EM Insight

ETF BITCOIN & ETHEREUM PULL IN MORE THAN $2.6B IN A SINGLE WEEK
Institutional money is returning to crypto very quickly.
Spot Bitcoin ETFs in the US attracted net inflows of about $1.9B over the past week, the strongest since October 2025. In particular, BlackRock’s IBIT accounted for more than $1B of inflows in the last 4 sessions.
Ethereum is also not left out. ETH ETFs drew in an additional roughly $697M, which is the strongest inflow week since October 2025.
The notable point is that just one week earlier, total BTC + ETH ETF flows were still seeing net outflows of nearly $400M. In other words, capital inflows flipped direction by almost $3B within a week.
BTC is up more than 22%, while ETH is up more than 28%.

🔴BOUNCEBIT KHAI TỬ LAYER-1 AFTER THE $3 MILLION HACK

BounceBit decided to completely shut down the BounceBit Chain after the hacker exploited a protocol vulnerability and withdrew approximately 286.5 million $BB worth over $3M.

Instead of patching the issue and restarting the network, the project chose to simply abandon Layer-1. One contributing reason is that Evmos — the underlying technology platform behind the chain — has stopped development, making the costs to maintain and re-audit the system too high.

All $BB will be migrated to the BEP-20 standard on BNB Chain. The snapshot was taken before the exploit occurred, meaning the tokens that were stolen will be excluded from the migration process.

Notably, BounceBit was once the first project to be listed on Binance’s Megadrop. In the end, a Layer-1 that was expected to build its own ecosystem ends up returning to operating as a token on BNB Chain.

AUGUST RECAP

August had no shortage of stories. But the flow of funds is starting to show a pretty clear order of priorities.

- PUMP is still leading. Onchain is heating up as FOMO continues to pull in hundreds of thousands of new users to the ecosystem every month. As long as the onboarding pace can be maintained, there’s still no reason for the momentum to fade.
- ENA is right behind. DAT just ran nearly 3x, while mNAV is starting to catch up in valuation. With the current positioning, the likelihood of a major announcement in the near term is quite noteworthy.
- ZEC has surpassed its ATH: the top-performing major coin in the group, and it has now broken out from a long-lasting HTF accumulation zone. The privacy trade is clearly still paying off—there are still people willing to fund it. ZRO is preparing for the next phase: launching a chain focused on capital markets, targeting around 2M TPS, with institutional adoption as the key focus. The story here is no longer just about interoperability.
- LIT + HYPE remain the two strongest names benefiting when crypto volume returns. HYPE is at its ATH, while LIT has bounced extremely strongly from the bottom. If capital keeps flowing back into the market, this is still the group with relatively “clean” beta compared to the rest.

Next, we’ll break down each category rotation to see where the money is leaving and where it’s preparing to focus.
GM.

🔴 MANTRA REPEATS A TROUBLE – MAINNET HALTED AFTER A SECURITY INCIDENT
MANTRA Chain had to stop the entire mainnet after detecting an issue related to a vulnerability in the EVM module. The network is still frozen at block 17,449,398, causing all activities involving transactions, bridges, IBC relays, as well as related deposits/withdrawals to be interrupted.
The MANTRA team said they have identified the root cause, completed the v8.4.0 patch, and are coordinating with validators to prepare for restarting the network. The project affirmed that users’ funds, exchanges, and third-party partners are not directly affected.
The incident comes at a time when MANTRA still hasn’t fully escaped the aftermath of the historical crash at $OM in April 2025, when the token lost more than 90% of its value in a short period, sparking major controversy over the token supply structure and the team’s operations. After that, the project had to restructure and swap the token to MANTRA.
MANTRA’s price continues to face pressure after the chain-stop news, dropping more than 9% immediately following the incident. A project once promoted as an RWA blockchain for organizations now has to deal with a more basic problem again: restoring trust after a token crash, and then facing another situation where the mainnet must be halted.

ETF cash flow sees the largest net inflow day of 2026

Spot Bitcoin ETF in the U.S. +$517M right after the U.S. Treasury announced an increase in the size of bond purchases—this is the largest day’s inflow in 100 days.
Spot Ethereum ETF +$189M, the strongest since last October

Total net assets of the U.S. Bitcoin ETF group are $84.31B. $517M is only 0.61% of the total across all U.S. Bitcoin ETFs, and about ~0.04% of BTC market cap. Still not enough to say the bull run has returned.

Where is the money flowing into which ETF?
- IBIT alone accounts for $284.7M, or 55% of inflows into BTC ETFs.
- For ETH, three ETH funds—ETHA, FETH, and Grayscale Mini—accounted for up to 92% of inflows; 4 out of 11 funds recorded zero inflow. Clearly, the capital is not being easily “distributed” at this time.

The main driver of this price surge doesn’t come from ETF buying pressure; instead, the upward momentum has pulled FOMO into the ETFs. Evidence: the creation orders were recorded after the session, with T+1 settlement, while $2.7B in short positions were liquidated.

On the 30-day chart, Bitcoin ETF cash flow is positive at about ~$663M, reversing from the prior month’s $2.40B net outflows. August ETH attracted $534.2M, the strongest of this year.

Cash flow only truly returns when the price is red or flat but inflows keep rising steadily. Either way, QE (or disguised QE) is always the strongest driver for risky assets.

🔴Arthur Hayes has just announced a comeback to directly become CEO of Flop Labs — a project building Flop Network for the AI Agent economy. $FLOP is being promoted with a familiar combo: no presale, no VC, fair launch, and a big expected airdrop in Q4/2026.

🔴The Black man previously called $HYPE, $NEAR , and $ZEC the Holy Trinity, set a target for HYPE at $150, and even said HYPE has the potential to rise 126 times. By early June, Hayes dumped all of HYPE, NEAR, and ZEC in turn. With $WLD, the turnaround was even faster: he announced that he would continue to hold, and less than 24 hours later he sold everything; afterward, WLD then plunged by more than 20%.

🔴Trades from wallets associated with Hayes even show a rather grim outcome: 15 winning trades, 25 losing trades, with total recorded PnL of -$2.47M. ENA is the only name that brought net profit, while SYN, LDO, ETHFI, PEPE, PENDLE, and ETH all ended in losses.

FORMER BNB CHAIN EMPLOYEE ACCUSED OF STEALING $628,000 FROM A MEMECOIN
A wallet that was once used by BNB Chain in a tutorial video for token issuance has become a tool for creating and dumping the memecoin ASTEROID.
BNB Chain said a former employee illegally kept the seed phrase after leaving the company, thereby regaining control of the wallet and deploying a new token. The project stated that it does not create, promote, or guarantee ASTEROID, and it is coordinating with relevant authorities while taking legal measures.
According to Lookonchain, four new wallets spent about $10,000 to buy 79.67% of the total supply, then sold most of the tokens and recovered 1,103 BNB, equivalent to $638,000. Estimated profit was $628,000. The connection between these wallets and the former employee remains an accusation based on on-chain analysis.
The case is not just a memecoin speculation scheme. It exposes a weakness in internal key management governance: while the blockchain can be transparent, real power still rests with whoever holds the seed phrase.
In the era of token issuance that takes only a few minutes, personnel control and access keys have become the defense line of an entire ecosystem. $BNB

367 MILLION USD STABLECOIN SLIDES OUT OF SOUTH KOREA: MONEY FLOWS ARE CHOOSING USD
In June, South Korea’s largest crypto exchange recorded 2,762.5 billion won of stablecoins moving overseas, while inflows returning to the market reached only 2,202.2 billion won. The net difference is about 367 million USD, marking the 18th consecutive month that stablecoins have left domestic exchanges.
These funds mainly head to derivatives, staking, DeFi, and tokenized real-world assets—products that are still limited in South Korea. Behind the crypto transactions is a clear currency shift: investors sell won, buy USD-pegged stablecoins, then move the capital onto global financial infrastructure.
Seoul wants to keep money flowing into won-pegged stablecoins. But the debate among the central bank, lawmakers, and technology firms continues to revolve around the right to issue digital money and control capital flows.
A new order is taking shape: the won still dominates the real economy, while the USD continues to expand its influence on the blockchain. $BTC

PROHIBITED CRYPTO MINING IN MOSCOW UNTIL THE END OF 2032

Russia is redrawing the crypto mining map within the limits of the national power grid.
Under Decree No. 936, cryptocurrency mining and participation in mining pools will be banned in the city of Moscow, the entire Moscow Oblast, and some areas of Kursk Oblast from 15/08/2026 through 31/12/2032.
The reason is electricity. Mining activity in the Moscow area is estimated to consume about 1 GW, while the total capacity of data centers could rise to 3.6 GW by 2032—equivalent to around 17% of the region’s power system peak load.
But this is not a nationwide crypto ban across all of Russia. Moscow still allows mining in suitable areas, requiring companies to register, control equipment, measure electricity consumption, and collect taxes. Crypto also paves the way for international payments as Russia’s financial system faces pressure from Western sanctions.
Russia is not eliminating mining. Russia is moving it away from areas with insufficient power, placing this industry in a geographic zone where the state can control energy, taxes, and cash flows.
$BTC

A COLDCARD INCIDENT COULD TOUCH $114 MILLION IN LOSSES

The first three waves of attacks reportedly wiped out about 1,367 BTC, worth $88.6 million, across 4,585 addresses. A suspected fourth wave could raise total losses to roughly 1,816 BTC, equivalent to nearly $114 million.
The source of the incident lies at the moment the wallet is created. A random-number generator integration bug caused some COLDCARD versions to use software data that could be predicted instead of hardware random number generation. The attacker can reconstruct the seed phrase, find the private key, and withdraw BTC without ever interacting with the device.
So, even a wallet stored inside a safe and never connected to the internet can still be drained. Cold storage only protects assets from network connections; it cannot save a private key that was already weak from the moment it was generated.
Coinkite has released a firmware fix for the affected models. However, software updates cannot repair the old seed. Users who fall into the risk category must create an entirely new seed on the secure firmware and then move their assets to a new address.
The incident is reversing one of Bitcoin’s biggest beliefs. After FTX, users withdrew from exchanges because they didn’t trust custodians. After COLDCARD, they have to face the risks of their own self-custody infrastructure.
Bitcoin’s new era won’t be only about owning private keys. It will be about the ability to verify how those keys are generated. $BTC

#baby $BABY BABYLON TBV: BRING FUNDS OUT OF BITCOIN, WITHOUT MOVING BTC OUT OF BITCOIN
@BabylonLabs_io is expanding the role of $BABY through Trustless Bitcoin Vaults—an infrastructure that allows native BTC to become collateral in DeFi. #baby
With TBV, BTC is locked in a vault on the Bitcoin network instead of being sent through a bridge, wrapped token, or a custodian. The collateral status is verified with cryptography and synchronized with the application on Ethereum.
On the public testnet, users can deposit BTC into the vault, enable collateral on Aave v4, borrow stablecoins, repay the loan, and then receive their BTC back to the configured Bitcoin address.
The key point lies in the structure of ownership: liquidity is introduced into DeFi, but the BTC still remains on Bitcoin. Babylon is building an infrastructure layer to transform Bitcoin from a passive store of value into collateral infrastructure for the on-chain credit market.

CLARITY ACT STEPS INTO THE DEATH WEEK AT THE U.S. HOSPITAL

The legislative window is closing. The CLARITY Act must be pushed through before the August recess, but it still requires at least 8 votes from the Democratic side to clear the Senate. This is a race against time, but deeper down it’s a power-brokering showdown among Washington, Wall Street, and the crypto industry.
The bill will set the boundaries for digital asset regulation, tighten anti–money laundering obligations, define DeFi, tokenization, and limit the SEC’s authority to intervene in certain token issuance activities. If passed, U.S. crypto will move from a management-by-lawsuit era to regulation under specific rules of the game.
The hottest flashpoint is stablecoins. Banks worry that stablecoin rewards will siphon deposits away from the traditional system, while crypto firms see limiting yields as protecting a banking monopoly. The dispute really boils down to who gets to control the USD distribution pipeline in the digital era.
The crypto industry has spent about $189 million on the 2026 midterm elections. Fairshake alone has raised more than $136 million. Crypto is no longer outside U.S. politics: the industry is using money, votes, and influence to directly participate in writing the law.
The CLARITY Act may be delayed. But the old order has cracked. The next battle is no longer about whether America accepts crypto, but about who will control the digital financial infrastructure of the USD. $BTC

🔴Token unlock statistics for August 2026

- 101 unlock events occurred over 28 days. The total value listed is approximately $1.133 billion.
- 5 major unlock events reached $867.2 million, accounting for 76.5% of the total value.
- The 10 largest events reached $945.2 million, accounting for 83.4%.
- There are 80 events under $5 million, but together they total only about $111.9 million, equivalent to 9.9%.

🔴Tether reports a $1.5B profit in Q2, but warning signs are starting to emerge

Tether’s total performance for the first half of 2026 is negative at -$3.17B. After subtracting Q1’s positive $1.04B, Q2 alone is about -$4.2B.

That difference comes from how Tether has been reporting results in previous periods using “net profit.” This quarter they switched to “net operating profit”—counting only gains from T-bills and repos, excluding all mark-to-market gains/losses. It’s just accounting technique.

What gets excluded is exactly what has been wiping out half of their buffer: gold down 15%, BTC down from $68,200 to $58,600. In the quarter, Tether bought an additional 14 tons of gold and 1,796 BTC, but the value of both portfolios still fell. Combined losses in markdown are about ~$3.73B. The buffer drops from $8.23B to $4.11B within just 90 days, and the remaining ~$0.5B discrepancy is not explained.

But here’s the number that really matters: that $4.11B buffer is supporting $24.6B in volatile assets. A 6:1 ratio. With gold and BTC down a further 17% versus the 30/06 reference point, the buffer is now effectively 0—USDT is still backed 1:1, but there is no spare margin left.

The buffer is just 2.24% of total liabilities. The KPMG audit began in March; five months after Q2, BDO attestation is still ongoing—no completion date yet.

Tether has no liquidity problem. The issue is that they’re using a very thin layer of capital to absorb the price risk of a portfolio whose size is 6 times larger—profits are very large when gold and BTC rise, and they move completely symmetrically when the market turns. $BTC

NEW YORK SUES KALSHI, SEEKING UP TO $36 BILLION
New York has sued Kalshi, accusing it of operating an unlicensed gambling business under the name “prediction market.” The state is asking for the platform to be banned in the state, refunds to users, seizure of profits, and civil penalties.
New York estimates the total financial obligations could reach $36 billion, including a fine three times the amount of revenue allegedly obtained unlawfully and related penalties. This is the figure requested by the plaintiff only; it is not yet the amount Kalshi has been ordered to pay by the court.
The dispute centers on regulatory authority. Kalshi argues that prediction contracts are derivatives under the federal jurisdiction of the CFTC. New York says putting money on sports results, elections, or cultural events is gambling and must comply with the laws of each state.
If New York wins, the prediction market’s nationwide expansion model will be hit at its foundation. Kalshi may have to obtain licenses, pay taxes, and accept separate limits in each state.
This is a battle over whether a new market will be regulated like finance—or dragged back into the legal order of the gambling industry.

Zcash activates Ironwood after a vulnerability that could create unlimited $ZEC fake

Zcash has just activated Ironwood (NU6.3) to replace Orchard after a serious vulnerability was found in a zk-SNARK circuit that could allow unlimited creation of fake ZEC tokens without the blockchain detecting it. There is currently no evidence that the bug has been exploited.
The issue lies in the privacy mechanism itself: Zcash cannot absolutely prove that fake ZEC was never created before the flaw was patched.
Ironwood addresses this by closing the flow of new funds into Orchard and using the Turnstile mechanism, which prevents withdrawals of ZEC from exceeding the amount that was originally deposited. If fake ZEC ever existed, they would be locked back in the old pool.
For a privacy coin, this is the core problem: privacy is only valuable as long as the market still believes that the 21 million ZEC cap is real.

Pavel Durov Is Prosecuted by Russia: Telegram Stuck Between Two Power Systems
Russia has officially indicted Telegram founder Pavel Durov on charges of supporting terrorist activities, and has also placed him on an international wanted list. The FSB alleges that Telegram has failed to remove channels, groups, and bots used by Ukrainian intelligence and extremist organizations to prepare sabotage and attacks within Russian territory.
Notably, this is no longer a separate standoff between Durov and Moscow. In France, he is still under investigation regarding Telegram’s responsibility for illegal activities on the platform, and he was also questioned in Paris in early July 2026.
Two states. Two legal systems. Yet both converge on the same question: how much responsibility must a platform with more than 1 billion users bear for what happens within it?
Telegram once built its power by positioning itself between governments, providing a communications space that the state could not fully control. That very advantage has now become a point of friction. As Telegram became infrastructure for politics, war, crypto, and cross-border information flows, Durov is no longer simply running a messaging app.
He is managing digital power infrastructure. And in 2026, countries are starting to seek to regain control over that infrastructure. $TON

Over $1B stolen: Crypto is entering a new era of hacking

In the first half of 2026, the number of exploit incidents verified by Blockaid has surpassed the entire year of 2025. In particular, QuillAudits estimates that DeFi lost about $935.3M across 87 attacks, with 82.7% of the losses related to private keys and bridges.
What’s alarming is the way hackers are evolving. Drift Protocol lost about $285M after a multi-week social engineering campaign to gain control of governance keys. KelpDAO lost about $292M when a LayerZero DVN was compromised, causing the system to verify a fake cross-chain message as a legitimate transaction.
Smart contracts are being audited more thoroughly, but signing rights, multisig, bridges, RPC, and operational infrastructure have become new centers of power. Even a protocol with safe code can lose hundreds of millions of dollars if the attacker obtains valid credentials or the external validation layer outside the contract. Blockaid says most of the recent value lost comes from wallet infrastructure and private keys, rather than purely code flaws.
As crypto matures, onchain assets grow larger and systems become more tightly connected. The attack surface expands accordingly—from code to people, infrastructure, and governance permissions. 2026 is shaping an era where blockchain security becomes a problem of controlling power, not merely checking smart contracts.

🔥According to CryptoQuant, Bitcoin’s long-term holders (LTH) are accumulating at the fastest pace in the past 6 years, based on the Long-Term Holder Net Position Change (30D) metric.

Green (positive) indicates an accumulation phase, while red (negative) indicates a distribution/selling phase. Looking back at history, strong accumulation waves have previously appeared around mid-2021, early 2024, and late 2024, when BTC prices formed bottoms or consolidated ahead of the next bull move.

When LTH returns to accumulation after a major sell-off, it often reflects that long-term holders believe the current price zone is attractive enough to buy back, or simply that the old coins have “reached maturity” to be counted toward LTH after a movement cycle.

History shows that prolonged LTH accumulation phases often come before sustained price rallies, but the exact timing and magnitude still require additional accompanying on-chain data (such as MVRV and exchange netflow) to confirm. $BTC