation between Bitcoin & crypto compared to other major sectors is still lagging behind,” Santiment analysts said, adding that “Heading to 2026, there will remain an opportunity for crypto to play catch-up.”

Whales waiting on the sidelines

Large holders scooping up crypto again could be the first sign of a shift back, as whales slowed accumulation in the second half of 2025, according to Santiment.

“The second half of 2025 was dominated by aggressive accumulation by the small wallets, while large wallets essentially stayed flat, rising up to the Oct ATH, then selling.”  

Generally, large holders and whales are considered market movers, and their trades can influence market behavior, liquidity, and investor psychology.

“Historically, the best recipe for a bear pattern to flip to a bullish one is when large wallets accumulate, and retail dumps,” Santiment analysts added.

Long-term Bitcoin holders have also stopped selling, pumping the brakes on offloading crypto for the first time six months after trimming their positions from 14.8 million coins in mid-July to 14.3 million in December.

Shift back into crypto could already be underway

Garrett Jin, former CEO of the now-defunct crypto exchange BitForex, speculated that traders have already started to shift out of other sectors and back into crypto.

Data from the on-chain analytics platform Nansen shows that the number of active Bitcoin addresses has risen 5.51% in the last 24 hours, while transactions are down nearly 30%.

The number of active Bitcoin addresses has risen, but transaction volume is down. Source: Nansen 

“The short squeeze in metals is over as expected. Capital is beginning to flow into crypto,” Jin said on Tuesday, adding in response to a user's question about whether traders investing in precious metals also buy crypto, “Capital is the same. Always sell high and buy low.”

Related: Bitcoin’s $90K rejection: Is BTC's digital gold narrative losing to bonds?

At the same time, investor and market analyst X account CyrilXBT, said the market is in a “classic late-cycle positioning before a shift.”

“When liquidity turns and BTC breaks structure: Gold cools, BTC leads, ETH follows, Alts finally wake up. The market always moves before the narrative does. Stay patient. This phase is designed to test conviction.” 

Magazine: Big questions: Would Bitcoin survive a 10-year power outage?

The US Federal Reserve has been highly influential on crypto market momentum this year, and its impact is likely to continue into 2026 as divisions among policymakers remain.

The Fed made three interest rate cuts in 2025, the most recent on December 10, which brought rates down to between 3.5% to 3.75%. 

However, projections suggest there will only be one additional cut in 2026 despite rates remaining at their highest levels since 2008.

Key factors influencing policymaker decisions are labor market data, inflation trajectory, particularly from tariff impacts, and overall economic growth.

The central bank will also get a new chair when Jerome Powell’s tenure ends in May, and President Donald Trump has already been shortlisting candidates who are most likely to be dovish.

US rates remain at an 18-year high despite three cuts this year. Source: Macro Trends

What will the Fed do in early 2026?

The Fed’s next meeting on January 27 and 28 will be pivotal as it is the first chance for the Fed’s governors to update guidance, which could set the tone for the quarter.

CME Group shows investors predict only a 20% probability of another 25 basis point rate cut in January, which rises to 45% of a cut at the Fed’s meeting in mid-March. 

The Dot Plot shows divisions 

The December 2025 dot plot, showing each policymaker’s interest rate projection, shows remarkable division, with equal numbers projecting zero, one, or two rate cuts, creating significant uncertainty for markets as 2026 begins.

The chart provides transparency into Fed thinking, but the projections frequently change as new economic data emerges. 

Current median projections for the end of 2025 are 3.6%, essentially the current rate, and 3.4% by the end of 2026, which indicates only one cut for 2026.

December Dot Plot shows divisions on where policymakers think rates will be at the end of 2026. Source: Federal Reserve

Analysts at Charles Schwab said after the Fed’s cut in December that the “updated projections were not particularly hawkish,” with 12 of the 19 policymakers projecting at least one more cut next year.

Analysts hope for two cuts in 2026

CoinEx Research chief analyst Jeff Ko told Cointelegraph that the Fed “faces significant internal divisions,” and the dot plot shows a “wide dispersion of views and no clear consensus on the path for interest rates in 2026.”

“In my view, the Fed is likely to deliver two rate cuts in 2026. The Fed will probably take a break in January, followed by one rate cut in March, which would fall within the remainder of Powell’s term as Chair, running through May.”

“This timing would be justified if labor market conditions remain soft, even as inflation potentially peaks above 3% in Q2. Following the leadership transition, the new Fed leadership is likely to continue a gradual easing cycle through the rest of the year,” he said. 

Related: Crypto has everything needed for a bull market, so why is the market down?

There are a few scenarios that could play out with the Fed in Q1, Jeff Mei, chief operating officer at the BTSE exchange, told Cointelegraph. 

“The base case scenario is that the Fed cuts rates once in Q1 and maintains its current rate of Treasury bill buybacks, which will unleash some liquidity into the market that could be good for crypto inflows,” he said. 

“In a bull case scenario where inflation goes down, and unemployment goes up, the Fed would have to move more aggressively, initiating two cuts and stepping up its T-bill buybacks. Crypto markets would benefit as demand for risk-on assets would spike.”

However, the worst-case scenario is if inflation rears its ugly head again and the Fed is forced to halt rate cuts and T-bill buybacks altogether. Such a fear could cause stock and crypto markets to plunge, he added. 

Toned down hope for 2026 

Justin d'Anethan, head of research at Arctic Digital, told Cointelegraph that most people had big hopes about the end of quantitative tightening and a possible new era of Fed dovishness. 

“Most feel disappointed, though, as the Fed seems accommodating but still very cautious,” he added. 

“For an asset that essentially hedges reckless central bank policies, the depreciation of fiat currencies and, ultimately, the amount of liquidity in global markets, this more measured approach tones down the euphoric phase most crypto traders are (or were) hoping for.”

Nevertheless, a new chair could shift the Fed’s overall stance on rate policy and its willingness to support risk assets like crypto.

When interest rates are lowered, investors tend to seek higher-risk assets such as crypto, as traditional investments like bonds and term deposits become less attractive. This increases demand and buying pressure, and prices usually follow. 

Magazine: Big questions: Would Bitcoin survive a 10-year power outage?

Pakistan's ability to “move fast” with crypto regulation and adoption could it become a world leader in crypto by 2030, according to former Binance CEO Changpeng ‘CZ’ Zhao. 

In a recent interview with Pakistan Crypto Council CEO Bilal bin Saqib, CZ credited Pakistan’s leadership for recognizing the demand for digital assets among its relatively young and tech-savvy population.

“I think it's fantastic to see the country of this size are able to have this clear vision from the leadership and ability to move at this speed.”

“If we keep moving at this speed in five years, Pakistan will be the crypto leader, one of the crypto leaders in the world,” said CZ, who serves as strategic adviser to the crypto council.

A conversation between Changpeng Zhao (@cz_binance), Founder of Binance and Chairman PVARA, @BilalBinSaqib on the future of crypto in Pakistan.

From Pakistan’s potential to tokenization and what comes next for the virtual asset economy.

Timestamps:

- Why Pakistan for Crypto?:… pic.twitter.com/ILGHOMBdWY

— Pakistan Virtual Assets Regulatory Authority (@PakistanVARA) December 30, 2025

Pakistan has taken major steps to formalize its crypto ecosystem this year, including establishing the Pakistan Virtual Assets Regulatory Authority, permitting crypto exchanges Binance and HTX to operate in the country, building a Bitcoin (BTC) reserve, and exploring real-world asset tokenization to attract foreign investment and boost liquidity.

CZ bullish on Pakistan’s tokenization idea

Asked about the benefit tokenizing Pakistan’s stock market could bring, CZ responded:

“Which country doesn't want the global population to buy their stocks?” 

“Tokenizing stocks allows the global population to buy those tokens, that is basically direct investment into those stocks of Pakistan,” CZ said.

CZ encouraged Pakistan to also move quickly on its tokenization plans, noting that the countries that implement them first will reap the most benefits.

Smaller Pakistani players can experiment with crypto too 

For individuals and smaller businesses, CZ said blockchain offers many opportunities compared to traditional banking and AI due to its lower barrier to entry: 

“If a young person wants to start a bank, it's pretty limited opportunities [...] If they want to build an AI company, they probably don't have the large data, the large compute, all the chips, so both of those industries require quite a bit of resources to do a startup.”

On the other hand, blockchain and crypto are different because it’s all virtual, CZ said, adding: 

“The blockchain will never reject you.”

CZ said “Blockchain is one of the best places for entrepreneurs” but acknowledged there needs to be more education, university programs, and incubators to foster innovation.

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The aggressiveness of Federal Reserve rate cuts in 2026 will determine whether retail investors return to the crypto market next year, according to a crypto analyst.

But there are doubts about how likely the Fed is to continue cutting, after already making three reductions in 2025.

Clear Street managing director Owen Lau told CNBC on Tuesday that Fed rate decisions are “one of the key catalysts for the crypto space in 2026.”

“Retail will be more excited to get into crypto, institutions will be more excited to get into crypto,” Lau said.

Interest rate cuts are typically bullish for crypto assets, as traditional investments like bonds and term deposits become less attractive, pushing investors toward riskier assets such as Bitcoin (BTC) and other cryptocurrencies as they look for higher returns.

Fed is “prepared to adjust the stance of monetary policy”

The Fed’s December minutes, released on Tuesday, indicate that the central bank is open to adjusting rates next year to align with broader economic goals.

“The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals,” the minutes said.

However, some data shows the market is skeptical whether the Fed will continue cutting rates in the first months of the year, according to crypto prediction platform Polymarket. 

Polymarket odds rise significantly for the Fed making a rate cut in April. Source: Polymarket

Polymarket’s data shows just a 15% probability of a rate cut in January, while confidence is higher for a rate cut in March, with a 52% chance.

The Fed has implemented three rate cuts in 2025, and the market had anticipated most of them. The first cut, a 25 basis point reduction, came in September. About a month later, on Oct. 5, Bitcoin surged to a new high of $125,100. 

However, Bitcoin’s uptrend was short-lived by a significant liquidation event on Oct. 10 that led to $19 billion wiped out in leveraged positions.

Crypto market sentiment continues to decline

This was followed by another 25 basis point rate cut in October, and a further 25 basis point cut in December, though the minutes showed that Fed members were divided on whether the December cut was necessary.

Bitcoin is down 29.3% from its October all-time high, trading at $88,439 at the time of publication, according to CoinMarketCap.

It comes amid a decline in sentiment for the broader crypto market.

The Crypto Fear & Greed Index, which measures overall crypto market sentiment, has been in the “Extreme Fear” territory since Dec. 13. 

On Wednesday, the index posted an “Extreme Fear” score of 23.

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The US government has filed a letter opposing the introduction of an amicus brief from the digital asset advocacy group DeFi Education Fund as the court considers a possible retrial for two brothers allegedly behind a $25 million exploit of the Ethereum blockchain.

In a Tuesday filing in the US District Court for the Southern District of New York, interim US Attorney Jay Clayton submitted a letter to Judge Jessica Clarke requesting that a brief from the DeFi Education Fund (DEF) not be accepted while the court considers a motion to dismiss the case against Anton and James Peraire-Bueno. 

“Detached from the trial record, the brief merely recites legal arguments already rejected by this Court,” said Clayton, referring to the DeFi Education Fund’s amicus brief, adding:

“Here, where the Court has already ruled on the legal issues presented in the amicus brief and DEF does not offer any unique information relevant to the pending motion before the Court, DEF’s submission is not likely to aid the Court’s consideration of the particular issues [over a motion to acquit].”

Source: PACER

In November, Clarke declared a mistrial in the case after jurors failed to agree on whether to convict or acquit the brothers, alleged to have committed the exploit using automated maximal extractable value (MEV) bots. Within a week, the US government requested the court schedule a retrial for the brothers “as soon as practicable in late February or early March 2026.”

According to a proposed draft of the DEF brief filed on Dec. 19, the organization supported the motion to acquit or dismiss the indictment, arguing that the case had “broader implications” for the industry.

“[P]rosecutions like this one bring ambiguity and fear to software developers, chilling participation in DeFi and driving participants abroad,” said DEF, adding: “The DOJ should not get ahead of prospective lawmaking by bringing indictments based on ill-fitting interpretations of existing law, which will stifle growth by sowing confusion about the governing rules.”

Cointelegraph reached out to the DeFi Education Fund for comment, but had not received a response at the time of publication.

Crypto industry weighs in on implications of case

With the future of the Peraire-Bueno brothers uncertain, many in the crypto industry are still looking to how the case could affect MEV-related activities.

Crypto advocacy organization Coin Center filed an amicus brief during the criminal trial, arguing against the US government’s theory of the case. Prosecutors also requested that the court not accept the brief.

The brothers initially faced charges of conspiracy to commit wire fraud, money laundering and conspiracy to receive stolen property. If retried on the same charges and found guilty, they could potentially be sentenced to up to 20 years in prison for each count.

Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice

Prenetics Global Limited halted its Bitcoin treasury buying program, ending daily purchases announced in June to refocus on its consumer health brand co-founded with former football player David Beckham.

According to an announcement on Tuesday, the company paused its Bitcoin purchases on Dec. 4 and will not pursue additional BTC acquisitions, focusing instead on scaling its nutritional brand IM8, which Prenetics said surpassed $100 million in annualized recurring revenue within 11 months of launch.

The company will keep 510 Bitcoin (BTC) on its balance sheets, along with more than $70 million in cash and cash equivalents. IM8, a subsidiary of Prenetics, sells an all-in-one daily nutrition supplement marketed as a replacement for multiple standalone products.

In June, company launched a Bitcoin reserve strategy, investing $20 million to acquire about 187 Bitcoin at an average price of $106,712 per coin. Bitcoin was trading at $88,198 at time of writing, implying an unrealized loss of about 17%, or about $3.4 million on the position.

Prenetics' shares fell 3.32% in Tuesday trading on Nasdaq, while still up nearly 170% on the year, according to Google Finance data.

Source: Google Finance

Strategy says BTC price will keep rising over time

According to data from BitcoinTreasuries.NET, 192 publicly traded companies now hold Bitcoin on their balance sheets, collectively accounting for nearly 1.1 million BTC. 

A large share of that total is concentrated in Strategy, the Michael Saylor-led company whose pivot in 2020 laid the blueprint for corporate Bitcoin treasury companies. Following Strategy’s latest purchase on Monday, the company holds 672,497 Bitcoin.

Entities holding Bitcoin. Source: BitcointTeasuries.NET

Strategy chief financial officer Andrew Kang said Tuesday on a podcast that the company continues to buy and hold Bitcoin, citing expectations of further upside. He said:

We know it's [Bitcoin] going to go from where it is today back to 125k, up to 200k, up to a million, and up to 21,000,000 one day. That all still is going to happen. It just is going to happen over a period of time […] And so for us, why we keep doing it [buying] with that principle in mind.”

Managing director of GoMining Institutional, Fakhul Miah, told Cointelegraph in June that he feared “copycat” companies that are “trying to create Bitcoin banks without proper safeguards or risk management.”

Magazine: Quantum attacking Bitcoin would be a waste of time: Kevin O’Leary

South Korean lawmakers have reportedly delayed submission of a cryptocurrency bill that could allow the issuance of domestic stablecoins as key issues remain unresolved.

According to a Tuesday Yonhap News report, officials in South Korea’s government were continuing to work on the Digital Asset Basic Act, but expected to submit the bill sometime in 2026. The reported delay was due to “major issues that raise disagreements with relevant organizations, including stablecoin issuers.”

The bill, proposed by the country’s ruling Democratic Party in June, would permit the issuance of stablecoins pegged to the won and is expected to boost South Korea’s crypto market. Under the proposed bill, stablecoin issuers would reportedly be required to entrust all their reserve assets to authorized custodies, like banks.

According to the report, the disagreements over the crypto bill included whether it was necessary to authorize a group of organizations to oversee stablecoin issuers prior to approval. The country’s Financial Services Commission is reviewing the proposal, but also considering limiting financial institutions’ role in stablecoins to encourage participation from technology companies.

Addressing the issuance of local stablecoins was one of South Korean President Lee Jae-myung’s promises to residents prior to being sworn into office in June. He also advocated for the country’s national pension fund to invest in digital assets and backed the issuance of exchange-traded funds tied to Bitcoin (BTC).

South Korea to receive Do Kwon after US sentence?

Terraform Labs co-founder Do Kwon, who was recently sentenced to 15 years in prison in the United States related to his role in the collapse of the company’s ecosystem, could serve part of his prison time in South Korea, where he holds citizenship. He could also face up to 40 years in prison locally, according to a filing from Kwon’s legal team.

Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice

The digital asset sector is closing out a turbulent quarter marked by losses, strained market infrastructure and investor disappointment. Yet one corner of the market stood out: privacy-focused cryptocurrencies.

According to Grayscale’s latest quarterly market summary, privacy emerged as an unexpected investment theme in the fourth quarter, with assets such as Zcash (ZEC) significantly outperforming the broader crypto market. 

Zcash’s price surged in the fourth quarter, rising from about $50 in mid-September to a peak near $700 by mid-November, CoinMarketCap data shows.

The performance coincided with a sharp increase in Zcash’s use of shielded addresses, which conceal transaction details such as the sender, recipient and amount.

Zcash’s shielded supply is surging as privacy takes primacy. Source: Grayscale

Other privacy-preserving cryptocurrencies also posted relative gains during the quarter, including long-established projects such as Monero (XMR) and Dash (DASH), underscoring renewed investor interest in confidentiality-focused blockchains. 

Defensive positioning in privacy?

Grayscale partially attributed the unexpected surge in privacy-focused cryptocurrencies to what it described as “more defensive positioning within crypto markets.” 

In Grayscale’s sector framework, these privacy tokens fall under the “Currencies” subsector, which includes assets primarily used as mediums of exchange or stores of value rather than application platforms.

While the Currencies subsector declined more than 15% during the quarter, it still significantly outperformed other segments, including financials, smart contract platforms, consumer and culture, and artificial intelligence.

Gains in privacy-focused cryptocurrencies helped the Currencies subsector outperform other segments in the fourth quarter. Source: Grayscale

Historically, defensive positioning within crypto markets has often centered on Bitcoin (BTC), which some investors have viewed as a form of digital gold during periods of macroeconomic uncertainty. In recent years, however, Bitcoin has tended to trade more closely in line with broader equity markets, particularly technology stocks.

That relationship showed signs of strain in the fourth quarter, as correlations weakened amid structural stress across the crypto sector, including the Oct. 10 marketwide liquidation event, which analysts have characterized as a “controlled deleveraging.”

Related: What’s behind the surge in privacy tokens as the rest of the market weakens?

Nasdaq-listed Cypherpunk Technologies has expanded its crypto corporate treasury with a new purchase of Zcash tokens for about $29 million.

According to Tuesday’s announcement, the company bought 56,418 Zcash (ZEC) paying an average price of $514 per token. The purchase brings Cypherpunk’s total holdings to 290,062.67 ZEC, or about 1.76% of the token’s circulating supply.

Zcash, launched in 2016 as a Bitcoin fork, is a privacy-focused blockchain that uses zero-knowledge proofs to verify transactions without revealing the sender, recipient or transaction amount. Like Bitcoin, its native token has a 21 million cap.

According to Cypherpunk's chief investment officer, Will McEvoy, the company aims to accumulate 5% of the total ZEC supply and it is “well positioned for a market that is repricing the societal importance of privacy.”

Formerly a biotech company called Leap Therapeutics, the company rebranded in November as Cypherpunk Technologies, as a Zcash-focused digital asset company. The company’s stock has surged almost 170% to about $1.18 at time of writing, from $0.44 before it rebranded, according to Google Finance data.  

Cypherpunk is backed by Winkevoss Capital, the venture capital firm of Gemini founders Tyler and Cameron Winklevoss.

Source: Google Finance

Zcash outpaces Bitcoin as privacy debate returns

Zcash has surged more than 800% this year, rising to about $536 per token from roughly $58 a year ago, according to CoinGecko data, while Bitcoin (BTC) is down about 5% over the same period.

The performance follows renewed privacy debates in 2025, driven by advances in AI and digitalization, alongside growing support from influential crypto commentators.

Source: CoinGecko

Several crypto industry figures, including former BitMEX CEO Arthur Hayes and Helius co-founder Mert Mumtaz, have highlighted Zcash’s privacy features as a factor behind the token’s recent performance, which has outpaced much of the broader altcoin market.

Zcash Foundation executive director Alex Bornstein told Cointelegraph that the asset’s recent momentum reflects organic demand, driven by rising unease over government overreach and digital privacy.

On Monday, Hayes wrote on X that ZEC’s price may be setting up for an initial move toward the $1,000 level. On a recent podcast, he said markets could see renewed liquidity through behind-the-scenes Fed funding tools, a shift he believes would favor zero-knowledge technologies and privacy tokens such as ZEC.

Still, not everyone is convinced an upward move is imminent. Analyst Eric Van Tassel warned on Saturday that a “corrective pullback” to $400 is possible.

Magazine: Big questions: Would Bitcoin survive a 10-year power outage?

Digital asset management company Grayscale Investments has filed to list and trade shares of an exchange-traded product (ETP) tied to Bittensor’s native token, TAO.

In a Tuesday filing with the US Securities and Exchange Commission, Grayscale filed an S-1 registration statement for shares of its Bittensor Trust (TAO). The filing came more than a year after the asset manager introduced the TAO trust and signals Grayscale’s move to transition its over-the-counter TAO product to NYSE Arca.

Source: SEC

The filing is subject to SEC review before listing under the ticker GTAO. The SEC has green-lit several exchange-traded fund offerings from Grayscale tied to cryptocurrencies, including those for Bitcoin (BTC) and Ether (ETH).

Grayscale’s proposed TAO investment vehicle came about two weeks after Bittensor went through its first halving event in December as part of a plan to reach a 21 million token supply cap, the same as Bitcoin. According to data from Nansen, the price of TAO was $222.54 at the time of publication.

Bittensor, a decentralized, open-source machine-learning network for AI services, first launched in 2021 under the name Kusanagi. Like many cryptocurrencies, the network’s TAO (TAO) token experienced significant volatility in 2025, reaching an annual high of more than $560 in January before dropping to about $220 in April.

Grayscale is eyeing US IPO in 2026

In November, Grayscale filed with the SEC to list shares of its Class A common stock on the New York Stock Exchange under the ticker symbol GRAY. The initial public offering, which has not advanced since the filing, would put the asset manager among many other crypto companies, including Coinbase and Gemini.

Kraken, another US-based crypto exchange, filed for an IPO confidentially in November. The company reportedly reached a $15 billion valuation in September following a $500 million funding round.

Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice

Despite sluggish Ether price action, developers are increasingly choosing Ethereum as a settlement layer, with the fourth quarter shaping up to be a record period for the network.

Data from Token Terminal shows that the number of new smart contracts created and published on the Ethereum blockchain reached an all-time high of 8.7 million in the fourth quarter.

The milestone marked a sharp rebound from the previous two quarters, when contract deployment activity was significantly lower.

Ethereum contract deployments hit a new record in Q4 2025, surpassing prior highs by a wide margin. Source: Token Terminal

According to Token Terminal, the increase reflects organic growth, driven by real-world asset (RWA) tokenization, stablecoin activity and core infrastructure development. The blockchain analytics platform noted that “Ethereum is quietly becoming the global settlement layer.”

The trend is notable because contract deployment is often viewed as a leading indicator of future network activity, typically preceding growth in users, transaction fees and maximal extractable value (MEV), the value captured by validators and block builders through transaction ordering. 

Over time, these factors tend to contribute to broader on-chain economic activity and can influence Ether’s (ETH) price performance.

Ether briefly surpassed its previous all-time high earlier this year, trading near $5,000, before reversing sharply following the marketwide liquidation event on Oct. 10. At the time of writing, ETH is trading around $3,000.

Related: $11B Bitcoin whale sells $330M ETH, opens massive $748M longs in top cryptos

Ethereum remains a major hub for crypto activity

As competition among layer-1 blockchains intensifies, with rivals such as Solana emphasizing high throughput and low fees, Avalanche focusing on customizable subnets and BNB Chain leveraging exchange-linked liquidity, data suggests Ethereum continues to serve as a central pillar of the broader digital asset ecosystem.

Ethereum remains the dominant network for RWA tokenization, capturing the largest share of on-chain RWA market capitalization.

Researchers at RedStone have described Ethereum as the “institutional standard” for hosting tokenization initiatives, citing its security, liquidity depth and established infrastructure.

Ethereum remains the top network for RWA deployment by far. Source: RWA.xyz

Ethereum also continues to anchor the stablecoin market. Of the more than $307 billion in stablecoins currently in circulation, over half reside on the Ethereum network, according to data from DefiLlama. 

The network’s stablecoin activity is dominated by Tether’s USDt (USDT) and Circle’s USDC (USDC), which together account for the majority of Ethereum-based supply.

Related: BitMine locks up $1B in Ether as big corporates stake ETH for yield

XRP (XRP) held above a key demand zone that has provided support for its price throughout 2025. Will holding this level and a reducing balance on exchanges trigger the start of a sustained recovery in 2026?

Key takeaways:

XRP supply on exchanges has dropped to an 8-year low, signalling reduced selling pressure.

XRP price bulls look to establish strong support at $1.78 for the next leg up.

XRP supply on exchanges fall to seven-year lows

As Cointelegraph reported, there has been a sharp decrease in the XRP supply on exchanges over the last 60 days, according to data from Glassnode.

Related: XRP price below $2: Negative sentiment signals ‘strong rebound’ ahead

The XRP balance on exchanges dropped by 2.16 billion tokens to 1.6 billion on Tuesday, from 3.76 billion on Oct. 8, levels last seen in August 2018.

XRP reserve on exchanges. Source: Glassnode

A reducing balance on exchanges suggests a lack of intention to sell by holders, reinforcing the upside potential for XRP. 

“$XRP supply tightens with about 1.5 Billion left on exchanges,” said trader and  analyst LeviRietveld in a Monday post on X, adding:

“Bullish, grab yours now!”

The sharp decline coincided precisely with record exchange outflows, as the XRP net position change among exchanges fell by 1.4 billion XRP on Oct. 19, marking the largest spike in history.

XRP: Exchange net position change. Source: Glassnode

Such outflows typically indicate strong accumulation by large holders, who move tokens to cold storage or into investment products, thereby reducing immediate sell-side pressure.

“ETFs are draining $XRP from exchanges, tightening liquidity,” said pseudonymous trader Skipper in a Tuesday analysis on X, adding that the altcoin could cement its position as an institutional-grade asset in 2026. 

The trader added:

“As liquidity tightens, XRP’s price discovery is fundamentally shifting. XRP is now entering a more structural phase.” 

XRP sits on strong support above $1.78

XRP’s recent drawdown was stopped by buyer congestion from a key demand zone between $1.60 and $1.84, which has supported the price throughout 2025.

Holding above this support level has previously been preceded by significant recoveries in XRP price, as shown in the chart below.

XRP/USD daily chart. Source: Cointelegraph/TradingView

Glassnode’s UTXO realized price distribution (URPD), which shows the prices at which the current supply was created, indicates that $1.78 is the most significant support for XRP, where investors acquired 1.87 billion tokens.

XRP: UTXO realized price distribution. Source: Glassnode

There is no significant support below this level, and losing it dims any hopes of an XRP price recovery in 2026.

On the other hand, a rebound from this zone could confirm a triple-bottom breakout in the weekly timeframe targeting $3.79, according to analysts VipRoseTr. 

“A breakout from the downtrend channel signals a possible bullish reversal.”

Source: VipRoseTr

As Cointelegraph reported, XRP’s price could remain range-bound into 2026, with analysts saying a stronger uptrend will likely depend on fresh bullish catalysts emerging later in the cycle.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.

Key takeaways

Strategy funds its dip buying primarily through ATM equity sales rather than operating cash flow.

Preferred shares and other financing tools add buying power but create ongoing dividend and interest obligations.

A $1.44-billion reserve is intended to reduce “forced seller” concerns during prolonged market slumps.

The model’s constraint is the cost of capital. Dilution risk, market sentiment and index rule changes can tighten the loop.

Strategy just spent another $980.3 million on Bitcoin (BTC), adding 10,645 BTC at an average price of $92,098 and lifting its total holdings to 671,268 BTC.

It’s the kind of headline the company has trained the market to expect. When price weakness shows up, Strategy treats it like inventory season.

What makes this round more interesting is the backdrop. Bitcoin has been sliding sharply from recent highs, and Strategy’s own stock often feels that drawdown as a leveraged proxy.

At the same time, the firm has been building a $1.44-billion reserve to calm concerns that dividend and interest obligations could eventually force a Bitcoin sale during a prolonged slump.

So, the real question isn’t whether Strategy wants to buy dips; it’s how it keeps finding the money to do it and how durable that machine is if markets stay ugly.

The “Bitcoin treasury” model

Strategy treats Bitcoin as its balance sheet centerpiece, using public market financing to grow holdings faster than a typical company could through operating cash flow.

In practice, that means raising capital through instruments such as at-the-market (ATM) share sales and other issuances, then deploying the proceeds into BTC even when prices are volatile.

To keep the story legible for investors, Strategy leans on a set of Bitcoin-native metrics. The key one is “BTC Yield,” which the company defines as the period-to-period change in Bitcoin per share, its “BPS” ratio, tracking whether each diluted share is backed by more Bitcoin over time.

So, the pitch becomes less “we bought more BTC” and more “we increased BTC exposure per share.”

Did you know? Strategy’s Bitcoin treasury model was formally adopted on Sept. 11, 2020, when the company’s board approved a Treasury Reserve Policy, making Bitcoin its primary treasury reserve asset, alongside excess cash and short-term investments.

How Strategy funds purchases when BTC is falling

Strategy’s dip buying is financed through the capital markets, mainly by issuing securities and converting that demand into Bitcoin.

The company is unusually explicit about this in its filings. In the same Form 8-K that disclosed the latest 10,645-BTC purchase, it also stated that the Bitcoin was acquired using proceeds from sales under its ATM programs.

1) The “ATM” tap (common stock)

An ATM program is essentially a standing authorization to sell stock into normal market trading over time rather than executing a single, large capital raise.

In the week tied to the latest Bitcoin purchase, Dec. 8-14, 2025, Strategy reported selling 4,789,664 shares of MSTR for $888.2 million in net proceeds.

That setup explains how the company can keep purchasing even when the macro environment looks ugly. It allows Strategy to convert equity demand into Bitcoin quickly without waiting for a perfect “risk on” moment.

2) Preferred stock as a second funding lane

Alongside common stock, Strategy has also been issuing multiple preferred series. The Form 8-K lists STRF, STRK and STRD, among others.

During the same week, the company reported selling preferred shares as well, including STRD and smaller amounts of other series, as part of the funding mix.

The trade-off is that preferred shares typically carry ongoing dividend obligations, which matter more when prices fall and sentiment turns. But they also give Strategy another avenue to raise capital when common stock conditions are less favorable.

3) Debt and convertibles: Leverage with a long fuse

Even when near-term purchases are funded through ATM flows, Strategy’s broader approach has long included debt and convertible-style financing to scale Bitcoin exposure.

If the company believes long-term Bitcoin appreciation outpaces its long-term cost of capital, it will keep stacking as long as markets are willing to fund it on tolerable terms.

Analysts who track the structure often describe it as a premium and leverage machine. When the stock trades at a rich valuation relative to the value of its Bitcoin holdings, issuance becomes easier. When that premium compresses, the machine slows.

Put together, it’s a repeatable loop: Issue common stock, preferred shares or debt, raise cash, buy BTC, publish Bitcoin per share progress and then try to sustain investor demand for the next round.

Because of this, the durability of Strategy’s dip buying, especially during drawdowns, depends less on conviction and more on whether that loop stays open.

Why downturns can function as accumulation periods for this model

On paper, a market downturn is the worst time to be a serial buyer. Prices are falling, headlines turn negative, and lenders become more selective.

For Strategy, though, the downturn itself is part of the pitch. The company is less focused on timing the bottom and more on proving it can keep accumulating through volatility.

The catch is that “buying the dip” only works if Strategy’s cost of capital remains manageable.

When its stock trades at a meaningful premium relative to the value of the Bitcoin it already holds, issuing equity can appear accretive to the company’s Bitcoin per share narrative.

When that premium narrows, something that often happens when Bitcoin and other risk assets are sliding, issuance becomes more expensive, dilution hurts more, and each incremental purchase is harder to justify.

This is where the strategy becomes reflexive. Strong equity demand makes funding easier, which supports more Bitcoin buying and can reinforce demand.

In a sustained drawdown, the loop can run in reverse. Weaker sentiment compresses the premium, tightens funding and slows accumulation. Strategy can still buy in that environment, but the pace is dictated by market appetite for its paper, not by how “cheap” Bitcoin looks on a chart.

Did you know? Strategy is known for buying the dip. In late March 2025, it scooped up 22,048 BTC for about $1.92 billion, roughly $86,969 per coin, according to its March 31 filing covering purchases made between March 24 and March 30.

The $1.44-billion “USD Reserve” and what it’s for

The most direct answer Strategy has offered to the “What if this drawdown lasts?” question is its $1.44-billion reserve, a cash buffer explicitly set aside to pay preferred stock dividends and interest on outstanding debt.

The company says the reserve was funded using proceeds from the sale of Class A common stock through its ATM program.

This matters because Strategy’s capital stack is now part of the story. Preferred dividends and debt interest do not wait politely for Bitcoin to recover. If markets freeze and the company cannot issue comfortably, those payments become the point where critics start asking whether Bitcoin holdings might ever be used to plug the gap.

Strategy is trying to preempt that narrative. In its Dec. 1 release, the firm said it intends to keep enough in its USD Reserve to fund at least 12 months of these payments, with the goal of building toward 24 months or more over time. It also stated that the reserve currently covers 21 months of dividends.

In short, it’s a “no forced selling” signal, aimed at making the downturn survivable while the BTC buying machine keeps running.

Dilution, higher carrying costs and index-rule pressure

The first constraint here is dilution.

Strategy’s accumulation loop works because it can routinely sell new securities, especially common stock, through its ATM program and convert that demand into Bitcoin. The flip side is that the share count rises over time, which is why the company encourages investors to judge performance through Bitcoin per share metrics rather than raw BTC totals.

In a downturn, dilution becomes a louder critique because the stock price is usually weaker at the same time the company is issuing into the market.

Next comes the carrying cost.

Preferred dividends and debt interest are fixed obligations. When capital becomes more expensive, those obligations do not shrink. The company then needs fresh issuance, sufficient cash on hand — hence the USD Reserve — or another liquidity source to keep payments boring.

The longer the drawdown lasts, the more investors focus on whether financing remains open on reasonable terms.

Then there’s index and rule sensitivity.

Inclusion in major indexes can support marginal demand for the stock, but classification frameworks are still evolving for firms whose core story is digital asset treasury management. MSCI’s consultation on how to treat companies with significant Bitcoin treasuries is one of the clearest watch items because an unfavorable outcome could change how some funds are allowed to hold or size the exposure.

Did you know? During the 2022 crypto crash, Strategy, then known as MicroStrategy, recorded a $917.8-million paper loss on its Bitcoin holdings in Q2 2022, disclosed with its earnings on Aug. 2, 2022.

Why earnings can swing wildly now

There’s another reason Strategy can look “more volatile” on paper than it feels operationally: accounting. New US guidance for crypto held by companies, ASU 2023-08, moves qualifying crypto assets onto a fair value basis, with unrealized gains and losses flowing through net income each reporting period.

That means a sharp Bitcoin move late in a quarter can materially swing headline earnings, even if the company did not sell a single coin and nothing changed in its day-to-day liquidity.

For investors, reported profit can now resemble a proxy for Bitcoin’s chart. In a downturn, that can amplify negative optics, even when Strategy is still funding buys through issuance and cash reserves.

What keeps the “strategy” running

Strategy’s downturn buying looks relentless because the company has built a repeatable mechanism: sell paper, raise cash, buy Bitcoin, then measure success in Bitcoin per share terms. The question going forward is whether that mechanism stays cheap and open when markets remain stressed.

Watch how much room Strategy still has in its ATM programs and whether it continues converting issuance into purchases at anything close to the current pace.

Watch whether the $1.44-billion USD Reserve remains a growing cushion or becomes a reminder that dividends and interest are real bills that must be paid regardless of Bitcoin’s mood.

Keep an eye on how index providers and classification bodies treat digital asset treasury companies because shifts there can subtly change the pool of buyers that supports the entire loop.

Russia has proposed a new draft bill seeking to crack down on unregistered cryptocurrency miners in the country, following concerns from the finance minister about illegal mining activity.

Russia’s Ministry of Justice has proposed imposing penalties of up to 1.5 million rubles (around $19,000) and up to two years of forced labor for illegal cryptocurrency mining, according to new draft amendments to the Criminal Code, published on Monday.

For crypto mining activities involving outsized profits, the maximum sentence could reach up to five years in prison, 480 hours of forced labor, and a fine of up to 2.5 million rubles ($31,800).

Illegal cryptocurrency mining by an unregistered “organized group” that has realized outsize profits could lead to fines of up to 2.5 million rubles, or five years of either forced labor or imprisonment.

New draft amendments to the Criminal Code of the Russian Federation. Source: regulation.gov.ru

Related: EU targets crypto platforms in latest Russia sanctions package

Only 30% of miners registered

The new draft bill signals the government’s latest effort to capture part of the revenue from a growing crypto mining industry in the country. Miners are required to fill out a special monthly tax form on the amount of digital currency produced. 

However, only about 30% of cryptocurrency miners have registered and legalized their mining operations as of June 19, Russia’s Deputy Minister of Finance, Ivan Chebeskov, told news outlet Tass at the time, adding:

“Our general approach when we introduced mining regulation into this industry was to bring this industry out of the shadows as much as possible. We have not yet completed this process.”

Miners with a monthly consumption of under 6,000 kWh are considered physical persons and can mine without registration with the Federal Tax Register, but need to pay a personal income tax on the mined cryptocurrency, according to a decree published on Nov. 1, 2024.

Related: These three altcoins came back from the dead in 2025

There were 1,364 registered cryptocurrency miners in Russia at the end of October, according to Russia’s minister of finance, Anton Siluanov, speaking at a plenary session of the State Duma.

In August 2024, Russian President Vladimir Putin signed a set of laws providing a regulatory framework for cryptocurrency mining, effective Nov. 1, 2024. The draft imposed compulsory registration and taxation forms for all entities engaging in mining, including infrastructure providers.

The law also prohibits foreign entities from mining in Russia and allows the government to restrict mining in certain regions, a matter that spurred criticism for not fully legalizing crypto mining in the country.

Magazine: Bitcoin is ‘funny internet money’ during a crisis: Tezos co-founder

In early 2025, Michael Saylor’s technology company MicroStrategy officially rebranded to Strategy and adopted a Bitcoin-themed visual marketing program to reflect its core focus as the world’s largest corporate BTC holder.

As of Dec. 30, Strategy has accumulated 672,497 Bitcoin (BTC), valued at nearly $59 billion and acquired at an average price of $74,997 per coin. With Bitcoin trading near $88,000, the company is sitting on an unrealized gain of roughly 17%.

However, despite the paper profits, pressure has been building. Strategy must continue servicing dividends and financing costs tied to the preferred shares and debt used to fund its Bitcoin purchases, creating fixed cash obligations regardless of Bitcoin’s price moves.

Those concerns resurfaced in November when Bitcoin slid to $82,000. To reassure investors about its ability to meet dividend and debt payments, on Dec. 1, Strategy said it established a $1.44 billion cash reserve to cover at least 12 months of preferred dividends and debt interest.

As 2026 approaches, investors are questioning whether the model can withstand deteriorating market conditions.

From business intelligence to Bitcoin treasury

Strategy first started buying Bitcoin in August 2020, announcing its first purchase of 21,454 BTC for $250 million as a strategic treasury reserve asset. Ever since, the company has evolved into a full-scale capital markets strategy.

Through at-the-market (ATM) equity programs, convertible notes and preferred stock issuances, Strategy has raised capital to acquire Bitcoin without selling its core holdings.

Strategy’s Bitcoin holdings. Source: BitcoinTreasuries.NET

The result is a structure that offers leveraged exposure to Bitcoin while maintaining a legacy software business that still generates operating revenue, though its contribution to valuation has diminished significantly.

Notably, Strategy’s profit swings in 2025 were also heavily influenced by a shift to fair-value accounting for Bitcoin, which requires the company to revalue its BTC holdings each quarter and book unrealized gains or losses in net income. This change has made earnings more volatile, as movements in Bitcoin’s price now flow directly through reported results, even when no Bitcoin is sold.

“Strategy stopped being a software story the day Bitcoin became 98% of the narrative. Today it’s a Bitcoin hedge fund wearing a BI ticker,” Marvin Bertin, co-founder and CEO at Maestro, told Cointelegraph.

He said the analytics business still exists, but is negligible next to the company’s massive BTC balance sheet.

For years, Strategy’s Bitcoin holdings made the company a preferred vehicle for investors seeking equity-based Bitcoin exposure, effectively serving as a proxy for BTC at a time when direct ownership or regulated spot products were not widely available.

However, Bitcoin ETFs have now introduced cheaper exposure for institutions. Moreover, MSCI is consulting on potential index-rule changes that could exclude crypto-heavy “digital asset treasury” companies, which Strategy says could force passive outflows if implemented.

MSCI is a major global index provider whose benchmarks are used by trillions of dollars in passive and active investment funds to decide what stocks to buy. Strategy’s removal from an MSCI index matters because index-tracking funds are often forced to sell the stock, which can reduce demand, liquidity and visibility.

Related: Strategy adds nearly $1B in Bitcoin as market slump pressures MSTR stock

Can Strategy’s Bitcoin model survive 2026?

Jamie Elkaleh, chief marketing officer of Bitget Wallet, told Cointelegraph that Strategy’s model “remains sustainable as long as the crypto market stays constructive.”

However, heading into 2026, he warned of “persistent dilution, sensitivity to interest-rate conditions, and the possibility that investor sentiment turns against leveraged crypto balance sheets.”

“If markets tighten or appetite for equity-financed BTC exposure weakens, this approach becomes far more difficult to execute,” Elkaleh added.

Strategy shares are down 44% YTD. Source: Google Finance

Bertin echoed this sentiment, noting that Strategy’s Bitcoin model works well in strong bull markets, where the company can issue preferred stock and equity at a premium to its BTC holdings.

However, in flat or choppy markets, that premium could turn into a discount, making new issuance value-destructive. Bertin warned that rising rates, competition from spot Bitcoin ETFs and investor fatigue could stall the model, while dividend obligations may eventually force the company to sell Bitcoin.

Related: MSCI’s Bitcoin snub is like penalizing Chevron for oil: Strategy CEO

What happens to Strategy if BTC drops 20%–30%?

Bitcoin is a highly volatile asset. Historically, the cryptocurrency has even fallen 20%–40% during bull markets before resuming its trend.

“We could easily see a significant correction in crypto assets in the coming bear market of 2026 and beyond, and a 20%-30% correction in Bitcoin isn't that unlikely to happen,” Joel Valenzuela, Dash DAO core member, said.

A drop this size wouldn’t immediately threaten Strategy’s survival, but it could break the mechanics of its business model, Bertin said. He explained that a sharp decline would shrink the value of its Bitcoin holdings and erase the equity premium that allows the company to issue shares above Net Asset Value (NAV), which is calculated by subtracting the fund’s total liabilities from its total assets and then dividing by the number of outstanding shares.

Bitcoin price is down nearly 6% YTD. Source: CoinMarketCap

At the same time, Strategy would still face large cash obligations from high-yield preferreds and convertible instruments. That would leave few attractive options, including issuing stock at a discount, selling Bitcoin to cover payouts, or operating as an expensive proxy in a market now dominated by low-cost Bitcoin ETFs.

“It risks turning Strategy from the flagship of corporate Bitcoin into the case study in how leverage and dilution quietly kill a great narrative,” Bertin said.

However, Elkaleh noted that the scale of Strategy’s holdings “provides long-term optionality for recovery if the broader crypto cycle stabilizes.” He still warned that, in the short term, any major BTC drawdown would meaningfully strain its capital structure.

Related: Strategy responds to MSCI letter, makes case for index inclusion

Bull case vs. bear case scenarios

In the optimistic scenario, Bitcoin resumes its rally, restoring Strategy’s NAV premium, which has briefly dropped below 1 in recent months, meaning its market value was less than the value of its underlying Bitcoin holdings minus liabilities.

Elkaleh said Bitcoin could break above $150,000 next year, enabling Strategy to resume accretive issuance and deliver equity gains of 100% or more.

In his bullish case, Bertin predicted a strong Bitcoin breakout with sustained ETF inflows restoring Strategy’s equity premium, allowing it to issue stock above NAV, retire costly debt and once again outperform Bitcoin as a high-beta institutional proxy.

However, he warned that in the bear case, the NAV discount persists, equity raises “become value-destructive, preferreds and converts are a growing tax on the treasury, and ‘never sell’ collides with basic balance-sheet math.”

Valenzuela also warned that forced Bitcoin sales could trigger “a cascading liquidation event,” potentially affecting broader crypto markets.

“The overlooked angle is that the bull case is just a hope, while the bear case is an accounting certainty,” Bertin said.

Related: Saylor pitches Bitcoin-backed banking system to nation-states

Conclusion

There is no single metric that defines Strategy’s success in 2026. Investors will need to monitor Bitcoin holdings, average acquisition cost, leverage ratios, preferred and debt issuance and crypto market performance.

What’s clear is that Strategy is no longer viewed as a traditional operating company. It has become a leveraged Bitcoin vehicle with an operating business attached, a structure that can outperform dramatically in a bull market, and underperform just as sharply when conditions reverse.

As Elkaleh put it, Strategy offers “amplified Bitcoin exposure along with the risks that come with leverage and dilution.”

Magazine: Scottie Pippen says Michael Saylor warned him about Satoshi chatter

From Jan. 1, 2026, crypto users in 48 jurisdictions, including the United Kingdom and the European Union, will start to feel the first real effects of the Organization for Economic Co-operation and Development’s (OECD’s) Crypto-Asset Reporting Framework (CARF) as early‑moving jurisdictions begin collecting standardized data from exchanges and platforms.

CARF requires in-scope providers to gather more detailed customer information, verify tax residency, and report users’ balances and transactions annually to their domestic tax authorities, which will then share that data across borders under existing information‑exchange agreements.

Lucy Frew, partner and head of the global Regulatory & Risk Advisory Group at international law firm Walkers, told Cointelegraph that CARF is a “game-changer,” and “set to reshape compliance for digital asset businesses and customers.”

However, in practice, she said it means tougher onboarding questions, more frequent account reviews, and far less room for users to assume that activity on overseas or offshore platforms is out of sight for tax agencies.

She added that firms that act now will be best positioned to manage risk and maintain trust, while those that delay could “face regulatory and reputational consequences.”

Structural changes for crypto exchanges

For exchanges, this is not a cosmetic compliance update but a structural change. Firms will need to bolt CARF requirements onto existing Know Your Customer and Anti-Money Laundering processes, redesign onboarding flows to capture tax‑residency and self‑certification data, and build or upgrade reporting systems.

That will likely require new governance frameworks, staff training, and closer coordination between compliance, engineering, and support teams, particularly for platforms that operate across multiple CARF and non‑CARF jurisdictions.

CARF steps. Source: OECD

UK‑licensed exchanges such as CoinJar sit at the center of this shift. Asher Tan, CEO and co-founder, told Cointelegraph that as CARF rules are phased in, users will be asked to provide additional tax residency information.

He said that the challenge is implementing new requirements in a way that “meets regulatory expectations while preserving the clarity, trust, and user-friendly experience people expect.”

He added that for regulated platforms, that balance can become a “competitive advantage” as crypto “moves further into the mainstream financial system and as those looking to trade digital assets look for compliant platforms.”

Retail users face a rise in audits

Retail users, meanwhile, face a sharp rise in audit risk rather than new taxes. As UK‑based practitioner, The Bitcoin & Crypto Accountant, told Cointelegraph, CARF does not create new tax liabilities; instead, it makes existing rules enforceable.

He said that, from 2026, the UK’s tax authority, His Majesty’s Revenue and Customs, will receive standardized, machine-readable data directly from exchanges, including overseas platforms, which makes “mismatches between tax returns and exchange data far easier to identify.”

The most common issues he sees among users are not just deliberate avoidance but omissions, such as “offshore exchange activity, frequent small disposals assumed to be immaterial, and Decentralized Finance or non-fungible token transactions that were misreported or not reported at all,” and he urged UK users to take action now:

“While reporting begins in 2026, the data will inevitably be used to question historic positions where figures do not reconcile. Anyone with unresolved issues should be addressing them now, while voluntary disclosure is still available.”

Key takeaways

The UK plans to bring cryptocurrency within the financial services perimeter by October 2027, shifting toward a structured regulatory regime.

The Financial Conduct Authority has launched consultations to define standards and requirements for crypto firms, with final rules expected in 2026.

The new framework marks a move away from basic Anti-Money Laundering registration toward a detailed licensing system that mirrors traditional financial products.

Separately, the government has launched an independent review into foreign financial interference, which could lead to future restrictions on the use of cryptocurrency for UK political donations.

The United Kingdom is moving away from a “wait-and-see” approach toward a formal rulebook that closely resembles the framework used by high-street banks. HM Treasury and the Financial Conduct Authority (FCA) have set October 2027 as the deadline for the country’s new crypto regime. This is not a minor update. It represents a structured integration of digital assets into the UK’s financial services perimeter.

This article discusses the UK’s shift toward a comprehensive crypto regulatory framework by 2027, including new legislation and evolving rules around political donations.

Evolution of the UK crypto regulatory framework

The UK has long taken a cautious stance on cryptocurrency. Until late 2025, most crypto activity in Britain was primarily governed by Anti-Money Laundering (AML) rules, financial promotions requirements and guidance from the FCA. This meant firms had to demonstrate robust AML controls to be added to the FCA’s register, but they were not subject to the full scope of the UK’s financial services rulebook.

This was not a full regulatory regime, as it did not address consumer protection, capital requirements or market oversight in the way banking or brokerage regulations do. There was also uncertainty around the treatment of trading platforms, staking, decentralized finance (DeFi) and other advanced crypto services.

The planned regulatory shift, due by 2027, marks a shift away from the previous patchwork approach. Instead of regulating crypto primarily through AML compliance, the UK intends to bring crypto activities within the core financial services perimeter, aligning them with the legal standards applied to traditional financial products.

Did you know? As of late 2025, more than 50 crypto firms were registered with the FCA for AML purposes, though many applications were reported to have fallen short of the regulator’s expectations on governance and risk controls.

The new UK crypto policy roadmap

In December 2025, the UK government took a landmark step by laying the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 before the UK Parliament. This statutory instrument establishes the legal foundation for bringing a wide range of crypto activities within the scope of regulated financial services in the UK.

Under the regulations, implementation will take place in stages, building toward full commencement in October 2027. The measures expand the list of activities regulated under the Financial Services and Markets Act 2000 (FSMA) to include:

Operating a crypto asset trading platform

Dealing in crypto assets as principal or agent

Arranging transactions and providing custody services

Certain aspects of lending, borrowing and staking.

This legislative framework does not yet implement the full set of rules. Instead, it empowers the FCA to develop detailed regulations and introduce them as the regime comes into force. According to the government, these measures are intended to foster responsible innovation, strengthen consumer protection and improve market transparency, while preventing bad actors from exploiting regulatory gaps.

“By giving firms clear rules of the road, we are providing the certainty they need to invest, innovate and create high skilled jobs here in the UK,” said Rachel Reeves, adding that the goal is to protect millions of consumers while maintaining high standards across the market.

Importantly, these regulations were laid before parliament but were not yet in force as of December 2025. They form the core legal architecture that the FCA will use to develop conduct standards and obligations for industry participants.

The FCA’s new standards

With the regulatory framework in place, the FCA has launched a series of consultations to translate broad legal authority into practical, enforceable rules.

On Dec. 16, 2025, the regulator published three consultation papers outlining proposed regulatory approaches for crypto activities. These documents do not represent final rules. Stakeholder responses are due by Feb. 12, 2026, with final rules expected later in 2026, ahead of implementation in 2027.

The consultations include:

CP25/40: Sets out operational requirements for trading platforms and brokers, introducing mandatory controls around staking and DeFi to support market integrity.

CP25/41: Requires token issuers to provide greater transparency about their projects and introduces a new Market Abuse Regime (MARC) aimed at addressing insider trading and price manipulation.

CP25/42: Establishes prudential requirements by mandating that firms hold sufficient capital and liquidity to protect users and maintain system stability in the event of business failure.

These proposals aim to place crypto firms on a regulatory footing similar to that of traditional financial institutions, including governance standards, prudent operational risk controls, consumer duty obligations and market integrity requirements. The outcome of these consultations will determine the precise rulebook the industry must comply with once the regime takes effect.

New restrictions on UK political crypto donations

Separately from financial services regulation, UK lawmakers have turned their attention to the treatment of cryptocurrency in political finance. As of December 2025, crypto donations are not explicitly banned under UK political finance law. Guidance from the UK’s Electoral Commission treats crypto donations in the same way as other forms of donations, provided sufficient information is available to verify donor permissibility and value.

In December 2025, the UK government initiated a review into foreign financial interference, examining potential safeguards in political finance laws, including the use of cryptocurrency donations. The review may inform future policy recommendations and is expected to report by March 2026.

Concerns about the traceability of cryptocurrency donations have been raised by ministers and commentators, particularly where pseudonymous wallets may obscure the origin of funds. According to media reports citing government officials, future election reform legislation could include proposals to restrict political crypto donations, though any changes would require new primary legislation.

Stablecoins have shifted from speculative assets to essential infrastructure in emerging markets, and adoption in developed regions has surged. Yet the market remains divided. Some expect stablecoins to dominate through decentralized protocols, while others foresee tokenized deposits as the main growth driver.

​This raises critical questions about the future of money. Will stablecoins revolutionize payments globally, or will traditional banking adapt in ways that blur the lines?

And critically, will stablecoins destabilize markets?

We asked 20 crypto executives about their stablecoin predictions for 2026. Covering market adoption, regulatory dynamics, technological advancements and emergent business models, here’s a panoramic view of where stablecoins stand as we enter the new year.

Stablecoins become core financial infrastructure

Stablecoins’ 24/7 hybrid design supports real-time settlement, reduced transaction costs and greater accessibility.

We spoke to the co-founder and chief product officer of Neura, Tyler Sloan, about stablecoins’ definitive moment. Sloan believes that stablecoins have reached a key inflection point.

“In 2026, we will see stablecoins shift from ‘crypto primitives’ to core settlement infrastructure across DeFi and the broader financial system,” Sloan said. “This will bring faster rails so that transfers can settle instantly, gas gets abstracted away, and compliance is embedded directly into the stack.”

Maja Vujinovic, co-founder and CEO of digital assets at FG Nexus, feels that invisibility is the next step for stablecoins and forecasts that they will become the “basic plumbing” that moves money across the internet.

Mark Aruliah, head of EMEA policy and regulatory affairs at Elliptic, feels the same. He predicts 2026 will be the year that stablecoins will become embedded in global finance.

Regulatory green lights will spur a stablecoin boom

Regulation has built a strong foundation for growth and competition in 2026.

Stablecoins are poised to move beyond being a “crypto product,” according to Adrian Wall, managing director of the Digital Sovereignty Alliance. Once innovators know the rules of the road, they’ll build faster, safer and more compliant products that expand what stablecoins can do.

“By 2026, regulated dollar-backed stablecoins will be built directly into mainstream payment systems. They’ll be used by banks, fintechs and retailers alike,” Wall said.

Growing momentum is a key theme, as Maghnus Mareneck, co-CEO of Cosmos Labs, explained:

“We’ll see a boom in new stablecoin issuers, from tech firms to telecom companies, all creating digital tokens backed by fiat or real-world assets under oversight. Paradoxically, regulation will fuel growth here, instead of hindering it.”

Stephan Dalal, chief legal officer of Open World, predicts that stablecoins will settle 10%-15% or more of cross-border transaction volume and power merchant payment rails.

In Asia, Tianwei Liu, co-founder of StraitsX, said that in 2026, stablecoins should begin to co-exist with traditional banking infrastructure rather than compete with it.

Stablecoin regulation drives market splits and risks

Stablecoin regulation does, however, drive market splits and risks. Fragmented regulatory approaches create operational challenges for traders and institutions, heighten compliance costs and increase systemic risk.

Boris Bohrer-Bilowitzki, CEO of Concordium, told Cointelegraph, “The main bottlenecks for the growth of stablecoins are users’ lack of trust and concerns about safety. 2026 is the year when hype gets separated from real-world utility.”

Bilowitzki continued:

“The ones that’ll survive are the serious infrastructure builders who prioritize security, privacy-preserving identity and actual utility for consumers.”

Market bifurcation also poses a risk. Eli Cohen, chief legal officer of Centrifuge and chief compliance officer of Anemoy, warns that this separation could expose retail users to significant losses from poorly understood yield mechanisms. Macroeconomic shifts, particularly dollar weakness, may drive users toward alternative pegs like gold-backed stablecoins.

The next year could potentially bring true velocity to the stablecoin adoption trend. Lindsey Argalas, CEO of Taxbit, believes that institutions need to be ready:

“The momentum is real. We are moving from experimentation to scaled adoption, and the institutions that invest early in compliance, clarity and operational readiness will be the ones that lead globally.”

Institutional treasury adoption gains momentum in 2026

OKX president Hong Fang told Cointelegraph that in 2026, stablecoins will begin appearing in contexts traditionally far removed from cryptocurrency, including business payments, treasury flows, B2B settlement, payroll and day-to-day financial operations.

“Stablecoins fit naturally into how money should move,” Fang explained.

Stablecoins could be set to become the primary touchpoint most people have with crypto, making them the fastest-growing sector in this space, according to Rebecca Liao, co-founder and CEO of Saga.

Mercuryo’s co-founder and CEO, Petr Kozyakov, predicts:

“The year 2026 will see the sector increase penetration, globally, with broader merchant acceptance and deeper integration into digital wallets.”

This sentiment is shared by the vice president of onchain finance at Ava Labs, Morgan Krupetsky, who expects companies to increasingly use stablecoin service providers for transactions and to issue their own branded stablecoins.

While the total market capitalization of cryptocurrencies has at times exceeded $4 trillion this year, the market cap of stablecoins sits only just above $300 billion. This marks a big discrepancy between volatile and stable assets. This gap represents one of the most significant opportunities in digital finance as we head into 2026, according to Kevin Rusher, CEO of RAAC.

Tokenized deposits could disrupt stablecoin dominance

Stablecoins could have a strong competitor emerging: tokenized deposits.

Simon McLoughlin, CEO of Uphold, highlighted to Cointelegraph that tokenized deposits could disrupt stablecoin dominance by offering digital representations of traditional bank deposits directly on blockchains, while maintaining regulatory protections like deposit insurance.

As banks innovate with permissioned ledgers and programmable money features, tokenized deposits could become the preferred form of digital money for use cases requiring the security and stability of regulated banking, potentially challenging stablecoins’ current market lead. As McLoughlin said:

“If 2025 was the year of the stablecoin, 2026 will be the year of the tokenized deposit.”

Stablecoins will further enable inclusion in emerging markets

Countries in Africa, Asia and Latin America have seen substantial adoption of stablecoins for everyday transactions, remittances and wealth preservation. Daniel Ahmed, co-founder and chief operating officer of Fasset, believes that the Middle East’s deepening digital asset ecosystem, shaped by an influx of global hedge funds, asset managers and fintech operators, is being matched by regulators moving with unusual clarity and coordination.

“As digital asset adoption accelerates in emerging markets across the global south, stablecoins are evolving from speculative instruments into foundational infrastructure, powering inclusive, efficient and values-aligned financial systems.”

Stablecoins will evolve in onchain markets

Stablecoins will undergo major evolution in onchain markets next year. Rune Christensen of Sky (formerly MakerDAO) notes that with $230 billion in idle, non-yielding stablecoins, smart money won’t sit on the sidelines for long. Institutions will undoubtedly look to decentralized finance (DeFi) and to USDS as a transparent way to put those idle funds to work.

2026 will also usher in a structural shift in understanding, as Cian Breatnach, founder of Matariki Labs, foretells:

“‘Debt tokens’ can underpin real credit formation and liquidity depth.”

Finally, Benjamin, co-founder of Deploy Finance, summarized what’s set for stablecoins during 2026 with this bold prediction:

“Stablecoins are not just another asset; they’re the base layer the tokenized world has been waiting for.”

​Magazine: Big questions: Would Bitcoin survive a 10-year power outage?

Bitcoin (BTC) entered its final week of the year down 30% from its $126,000 all-time high reached on Oct. 6. Has BTC finally peaked, or is there a relief in the cards going into 2026?

Key takeaways:

A typical "Christmas bear trap" could precede a potential relief rally into 2026.

Cooling ETF outflows, less long-term holder sell pressure, and macro factors suggest an extended bull cycle is possible.

BTC’s symmetrical triangle projects a 22% rise to $107,000.

Bitcoin’s many bullish signals

Bitcoin’s 2.6% drop from a high of $90,000 reached on Monday could be a classic “Christmas bear trap,” according to analyst James Bull.

A bear trap is a false technical signal where price briefly breaks below a key support level, triggering sell-offs and stop-losses, only to quickly reverse upward, trapping bears (short sellers) in losses.

Bitcoin is setting a “Christmas bear trap, which will be reversed in January like in the last 4 years,” James Bull said in a Monday post on X.

Bitcoin new year price performance; 2022-2025. Source: James Bull

Looking at the most recent case, the BTC/USD pair dropped 8.5% between Dec. 26 and Dec. 31, 2024, before reversing with a 12.5% between Jan. 1 and Jan. 6, 2025. 

Fellow analyst The ₿itcoin Therapist said that with the 4-year cycle broken, Bitcoin could rise to a new all-time high in the first quarter of 2026, setting up the “greatest bear trap in history.” 

James Bull added that the invalidation of the 4-year cycle could signal the end of the old retail-driven boom-bust cycle amid a changing Bitcoin market structure characterised by growing institutional adoption via ETFs and corporate treasuries. This, coupled with macro factors such as rate cuts and liquidity, can propel BTC price to new highs in 2026.

Meanwhile, Citi Group analysts set a 12-month base case prediction for Bitcoin at $143,000, driven mainly by “revived ETF demand,” with the bull case target set at $189,000.

Regarding spot Bitcoin ETF flows, James Bull said the outflows have reduced significantly from -1,600 BTC on Nov. 21 and are now “going toward zero.” The chart below shows that a similar scenario in April preceded a 33% price rally to $112,000 on May 22. Bull added:

“This isn't a guarantee for Bitcoin to go back to ATHs, but it's a strong signal.”

Spot Bitcoin ETF net flows. Source: Glassnode

As Cointelegraph reported, Bitcoin selling pressure from long-time holders is showing signs of cooling off, reinforcing the potential for a January 2025 relief rally.

BTC price symmetrical triangle targets $107,000

Data from TradingView shows the BTC/USD pair consolidating within a symmetrical triangle on the daily candle chart, as shown below.

The price needs to close above the upper trendline of the triangle at $90,000 to continue the upward trajectory, with a measured target of $107,400. 

Such a move would bring the total gains to 22% from the current level.

BTC/USD daily chart. Source: Cointelegraph/TradingView

“Bitcoin forming a symmetrical triangle pattern,” said analyst Dami-Defi in a recent analysis in X, adding:

“If Bitcoin pushes above that upper trendline and holds above, we're likely looking at a bullish breakout to those higher resistance levels around $94K and then up near $106K.”

As Cointelegraph reported, a bullish daily close above $90,000 would spark a new rally toward six figures.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.