A fresh read on on-chain and derivatives signals suggests institutional appetite for crypto has cooled further, with the Coinbase premium slipping deeper into negative territory. The metric, which tracks the gap between Bitcoin prices on Coinbase (a venue favored by U.S. institutions) and Binance (more retail-oriented), slid to its lowest level this month at -0.0983% on May 21, underscoring renewed selling pressure from professional investors.

The premium has remained negative since late April, but the pace of decline picked up over the last week. CryptoQuant analyst Darkfost characterized the move as a heightening of selling pressure among institutional traders. “Institutional selling pressure has intensified recently,” Darkfost said. “This suggests that the population of institutional and professional investors trading on Coinbase Advanced is selling more aggressively than investors trading on Binance.”

Beyond the Coinbase premium, the broader macro backdrop appears to bolster a cautious stance among institutions. Gold—historically viewed as a hedge—has fallen about 5.8% over the past month, while equities across the S&P 500 and Dow Jones have shown gains since early April. That mix points to a risk-on tilt in traditional markets and a reallocation that may be weighing on crypto demand at the margin.

Key takeaways

• The Coinbase premium sits negative, with the May 21 reading at -0.0983%, signaling intensified institutional selling pressure on Coinbase Advanced relative to Binance.
• Analysts tie the shift to hedging behavior amid macro uncertainty, with institutions repositioning and possibly taking profits, which could dampen near-term crypto momentum.
• Bitcoin ETF outflows in the United States accumulate, totaling about $1.3 billion over four trading days since May 14, while derivatives demand shows signs of waning.
• Open interest in Bitcoin futures and perpetuals declined by roughly $1.5 billion in the week, suggesting a reset of leveraged bets and a potential reliance on actual spot demand for the next move.
• Bitcoin itself has fallen about 4.5% over the past week, trading near $77,600 after a monthly low just above $76,000, roughly 38% below its October peak.

Institutional positioning and the “premium” signal

The Coinbase premium has long been monitored as a proxy for the behavior of sophisticated buyers in the U.S. market. When the premium turns negative, it implies Coinbase’s price is softer than Binance’s, which can reflect a withdrawal of U.S. institutions from spot exposure or a shift toward hedging strategies. In this cycle, the trend toward negative readings has persisted for weeks, but the steep drop over the last seven days has heightened concerns about whether a larger cohort of funds is stepping back from fresh exposure to Bitcoin.

Nick Ruck, research director at LVRG, offered a cautionary angle: the drop in the premium could signal “the emergence of net selling pressure from larger holders,” potentially indicating profit-taking or portfolio rebalancing. He warned that such dynamics might weigh on near-term price momentum across major crypto assets, especially if spot demand remains lackluster as institutional selling persists.

By contrast, some market participants view the divergence between Coinbase and more retail-oriented venues as a gauge of sector rotation rather than a pure directional bet on price. Still, the current signal aligns with a broader pattern of institutions slowing or pausing fresh allocations while macro clarity remains elusive.

ETF outflows and dwindling derivatives activity

The latest data on U.S. spot Bitcoin ETFs adds another layer to the selling narrative. CoinGlass reports four consecutive trading days of outflows totaling roughly $1.3 billion since May 14. The pace of withdrawals suggests institutions are reallocating capital away from spot exposure or consolidating risk in other assets amid ongoing uncertainty.

Concurrently, operator activity in the derivatives market is cooling. Bitfinex noted that open interest—the aggregate value of outstanding Bitcoin futures and perpetual contracts—dropped by around $1.5 billion during the week. That retrenchment follows a period in which leveraged positioning had been building as Bitcoin moved toward the $82,000 region. The exchange framed the current environment as a transition: “With short-side fuel exhausted and long positioning reset lower, the next major move likely depends on spot demand.”

Bitcoin itself has retraced recently, posting a 4.5% decline over the past week and touching a monthly low just above $76,000 on Tuesday. At the time of writing, the asset hovered around $77,600, about 38% below its October peak. The combination of ETF withdrawals, falling open interest, and a still-fragile spot bid paints a picture of a market waiting for a catalyst—whether macro clarity, stronger institutional demand, or a sustained shift in risk sentiment.

Implications for traders and builders

These indicators point to a market environment where institutional demand remains tepid and price action is predominantly contingent on spot-buying vigor rather than leveraged bets. For traders, the deterioration in the Coinbase premium and the uptick in ETF outflows suggest a cautious stance: any upside move will likely require a tangible uptick in spot demand rather than relief rallies driven by derivatives leverage.

From an infrastructure and product perspective, the signals reinforce the importance of robust on-ramp options, transparent liquidity channels for institutions, and clarity on how macro shifts might influence hedging behavior. For developers and builders, evolving custody and settlement workflows, regulatory clarity, and improved access to compliant institutional products could help bridge the gap between retail enthusiasm and institutional participation.

Looking ahead, observers will be watching two intertwined threads: whether spot demand strengthens enough to absorb the existing overhang from hedgers and large holders, and how ETF and derivatives flows respond to fresh macro data and regulatory signals. If institutional selling persists and the premium remains negative, risk assets, including Bitcoin, could face the near-term pressure that many market participants already anticipate.

In the near term, investors should monitor whether spot demand improves or whether the current dynamics prolong the consolidation phase. The coming weeks will be telling for whether the dip in the Coinbase premium and ETF outflows translate into a broader regime shift or a temporary pause before renewed interest from institutional buyers returns.

What remains uncertain is how incoming macro developments—ranging from inflation data to regulatory updates and central-bank policy—will shape the risk appetite of large funds with crypto exposure. As ever, the market’s next move is likely to hinge on the delicate balance between hedging needs, liquidity availability, and the evolving appetite for risk across traditional and digital asset classes.

Polymarket, the world’s largest decentralized betting platform, has gone dark for users in India. The website says, “This site can’t be reached. Check if there is a typo in polymarket.com.”

Refreshing the page does not resolve the connection issue.

The outage follows an April 25 advisory from the Ministry of Electronics and Information Technology (MeitY) directed at VPN service providers. The advisory warned that local users were continuing to access “illegal and blocked prediction market and online betting platforms” despite “domestic prohibitions.”

According to the directive, internet service providers were required to terminate access to prediction markets, with Polymarket among the primary targets.

While Kalshi, a platform regulated by the U.S. Commodity Futures Trading Commission (CFTC), is currently still accessible, it may soon face a similar fate. Local media reports, citing an anonymous source within MeitY, claim the agency has “already issued a blocking order to Polymarket and are in the process of issuing an order to Kalshi as soon as Friday.”

CoinDesk reached out to Polymarket and Kalshi for a comment.

Prediction markets enable users to wager real money on the outcomes of binary events, such as referendums, financial asset price movements, and election results. These platforms saw a massive surge in global popularity during the 2024 U.S. presidential election, becoming a primary venue for investors to hedge or bet on political outcomes.

However, the Indian government classifies the activity on these platforms as online money gaming. As a result, they fall under a category that is completely prohibited under the Promotion and Regulation of Online Gaming Act 2025.

The Indian government has maintained a consistently “risk-averse” and prohibitive stance toward the cryptocurrency sector, prioritizing financial stability and capital control over industry growth. New Delhi has utilized a “shadow ban” strategy through punitive taxation, including a 30% flat tax on gains and a 1% tax deducted at source (TDS) on all transactions, which has effectively throttled domestic trading volumes.

The Ministry of Finance has focused on bringing the sector under strict Anti-Money Laundering (AML) and Counter-Strike Financing (CFT) oversight via the Financial Intelligence Unit (FIU). This regulatory environment has pushed many local crypto startups to relocate to more friendly jurisdictions like Dubai or Singapore, as the government and the Reserve Bank of India continue to signal that it views private cryptocurrencies more as speculative “money games” than legitimate financial innovation.

India’s Parliamentary Standing Committee on Finance met crypto exchanges Binance, WazirX and Zebpay in Delhi on May 20 to discuss regulations and taxation for what it calls a virtual digital assets (VDA) industry.

The committee expressed concerns over massive outflows from the country via the crypto channel.

XRP held near $1.37 by midday Hong Kong time on Thursday, according to CoinDesk market data, with fresh ETF and on-chain data suggesting some investors may be rotating into XRP. Meanwhile, market leader bitcoin BTC$77,341.59 hovered around $77,400 and ether (eTH) remained under pressure.

CoinGlass data shows XRP-linked funds pulled in $8.88 million in the latest session, extending a streak of positive flows that includes $18.52 million on May 14 and $10.87 million on May 15. Across the past week, XRP products have attracted roughly $42 million in net inflows.

This has caught analysts’ attention because money has been leaving the largest listed crypto products. Bitcoin ETFs lost another $100.9 million in the latest daily session, following redemptions of $648.6 million, $331.1 million, and $290.4 million earlier in the same stretch. Ether products also remained under pressure, losing $32.6 million in the latest session.

The data suggests a selective appetite for alternative crypto exposure, though XRP’s broader network growth trend remains weaker than late 2025 levels.

Onchain activity offers a second, though less definitive, signal.

XRP recorded the fourth-largest daily spike in wallet creation this year, with 4,300 new wallets added in 24 hours, according to Blockchain analytics firm Santiment.

Fresh wallet creation can sometimes point to new network participation, particularly when paired with capital inflows.

But the broader Santiment chart suggests caution.

XRP’s network growth has generally trended lower since late 2025, making the latest move look more like a sharp one-day spike than clear evidence of sustained adoption.

For traders, the question is whether XRP is seeing the early stages of a broader rotation trade, or simply a short-lived burst of speculative positioning while the wider crypto market remains under pressure.

Binance CEO Richard Teng has rejected a new Wall Street Journal report, saying it contains wrong claims about the exchange’s sanctions controls.

Teng said in a post on X that the WSJ report contains “fundamental inaccuracies” about Binance and its compliance program. He said Binance did not permit transactions with sanctioned individuals and that the transactions mentioned by the publication happened before the people involved were sanctioned.

The WSJ reported that Iranian-linked networks used Binance accounts to move large sums, including funds allegedly tied to sanctioned activity. The report said the activity involved accounts connected to financier Babak Zanjani and crypto firm Zedcex. Binance disputed the claims and said the information was inaccurate.

Teng says Binance reviewed the matter

Teng said Binance had already reviewed the issues before the WSJ contacted the company. He also said Binance gave those details to the publication, but they were not included in the report.

He added that Binance has “zero-tolerance for illicit activity” and will continue working with U.S. and global law-enforcement agencies to fight financial crime. The comment keeps Binance’s defense focused on timing, internal review, and cooperation with authorities.

Compliance record stays under review

The latest dispute follows earlier reports and government questions about Binance’s sanctions systems. In March, Binance formally denied allegations that it allowed transactions linked to Iran and said media reports cited in a U.S. Senate inquiry contained false claims about its compliance program.

Binance said at the time that it requires identity checks for every user and bars people located in Iran from using the exchange. The company also said it uses more than 25 monitoring tools to screen users and review transactions.

Past settlement shapes the debate

The issue remains sensitive because Binance pleaded guilty in 2023 to U.S. anti-money-laundering and sanctions violations. The Justice Department said Binance agreed to pay more than $4.3 billion and retain an independent compliance monitor as part of that resolution.

U.S. officials said the case included failures that allowed transactions between U.S. users and users in sanctioned jurisdictions, including Iran, between 2018 and 2022. Binance has since said it rebuilt parts of its compliance system and improved its monitoring.

Binance points to stronger controls

Binance has repeatedly pointed to recent metrics as proof of progress. Earlier reports said the exchange claimed sanctions-related exposure fell 96.8% between January 2024 and July 2025, from 0.284% of total exchange volume to 0.009%.

The company also said more than 1,500 workers now support compliance, sanctions screening, investigations, and risk functions. Binance said it processed more than 71,000 law-enforcement requests in 2025 and helped authorities recover funds linked to illicit activity.

U.S. Securities and Exchange Commission Commissioner Hester Peirce has pushed back against expectations that the agency could soon open the door to unrestricted tokenized stock trading through a proposed “innovation exemption.”

According to comments Peirce posted on X on Thursday, any exemption under consideration would apply only to on-chain versions of existing equity securities that already trade in public secondary markets.

She said she has always expected the proposal to remain “limited in scope,” adding that it would facilitate trading only for “digital representations of the same underlying equity security that an investor could purchase in the secondary market today.”

Her clarification arrived days after Bloomberg reported that the SEC was exploring a conditional exemption framework that could allow certain tokenized securities products to operate with modified regulatory requirements.

Fox Business journalist Eleanor Terrett described Peirce as “tempering expectations” around the proposal and narrowing its focus to “onchain equity products, not synthetic tokens that mimic stocks without giving investors the same shareholder rights.”

Peirce’s comments also appear to rule out synthetic stock-style tokens under the contemplated exemption. Such products typically track the price of equities without granting holders ownership rights tied to the underlying shares.

SEC discussions focus on shareholder rights

As previously reported crypto.news, SEC officials have discussed permitting tokenized equities only if the tokens preserve the same economic and governance rights attached to traditional shares, including voting rights and dividend access.

People familiar with the matter said the agency has gathered feedback from hundreds of market participants while shaping the proposal. The report added that discussions remain ongoing and the final terms could still change before any exemption is approved.

Concerns over synthetic stock products surfaced soon after the news surfaced. Brett Redfearn, president of tokenization firm Securitize, warned that allowing third parties to tokenize stocks without issuer involvement could create fragmentation problems across the market.

Other industry figures have also backed Peirce’s narrower interpretation.

Robert Leshner, CEO of tokenization platform Superstate, said on X that limiting tokenized trading to properly structured on-chain equities would allow decentralized finance and tokenization markets to grow “without compromising the standards that make the USA the center of capital markets.”

Meanwhile, Carlos Domingo, CEO of Securitize, has argued that restricting the exemption to genuine equity-linked assets would reduce risks tied to synthetic products.

“This is good, we want to do on-chain trading, but for the right assets, and not to help proliferate those derivatives that are fragmenting the market and introducing additional risks,” Domingo said.

Even with rising interest from crypto firms and financial institutions, tokenized equities remain a relatively small corner of the digital asset sector, though it is expected to grow. 

Data from RWA.xyz shows that tokenized stocks currently account for roughly $1.48 billion in on-chain assets. Existing offerings include tokenized exposure tied to companies such as Circle, Strategy, and Google.

Total RWA market value. Source: RWA.xyz

Previously, it was also reported that some SEC officials remain hesitant about allowing tokenized stock trading at all, despite ongoing discussions around a possible exemption.

A key indicator of institutional crypto market participation, the Coinbase premium has fallen deeper into negative territory, indicating increased selling pressure from institutions.

The Coinbase premium has been mostly negative since late April, but it has fallen much faster over the past seven days and recorded its lowest level this month at -0.0983% on May 21.

“Institutional selling pressure has intensified recently,” CryptoQuant analyst Darkfost said on Thursday. 

“This suggests that the population of institutional and professional investors trading on Coinbase Advanced is selling more aggressively than investors trading on Binance.”

Institutional investors are also shying away from store-of-value assets such as gold, which is down 5.8% over the past month, favoring stocks with the S&P500 and Dow Jones indexes trending up since the beginning of April. 

Analyst Axel Adler said the results suggest “zero confirmation from US spot demand.”

The Coinbase premium is a measure of the difference between Bitcoin prices on Coinbase, which is used more by US institutions, and Binance, favored more by retail investors. 

Coinbase premium falls to its lowest level this month. Source: Coinglass

Institutions are repositioning  

“The uncertainty surrounding the current macro environment appears to be pushing institutions toward hedging strategies while waiting for greater clarity,” Darkfost said. 

LVRG research director Nick Ruck told Cointelegraph the decline of the Coinbase premium could also reflect the “emergence of net selling pressure from larger holders,” and suggest institutions are taking profits or repositioning, which  “could weigh on near-term price momentum across major crypto assets.”

Bitcoin ETF outflows accelerate, derivatives decline

Another signal of institutional selling pressure is US spot Bitcoin exchange-traded funds, which have seen four trading days of outflows totaling $1.3 billion since May 14, according to CoinGlass.

Related: Bitcoin longs soar despite weak US macroeconomic data: Is $82K BTC next?

Derivatives demand also appears to be weakening, with open interest, or the value of open Bitcoin futures or perpetual contracts, dropping by around $1.5 billion this week, “clearing much of the leverage built up during Bitcoin’s move toward $82,000,” said Bitfinex.

“With short-side fuel exhausted and long positioning reset lower, the next major move likely depends on spot demand,” it added.

Bitcoin has declined 4.5% over the past week, hitting a monthly low just above $76,000 on Tuesday. It was flat on the day at $77,621 at the time of writing, down 38% from its October peak.

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Bitcoin BTC$77,415.47 traded near $77,733 by midday Hong Kong time, according to CoinDesk data, little changed over the past 24 hours, after sliding as low as $76,685 and failing to hold above $78,000 during U.S. trading hours.

Derivatives positioning suggested the recent selloff may have been more of a leverage flush than the start of a broader market breakdown. Open interest, a measure of outstanding leveraged futures positions, held relatively steady while funding rates stayed low or negative, a sign that traders were not aggressively piling into bullish bets before the drop.

“There was no massive accumulation of leveraged longs prior to this, meaning most of those liquidated in this drop were leveraged funds attempting short-term bottom-fishing. Second, this signals that we are not in the middle of a structural trend reversal downward. The temporary bottom of $75,000–$77,000 remains well-defined,” Tim Sun, senior researcher at HashKey Group, told CoinDesk

The bigger problem, he said, is macro: investors are de-risking as long-term yields rise, oil and inflation risks remain in focus, and there is “currently no compelling reason for new capital to enter the market.”

CoinGlass data showed $200 million in crypto liquidations over the past 24 hours, split almost evenly between long and short positions, suggesting the move was less a one-sided capitulation than a volatile market whipping both directions.

Sun pointed to the U.S. 30-year Treasury yield, which recently pushed above 5%, as the more important pressure point. Higher long-term yields tend to weigh on speculative assets by raising the opportunity cost of holding non-yielding assets like bitcoin while tightening broader financial conditions.

The next catalyst may come from geopolitics.

Sun said a meaningful de-escalation in U.S.-Iran tensions could cool oil prices and inflation expectations, easing pressure on yields and giving bitcoin room to rebound.

But if yields remain elevated and geopolitical risks persist, bitcoin may stay stuck in what he described as a defensive, range-bound market, with the $75,000 to $77,000 zone serving as the key near-term support level.