Crypto World
Iran is using a $7.8 billion crypto shadow economy to bypass global sanctions
Fresh U.S. and Israeli strikes on Iran have drawn new attention to a financial network Tehran has built in parallel to its battered banking system: bitcoin mining and a fast-growing stablecoin economy.
Iran legalized crypto mining in 2019, allowing licensed operators to use subsidized electricity in exchange for selling mined BTC to the central bank. Bitcoin has served as a tool for paying for imports and settling trade outside the dollar system, even if indirectly.
Estimates in recent years have put Iran’s share of global bitcoin mining power between 2% and 5%, though much of the activity operates out of public view.
Blockchain analytics firm Chainalysis found that Iran’s crypto ecosystem reached $7.78 billion in 2025, growing faster than the year before. That figure is as large as the GDP of some smaller countries such as the Maldives, or Liechtenstein.
Activity often spiked around military clashes and domestic unrest, including last year’s 12-day conflict with Israel, according to Chainalysis.
The Islamic Revolutionary Guard Corps (IRGC), the primary branch of the country’s military, has since deepened its role in the space. Chainalysis estimates IRGC-linked addresses accounted for more than 50% of total Iranian crypto inflows in the fourth quarter of 2025, with over $3 billion in value received last year.
Those figures reflect only wallets publicly tied to sanctions listings, suggesting the true footprint may be larger.
Adoption mechanics
Stablecoins also play a key role.
Separate analysis by Elliptic found Iran’s central bank accumulated at least $507 million in USDT in 2025, likely to steady the rial and finance trade. That effort has mostly failed, with data showing that the rial has lost more than 96% of its value against the USD.
At the same time, ordinary Iranians have turned to bitcoin. During recent protests and an internet blackout, withdrawals from local exchanges to personal wallets rose sharply.
Read more: Iran’s rial collapse mirrors Lebanon’s crisis, driving citizens to bitcoin
If conflict disrupts power grids, mining output could dip in the short term. The Iranian state is believed to be mining BTC at around $1,300 per coin, which it then sells at current market prices. It’s unclear whether the state has maintained any bitcoin reserves, as there is no treasury dashboard and no official disclosure of holdings.
In practice, mining turns cheap domestic energy into an asset that can move across borders. A licensed miner mints new bitcoin and then sends them to the central bank of Iran. The bank can then transfer it to an overseas counterparty to pay for machinery, fuel or consumer goods without routing funds through U.S.-controlled banks.
While the transactions settle on a public blockchain, the counterparties can remain opaque.
The same pattern appears in stablecoins. USDT, which is pegged to the dollar, has become a standard settlement tool in sanctioned economies because it offers price stability and faster transfers than bitcoin.
However, it’s not always easy to hide such transactions. Crypto exchange Binance recently found itself embroiled in accusations that it fired investigators who raised concerns about funds moving through the exchange to sanctioned, Iran-linked entities. This led to nine U.S. Senate Democrats asking the Treasury and DOJ to probe Binance’s illicit finance controls.
Geopolitical risks
Chainalysis data shows that Iranian crypto activity correlates with political flashpoints, including missile exchanges and internal protests. During periods of unrest, exchange outflows rise as users pull funds into private wallets.
For the IRGC, crypto offers another channel to move value across its network of affiliates and commercial fronts. Chainalysis reported that inflows to IRGC-linked addresses totaled $2 billion in 2024 and exceeded $3 billion in 2025.
The renewed military campaign, which has seen the IRGC retaliate against U.S. bases in various countries in the Middle East, adds fresh risk to this system. Large mining operations require steady power. Iran has imposed seasonal bans in the past to ease strain on the grid.
A sustained conflict that damages infrastructure could reduce the hash rate or mining capacity tied to the country, though the global bitcoin network would likely adjust over time as miners elsewhere pick up the slack.
Ethereum price continues to trade in a sideways structure that reflects a gradual decline rather than stability. ETH has struggled to generate sustained upside momentum. The exit of new participants has weighed on sentiment, even as some long-term metrics show early signs of improvement.
This divergence creates a mixed outlook for Ethereum. While network growth has weakened, improving holder retention offers a counterbalance.
Ethereum New Holders Dip
Ethereum has seen a sharp decline in new addresses over the past several days. Daily new addresses fell nearly 36% within 48 hours, dropping from 298,000 to 191,000. This contraction pushed Ethereum’s Network Growth metric to a two-month low.
The slowdown has persisted since the beginning of the month. Fewer new participants reduce organic demand. Weak onboarding also signals hesitation among retail investors. This trend has added pressure to ETH price performance and contributed to cautious market sentiment.
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The Ethereum Holder Retention Rate provides deeper context that even though new holders are declining, the ones that are staying are staying for good. This metric tracks the percentage of addresses maintaining a balance across consecutive 30-day periods. It measures whether holders continue to retain ETH rather than exit positions.
The retention rate recently fell to 92.4%, marking a 4.5-year low and the weakest reading since September 2021. This decline confirmed wavering conviction among newer holders.
However, the metric has begun to improve modestly, suggesting renewed stability among participants. Rising retention can strengthen structural support if sustained.
ETH Price Shows Potential To Bounce Back
Ethereum is trading at $1,904 at the time of writing, holding above the $1,816 support level. While price action appears flat, a descending resistance line indicates a slow downtrend. Without stronger demand, ETH remains vulnerable to continued weakness.
The Chaikin Money Flow indicator offers cautious optimism. CMF has shifted into positive territory after a gradual uptrend. This movement signals improving capital inflows. Transitioning from outflows to inflows is essential for any sustained Ethereum price recovery.
If inflows continue and support holds, Ethereum could rebound from $1,816 and attempt a move toward $2,165. A breakout above this resistance would invalidate the current downtrend line. Such a shift would likely restore investor confidence and reinforce bullish momentum.
However, failure to maintain positive capital flow would undermine this outlook. A breakdown below $1,816 would invalidate the recovery thesis. In that scenario, Ethereum price could slide toward $1,600, increasing downside risk and reinforcing bearish control across the broader crypto market.
The post Ethereum Holder Retention Rebounds From a 4-Year Low appeared first on BeInCrypto.
Key takeaways:
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Institutional adoption of the Ethereum network accelerates despite Ether disappointing price action. Ethereum and its layer-2s hold 65% of TVL market share.
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Vitalik Buterin is shifting focus toward base layer scalability and ZK-EVM to ensure long-term onchain efficiency and security.
Ether (ETH) has declined 36% in 2026, sparking frustration as the $3,000 level feels increasingly out of reach. Despite a retreat toward $1,900, Ethereum fundamentals appear resilient. Development continues at a rapid pace, specifically targeting base layer scalability, privacy, and quantum resistance.
Critics claiming Ether is poorly positioned may be surprised if the market sentiment shifts back toward cryptocurrencies.
Ether has underperformed the broader crypto market by 9% during the first two months of 2026, challenging the theory that external factors are the sole drivers of this correction. Decentralized exchange (DEX) volumes on the Ethereum network fell 55% over the past six months, while competitor Solana saw a more modest 21% decline during that same timeframe.
Ethereum DEX volumes dropped to $56.5 billion in February 2026, down significantly from a peak of $128.5 billion in August 2025. During the same period, monthly Solana volumes reached $95.5 billion, down from $120.6 billion in August. This contraction in activity has weighed on network fees and decentralized application (DApp) revenue, effectively reducing the immediate incentives for holding Ether.
Institutions choose Ethereum over other blockchains
The narrow focus on volume ignores the fact that Ethereum maintains a 57% market share in total value locked (TVL), totaling $52.4 billion. When including layer-2 solutions such as Base, Arbitrum, Polygon, and Optimism, Ethereum’s dominance rises to 65%. For comparison, Solana’s TVL sits at $6.4 billion, while BNB Chain holds an aggregate $5.5 billion locked in smart contracts.
Major institutions, including JP Morgan Asset Management, Citi, Deutsche Bank, and BlackRock, have recently launched onchain projects using Ethereum. From tokenized funds to dedicated layer-2 rollups and bank-issued stablecoins, Ethereum remains the primary venue for decentralized finance (DeFi) innovation, commanding a 68% market share in Real World Assets (RWA).
Ethereum’s strategic decision to prioritize layer-2 scalability via rollups has been partially labeled a failure, as competing chains like Tron and Solana currently lead in network fees. Regardless of how critics judge the decision to subsidize rollup costs, no “Ethereum killer” has managed to match its monetary value. Even the highly successful Hyperliquid maintains a relatively modest $1.5 billion in TVL.
Vitalik Buterin, Ethereum’s co-founder and lead architect, recently expressed intentions to reduce dependence on rollups by targeting base layer scalability. According to Buterin, the proposed changes include parallel block verification, aligning gas costs with actual execution time, and the implementation of a zero-knowledge Ethereum Virtual Machine (ZK-EVM).
These updates will be implemented gradually. Buterin recommends that a minority of the network participate initially before moving toward mandatory block confirmation systems that rely on ZK-EVM. Additionally, Ethereum maintains a clear roadmap to navigate the quantum computing era, which includes consensus-layer signatures based on privacy-focused proof systems.
Related: Why institutions still prefer Ethereum despite faster blockchains
Buterin has admitted that quantum-resistant signatures are significantly larger and more difficult to verify, noting that lattice-based solutions are currently inefficient. Consequently, the proposed solution involves fixing protocol-layer recursive signature and proof aggregation while developing vectorized math precompiles to reduce gas costs. While the Ethereum network is not yet perfect, a viable path for scalability exists.
Before dismissing ETH as a failure, it is necessary to analyze what has made the network successful relative to competing DApp-focused blockchains. Decentralization and trust require years, if not decades, to establish. ETH maintains a significant first-mover advantage and appears well-positioned to capture a future surge in demand for institutional-grade onchain activity.
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.
Bitcoin fell to $63,062 before recovering to $66,201 following reports of large explosions in Tehran as the United States and Israel launched strikes across Iran.
Summary
- Bitcoin dropped to $63K on Iran strike news before rebounding above $66K.
- Crypto market lost $128B in panic selling as missiles hit Middle East.
- UAE intercepted missiles safely as BTC and ETH recovered from lows.
Ethereum (ETH) dropped to $1,837 before rebounding to $1,940. As per the data at the time of the attack, the crypto market erased approximately $128 billion in value in the immediate aftermath.
Iran launched retaliatory missiles at multiple locations including Israel, Qatar, the United Arab Emirates, and Bahrain.
They also threatened further strikes against U.S.-linked bases in Iraq.
The UAE Ministry of Defence successfully intercepted Iranian missiles without damage or injuries, though fragments fell across Abu Dhabi.
Bitcoin and Ethereum recover from intraday lows
Bitcoin (BTC) traded in a 24-hour range of $63,062 to $66,108 before settling at $66,201. The asset gained 1.12% over one hour and 1.28% over 24 hours. The intraday low of $63,062 is a 4.6% drop from the 24-hour high.
Ethereum’s 24-hour range spanned $1,837 to $1,946, with the current price at $1,940. The asset posted gains of 1.42% over one hour.
Both assets demonstrated quick recovery from initial panic selling as markets assessed the scope of the military action.
Bitcoin reclaimed the $66,000 level while Ethereum held above $1,900 after testing support below $1,850.
Regional missile exchanges cause risk-off sentiment
The strikes began Saturday with explosions reported in Tehran. U.S. President Donald Trump urged Iranians to overthrow the government once the military campaign concludes.
Hours after the initial strikes, Iran launched missiles targeting Israel, Qatar, UAE, and Bahrain.
The UAE Ministry of Defence intercepted the new wave of Iranian missiles launched toward the country.
Fragments of intercepted missiles fell across several parts of Abu Dhabi including Saadiyat Island, Khalifa City, Bani Yas, Mohammed bin Zayed City, and Al Falah. No injuries were reported.
The ministry affirmed readiness to deal with any threats and stated it is taking all necessary measures to counter anything aiming to undermine the country’s security and stability.
TLDR:
- Bitcoin dropped to $63K within minutes of the Iran War breaking out, triggering over $515M in crypto liquidations.
- Gold surged past $5,200 as the Iran War intensified, with Bank of America forecasting a $6,000 per ounce target.
- The Strait of Hormuz carries 20% of global oil daily, and tankers are already halting movement amid the Iran War.
- Recession probability jumped from 25–30% to 40–50% as the Iran War threatens sustained disruption to global oil supply.
The Iran War has triggered an immediate financial shockwave across every major asset class. Open military conflict between the U.S., Israel, and Iran erupted on February 28, following explosions across Tehran, southern Lebanon, and near U.S. military bases.
President Trump declared “major combat operations” under Operation Epic Fury. Iran responded with missile strikes on Israeli and U.S. Gulf bases.
Investors across every market are now reassessing their positions as the situation continues to evolve hour by hour.
Stock Markets Face a Historic Test as War Escalates
The Iran War arrived at an already fragile moment for equities. The S&P 500 had turned negative for 2026 before the first strike even landed.
Bank of America held the most bearish S&P 500 outlook heading into the conflict, with a year-end target of just 7,100.
Historical data, however, offers a counterpoint worth noting. CFA Institute data shows U.S. large-cap stocks returned 11.9% annualized during wartime versus 10.0% during peacetime periods.
Across six major conflicts, the pattern has remained consistent — markets sell off before the war begins, then recover shortly after it starts.
The critical difference this time is oil. None of those previous wars directly threatened a supply corridor handling 20% of global crude.
If the Strait of Hormuz faces prolonged disruption, the historical “buy the war” playbook may not hold. Recession probability has already shifted from roughly 25–30% to an estimated 40–50%.
Bitcoin and Gold Split as Investors Seek Safety
Bitcoin dropped to approximately $63,000 within minutes of the Iran War breaking out, falling 3.8% almost immediately.
Over $515 million in crypto liquidations followed, erasing roughly $128 billion from total market capitalization. Ethereum fell 5.5%, with $149 million in ETH futures liquidations recorded by CoinGlass.
Gold, by contrast, surged past $5,200 and settled near $5,296 in the same window. Silver climbed 7.85% alongside it.
Gold had already gained 13.31% in January alone, reflecting a months-long trend driven by central bank buying and growing de-dollarization momentum.
The divergence between the two assets tells a clear short-term story. Bitcoin is trading like a risk-on asset, absorbing panic selling during weekend hours when no other liquid market is open.
Gold is functioning as the traditional safe haven. Bank of America expects gold to reach $6,000 per ounce over the next 12 months, and every current macro condition supports that trajectory.
Oil Prices and Economic Fallout Determine What Comes Next
The Iran War’s economic consequences hinge almost entirely on what happens at the Strait of Hormuz. Roughly 20 million barrels of oil pass through it daily, covering Qatar’s LNG, UAE crude, and most of Kuwait and Iraq’s exports.
Tanker traffic has already slowed, with Japanese shipping firm Nippon Yusen directing its full fleet away from the strait.
Brent crude closed the prior Friday at $72.48, while WTI jumped to $75.33, up 12% in a single session. Lombard Odier estimates a temporary spike to $100 per barrel is plausible under current conditions.
A sustained 20–30% oil price increase could depress global growth by 0.5–1.0% and push headline inflation higher by a similar margin.
The chain reaction from there runs through the entire economy. Higher oil raises costs across transportation, manufacturing, and consumer goods. Spending contracts, confidence falls, and growth slows.
The Federal Reserve, already stuck with rates at 3.5%–3.75% and inflation near 3%, has little room to respond. If Brent remains below $90, markets may stabilize. Above $100 sustained, the road through 2026 becomes considerably rougher.
Bitcoin’s future in an artificial intelligence-driven world may depend less on code and more on central banks.
In a new note, Greg Cipolaro, global head of research at financial services and infrastructure firm NYDIG, argued that artificial intelligence will affect bitcoin mainly through macroeconomic channels and its impact on the labor market.
The key variables are growth, employment, real interest rates and liquidity. Bitcoin, he writes, sits downstream of those forces.
If automation cuts jobs and wages, consumer demand could weaken and, in a severe case, falling incomes would strain debt payments and pressure asset prices.
Those fears appear to be well-grounded. Just this week, Jack Dorsey’s fintech firm Block unveiled its shrinking back toward its pre-pandemic size, cutting staff by about 40%. Dorsey cited AI-enabled efficiency for the job cuts, something that was theorized in Citrini’s research on the AI-doom that spooked the market this week.
In such a scenario, policymakers might respond with lower rates or fiscal spending to stabilize the economy. That wave of liquidity could support bitcoin, which has often tracked shifts in global money supply.
A different outcome would look less friendly for the cryptocurrency. If AI boosts productivity and economic growth without major job losses, real yields could rise, and central banks might keep policy tight.
Higher real rates have historically weighed on bitcoin by raising the opportunity cost of holding it and making risk assets less attractive.
Shift in demand
Anxiety around AI echoes past moments of upheaval in Human society.
The steam engine displaced manual labor in factories and on farms. Electrification then rewired entire industries. Later, computers and the internet automated clerical work and reshaped retail, media and finance.
Each wave triggered fears of permanent job loss. In the early 1900s, factory mechanization sparked labor unrest as machines replaced skilled craftsmen. In the 1980s and 1990s, personal computers cut typist pools and back-office staff. More recently, e-commerce helped hollow out brick-and-mortar retail roles.
Yet aggregate demand did not collapse. Productivity rose. New industries absorbed displaced workers, even if the transition proved uneven and painful. Nowadays, we have industries that were unthinkable before the dawn of the internet. Think cloud computing.
Cipolaro argued AI may follow a similar pattern. As a general-purpose technology, it requires firms to redesign workflows and invest in complementary tools. Over time, that process tends to expand productive capacity rather than shrink it.
“The implication is not that disruption will be painless, but that the equilibrium response to new technology has historically been integration, not obsolescence,” Cipolaro wrote. “Society’s response to AI will likely follow the same pattern.”
For bitcoin, that distinction matters. If AI ultimately lifts long-term growth, the structural backdrop could differ from the short-term shocks that often drive liquidity injections.
Meanwhile, adoption may also rise thanks to agentic payments, which would essentially see software pay other pieces of software without human involvement. One of Bitcoin’s earliest visions centered on machine-to-machine payments, and AI may be the necessary tool to make them a reality.
Still, incentives aren’t currently there for a widespread rollout. Credit cards bundle rewards and short-term credit, features that stablecoins do not yet match, Cipolaro noted.
Ultimately, while the rise of AI brings new challenges, what matters is the human response to the disruption it brings. If AI triggers a deflationary shock and forces the money printer to turn back on, or if it fuels a productivity boom that raises real yields, bitcoin will reflect that.
A tip to Homeland Security unraveled a multi-wallet laundering scheme, which ultimately resulted in a $61 million Tether confiscation.
US federal agents have seized more than $61 million worth of USDT. Investigators traced the seized funds to cryptocurrency addresses allegedly linked to the laundering of criminal proceeds obtained through “pig butchering” schemes.
According to the official press release, the funds were connected to scams in which victims were recruited and manipulated into transferring money under false pretenses.
Romance, Fake Profits, and $61M in USDT
Court filings state that criminal actors targeted victims by establishing trust and often posed as romantic partners. After gaining victims’ confidence, the scammers claimed to have specialized knowledge or techniques that could generate massive profits through cryptocurrency trading.
Victims were directed to fraudulent cryptocurrency trading platforms that closely resembled legitimate platforms in name and appearance. These fake platforms displayed fabricated investment portfolios and showed unusually high returns in order to encourage victims to invest increasing amounts of money.
When victims attempted to withdraw their funds, they were unable to do so and were frequently told they needed to pay additional “taxes” or “fees” to release their assets. According to authorities, these tactics were used to extract more money from victims.
Once funds were transferred to cryptocurrency wallets controlled by the scammers, the money was rapidly moved through multiple wallets to conceal its source, ownership, and control. In this case, Homeland Security Investigations (HSI) agents and analysts in Raleigh received a complaint through the HSI Tip Line and traced the victim’s funds through several cryptocurrency wallets involved in the alleged fraud and money laundering scheme.
Authorities also revealed that some of those wallets still held significant amounts of victims’ funds, making them subject to seizure and forfeiture.
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Crackdowns
Tether has been involved in several financial crime investigations in coordination with international law enforcement agencies. The stablecoin issuer has assisted efforts to track, freeze, and support the seizure of illicit funds. On July 22, 2025, the US Department of Justice announced a civil forfeiture action against Buy Cash Money and Money Transfer Company that involved freezing and reissuing $1.6 million in USDT allegedly tied to Gaza-based terror financing.
In June 2025, Brazilian authorities recognized Tether’s assistance in blocking approximately $6.2 million, connected to a cross-border money-laundering scheme conducted through Klever Wallet. Also in June 2025, the Department of Justice and OKX enabled a civil forfeiture complaint seeking to seize roughly $225 million in USDT allegedly linked to pig butchering investment scams. In March 2025, the United States Secret Service froze $23 million in funds associated with transactions on the Russian-sanctioned exchange Garantex.
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BTC has completely turned the tables around during this highly volatile day.
The intense volatility in the cryptocurrency markets continues as bitcoin just shot up to $67,000 after plunging to $63,000 this morning.
The most likely reason for all the Saturday fluctuations is the quickly escalating situation in the Middle East, and the latest reports hinting at a regime change in Iran.
It all started this morning when Israel and the USA carried out several attacks against Iran. The Middle East country retaliated against several nations in the region, including the UAE, Bahrain, Qatar, and Saudi Arabia.
In the following hours, more reports began to unravel, and the latest big development on the matter indicated that Iran’s supreme leader had been killed. So far, though, the information is coming only from Israeli sources and there’s no official confirmation.
US President Donald Trump also addressed the situation recently, warning that he could end it all in a matter of days and warned of further military actions if Iran doesn’t scale back on its nuclear development.
BREAKING: President Trump is floating several “off ramps” for Iran just hours after the strikes launched by Israel and the US, per Axios.
Trump says:
1. He can end the situation in “two or three days”
2. This would involve threatening Iran with further military action if they… https://t.co/xQf5c7nmjb
— The Kobeissi Letter (@KobeissiLetter) February 28, 2026
Since the cryptocurrency market is the only financial industry operating during the weekend, it endured significant volatility as the events unfolded. After the initial strikes, bitcoin plunged from $66,000 to $63,000 within minutes, and the altcoins followed suit.
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However, it rebounded in the following hours and even jumped to $67,000 minutes ago after the reports about Khamenei’s death.
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Crypto World
KAI Exchange Celebrates Satoshi Nakamoto’s Birthday on March 1 With 10,000 Traders Worldwide
[PRESS RELEASE – Dubai, United Arab Emirates, February 28th, 2026]
KAI Exchange, the world’s leading AI-native cryptocurrency trading platform, says it has received a mysterious message from Satoshi Nakamoto: “April 5th is not Satoshi Nakamoto’s birthday (that belongs to Changpeng Zhao); Satoshi’s real birthday is March 1st.”
Upon receiving this confidential message, KAI Exchange immediately decided to host the “Satoshi Nakamoto Birthday Bash” on March 1, inviting users to join in and become part of a historic moment.
Event Manifesto:
“March 1, 2026, marks the birthday of our beloved Satoshi Nakamoto. Seize this historic opportunity to create an unprecedented myth in Bitcoin history—the legend of 49 Chain Web4.
All future realities will follow the historical traces left on March 1, 2026! Pay tribute to the visionary spirit of Bitcoin founder Satoshi Nakamoto.”
During the event, KAI officially released a striking market forecast: the BTC/USAD trading pair on its platform is expected to challenge an all-time high of 4,927,000 on the day of the event, positioning itself as a market focal point.
The KAI operations team stated that this birthday celebration is not only a tribute to the spirit of Bitcoin but also an innovative exploration of the integration between artificial intelligence and the cryptocurrency market. Through AI-driven market predictions, community engagement, and festive reward mechanisms, KAI aims to deliver a trading experience that combines cutting-edge technology, active participation, and market insight for users worldwide.
As a centralized virtual asset exchange powered by AI at its core, KAI deeply integrates artificial intelligence across all aspects of its operations—from token selection and market trend identification to strategy execution and customer support—providing users with a fast, secure, and intelligent trading experience. Looking ahead, KAI will continue to explore the potential of integrating AI with finance, working hand in hand with users to build a new Web4.0 financial world driven by intelligence.
About USAD:
USAD, as KAI’s native stablecoin, operates on the TOK chain and is a dollar-pegged stablecoin backed by reserve assets. USAD provides rapid settlement and open access capabilities for the KAI platform, serving as a crucial financial cornerstone for the efficient operation of the platform’s ecosystem. USAD: Stable, Transparent, Born for Web 4.0.
For more information on how to participate and event details, please visit KAI’s official website at Kai.com.
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A Bitcoin (BTC) bottom signal that appeared in 2023, ahead of a 130% rally in 2024, has flashed again this week, raising the possibility that the price is nearing another bullish inflection point.
At the same time, the broader data of liquidity, exchange-traded fund (ETF) flows, and macroeconomic data changes the environment from two years ago, suggesting that the path forward may not mirror the previous cycle’s.
BTC bottom trigger appears without strong follow-through
Data aggregator Swissblock noted that Bitcoin has now logged 25 consecutive days in its “extreme high risk” zone, the longest stretch on record and above the 23-day peak seen in 2023. Historically, an extended stay in this zone has aligned with late-stage drawdowns or a bottom signal.
MN Capital founder Michaël van de Poppe also pointed to the BTC versus supply in the profit/loss chart, which shows the price interacting with levels that previously marked bottoming phases. In 2023, the shift from high risk to low risk coincided with the start of a powerful bullish expansion.
Trader positioning is not in sync with an uptrend. RugaResearch noted that 30-day apparent demand continues to flip between positive and negative. While the selling pressure has faded, sustained buying demand has not maintained its dominance.
Related: Bitcoin to $30K? Analysts debate when and at what price BTC will bottom
Deeper Bitcoin drawdowns take time
Macroeconomic newsletter Ecoinometrics highlighted that a BTC decline of this magnitude rarely resolves quickly. Excluding the 2020 COVID rally, which was supported by aggressive monetary policy intervention, the recoveries from 50% drawdowns developed over an extended period.
The ETF flow data reinforces the cautious tone. Since August, cumulative inflows into gold ETFs have surpassed spot Bitcoin ETF flows on a 90-day rolling basis. Over the same period, Bitcoin funds have posted negative flows on a 90-day average rolling basis, currently sitting at –$2.06 billion.
The inflation trends added further context. Ecoinometrics noted that the headline Personal Consumption Expenditures (PCE) sits near 2.9% year-on-year, with core near 3.0% and core services above 3.4%. The Federal Reserve targets PCE, and the recent trend has not shown a clear downward shift. Without easing expectations, the liquidity expansion looks limited.
The price levels frame the debate. CMCC Crest Managing Partner Willy Woo said that any short-term relief rally to $70,000 to $80,000 is likely to be met with another round of selling pressure, since “the broader regime is heavily bearish with both spot and futures liquidity deteriorating”.
Woo said that the $45,000 level aligns with the prior bear market. Below that, $30,000 and $16,000 mark the historical support, which is tied to longer-term trend preservation.
Related: Crypto taxes updated, BTC stuck below $70K: Month in charts
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.
The crypto treasury market is entering a phase of consolidation as a broad downturn tightens liquidity and pushes balance sheets toward NAV discipline. Industry executive Wojciech Kaszycki, chief strategy officer at BTCS, argues that the combination of cash-generating operations—such as validator services for blockchain networks and offerings in public and private credit—gives treasury firms a distinct advantage over those that merely accumulate crypto. The sector experienced a market-wide downturn in 2025, with many treasuries’ stock prices dipping below the book value of the crypto assets on their balance sheets, underscoring the appeal of scale and diversification in a price-sensitive environment. As the cycle remains challenged, strategic mergers and acquisitions are seen as a plausible path to accelerate recovery and create greater resilience.
Key takeaways
- The crypto treasury sector is likely to consolidate in 2025–2026 as firms seek scale to weather a protracted downturn and NAV pressure.
- Operating businesses that generate cash flow—such as validator services for networks and credit instruments—provide a durable income stream and a competitive edge over passive holders.
- Tokenized real-world assets, especially tokenized public and private credit, could become major revenue sources and usable collateral on DeFi platforms.
- RWAs are expected to grow over the next 24 months, with tokenization potentially expanding access to credit markets on blockchain rails.
- Public statements from leaders in the field, plus moves by index providers, signal a continued push to convert crypto treasuries into diversified, income-generating vehicles rather than pure asset pools.
Market context: The wider crypto market has faced liquidity strains and risk-off sentiment, influencing how treasury-focused firms balance crypto exposure with income-generating assets. Tokenized assets and DeFi-based lending and borrowing present new ways to monetize crypto holdings, but scale and governance remain critical concerns as regulators watch the sector closely.
Why it matters
For investors, the shift from pure custody to diversified, income-producing strategies in crypto treasuries could reshape risk profiles and yield expectations. Firms that blend crypto accrual with fixed-income and tokenized credit instruments may deliver steadier cash flows even when crypto prices underperform. This shift also underscores a broader trend toward integrating traditional finance-style revenue sources with blockchain-native assets, potentially broadening the investor base beyond hardcore crypto enthusiasts.
From a builder’s perspective, the push toward tokenized real-world assets and RWAs highlights a need for robust tokenization platforms, secure on-chain collateral mechanisms, and interoperable DeFi layers. If tokenized credit can be reliably originated, securitized, and audited, crypto treasuries could access new pools of capital while offering investors diversified exposure across both digital assets and traditional credit risk—and doing so with increased transparency and liquidity on-chain.
Policy and market infrastructure players are also paying attention. The debate over whether major indices should include crypto-focused treasuries or tokenized credit products continues, with MSСI and other index providers weighing the case for broader crypto exposure through fixed-income-like instruments, a stance that could influence flows and valuation benchmarks. The narrative is not just about price appreciation; it’s about building a durable ecosystem where crypto treasuries function as diversified financial platforms rather than speculative holdings.
What to watch next
- Watch for consolidation announcements among crypto treasury players as 2025–2026 market conditions evolve and NAV pressures persist.
- Track progress in tokenizing real-world assets and the adoption of tokenized public and private credit as DeFi collateral or liquidity channels.
- Monitor MSCI or other index providers’ commentary or actions regarding crypto treasury companies and RWAs, which could influence institutional access to the sector.
- Follow regulatory developments around tokenized debt, on-chain collateral standards, and cross-border credit instruments used by treasuries.
- Observe liquidity trends in DeFi lending and borrowing protocols linked to tokenized assets, which may shape demand for treasury-based credit products.
Sources & verification
- Interviews and comments from Wojciech Kaszycki, chief strategy officer at BTCS, regarding consolidation and the role of cash-flow-generating operations.
- Analysis of the 2025 market downturn affecting crypto treasury stock valuations relative to crypto holdings on balance sheets (referenced in related industry coverage).
- Research and discussion around tokenized real-world assets, particularly tokenized public and private credit, and their potential use as DeFi collateral.
- MSCI correspondence and potential considerations for including crypto treasury players or RWAs in its indices, as cited in industry discussions.
- RWA.XYZ private credit overview and related on-chain accessibility of tokenized credit markets.
Market reaction and consolidation in crypto treasuries
Bitcoin (CRYPTO: BTC) treasuries, the subset of crypto asset managers that hold substantial balances of digital assets while simultaneously running revenue-generating operations, stand at a crossroads. The central argument advanced by Kaszycki is that the operating backbone of treasury firms—validator services that secure and govern blockchain networks, and a suite of credit-related offerings—provides a recurring cash flow that pure hodling strategies cannot match. This cash flow, in turn, enables strategic investments in distressed peers and underperforming units, potentially at prices that reflect fear rather than fundamental value. In effect, the downturn could be seen not just as a bear market, but as a field test for structural resilience built on diversified income rather than price appreciation alone.
The narrative is reinforced by a recent market backdrop where many crypto treasuries traded below the net asset value of their crypto holdings, a situation described as a “market-wide downturn” in 2025. The phenomenon underscores the tension between asset prices and the underlying value of on-chain and off-chain earnings streams. It also foreshadows the possibility that consolidations—mergers or acquisitions that combine cash-generating platforms with asset-light traders—could reshape the competitive landscape. In practical terms, a merger between two nimble players with complementary business models can generate outsized gains relative to the sum of their parts. Kaszycki’s line that “two plus two equals six or more” captures a belief that coordination and scale can enable quicker defense and faster growth in a market where many players struggle to maintain NAV integrity.
On the revenue side, tokenized credit markets and RWAs emerge as a core theme. Public and private credit instruments, already a fixture in traditional finance, are increasingly being considered for tokenization on blockchain rails. The idea is that tokenized real-world assets could be used as collateral for DeFi lending or borrowing protocols, providing liquidity and yield diversification for treasuries while tethering crypto-native products to broader credit markets. The concept of tokenized credit is not new, but the expectation that it will expand meaningfully over the next 24 months reflects a broader shift toward on-chain monetization of real-world risk. A companion thread to this development is the growth of tokenized private credit, which is already being showcased by specialized platforms and research projects that map the space as a new frontier for treasury income streams.
In parallel, Strategy—widely regarded as the largest Bitcoin treasury operator—has leveraged fixed-income and credit-like instruments to offer investors economic exposure to Bitcoin through a range of securities. The firm’s approach, highlighted in communications with index providers, demonstrates how crypto treasuries are trying to blend regular income with crypto exposure and risk controls. This dual focus positions treasuries to respond to index-provider dynamics, with MSCI and similar bodies exploring the potential inclusion of crypto-based instruments in mainstream benchmarks. The ongoing dialogue around RWAs and fixed-income instruments signals a convergence between crypto treasury strategies and traditional financial product design, which could be a meaningful driver of adoption, capital formation, and governance clarity for a broader audience.
Looking ahead, the tokenization narrative is anchored by industry references to RWAs as a growth engine. The idea that tokenized assets—particularly tokenized credit—could eventually underpin a meaningful portion of treasury revenue is compelling, but it hinges on robust standards for on-chain settlement, risk management, and regulatory clarity. Market observers are watching for concrete progress in the next 12–24 months, including progress reports on RWAs, tokenization platforms’ capabilities, and credible case studies of on-chain collateral use in DeFi lending markets. The RWA.XYZ private credit overview serves as a signal that such workflows are not merely theoretical; they are being tested in real markets, with potential implications for liquidity, pricing, and risk dispersion across the crypto ecosystem.
Ultimately, the evolving picture of crypto treasuries reflects a broader trend toward financialization within the sector. While price cycles will continue to influence sentiment, the combination of cash-flow-generating operations, tokenized asset strategies, and disciplined NAV management could redefine the role of treasuries—from passive storage of value to active participants in a more complex, multi-asset financial landscape. The next chapters will likely be written by firms that can blend on-chain innovation with traditional risk controls, while keeping a clear eye on market cycles, regulatory developments, and the flow of capital between crypto markets and conventional finance.
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