David Schwartz says the XRP Ledger was deliberately designed to prevent Ripple or any single actor from controlling the chain.

Ripple CTO David Schwartz has said that the XRP Ledger (XRPL) was deliberately designed so that neither the company nor any single entity could control it.

His remarks came hours after Cyber Capital founder Justin Bons argued that XRPL is effectively permissioned and centralized, with the exchange cutting to a long-running debate in crypto over what decentralization actually means and whether validator lists amount to hidden control.

Clash Over Control and the Unique Node List

Bons wrote in a February 24 thread on X that networks such as Ripple, Stellar, Hedera, Canton, and Algorand rely on permissioned elements. He claimed XRPL’s Unique Node List, or UNL, gives Ripple and its foundation “absolute power and control over the chain,” arguing that divergence from the published list could cause a fork.

However, Schwartz rejected that characterization, calling it “objectively nonsensical.” He said XRPL nodes individually decide which validators to trust and will not agree to double-spends or censorship unless their operators explicitly choose to.

If a validator attempts to censor or double-spend, “an honest node would just count it as one validator that it did not agree with,” he wrote.

However, Schwartz acknowledged that validators could conspire to halt the chain from the perspective of honest nodes but said they could not force double-spends. In such a case, node operators could switch to a different UNL, which he compared to changing the mining algorithm in Bitcoin after a majority attack.

The XRPL co-architect also addressed regulatory pressure, noting that Ripple must comply with U.S. court orders and cannot refuse them. For that reason, he argued, XRPL was intentionally built so that Ripple itself could not censor transactions.

You may also like:

“The best way to be able to say ‘no’ is to have to say ‘no’ because you cannot do the thing asked,” Schwartz wrote.

Regulatory Pressures and Network Resilience

The exchange comes as XRPL activity metrics have shown significant declines, with analyst Arthur reporting on February 23 that active users fell to roughly 38,000 from more than 200,000, while payment volume dropped to about 80 million XRP from over 2.5 billion.

However, the on-chain observer attributed the drop to the February 18 activation of XLS-81, a permissioned decentralized exchange system that moves institutional transactions off public dashboards.

Questions about validator power also surfaced late last year, when Schwartz proposed a two-tier staking model intended to add rewards without concentrating influence in Ripple’s hands. The idea involved a separate governance token to manage validator lists, with the option to fork if governance failed.

For now, the February 25 exchange highlights a familiar divide. Critics argue that publishing validator lists creates soft control, even if anyone can technically run a node. However, Schwartz maintains that XRPL’s consensus model was built to limit the power of validators and companies alike, even if that means Ripple itself cannot intervene when pressured.

MIAMI BEACH — Bitcoin’s BTC$65,121.75 recent slide has frustrated investors who expected a smoother ride after a wave of institutional milestones, but Adam Back, one of the early cypherpunks cited in bitcoin’s 2008 white paper, said the volatility should not surprise long-time observers.

“Bitcoin is generally volatile,” Back said at the iConnections conference in Miami Beach on Tuesday. “There’s a lot of positive news […] and in the previous four year market cycles, this has been about a time in a cycle where price runs lower.”

He suggested that some market participants may be trading around that historical pattern rather than reacting to fundamentals. “There was some expectation or possibility that, because there are different types of investors, the market can be different. So I think some people are thinking the price may come back later in the year.”

Bitcoin entered the year with a tailwind. A more crypto-friendly administration in Washington and long-awaited regulatory clarity around spot exchange-traded funds (ETFs) were expected to unlock deeper institutional participation.

For many investors, this was also meant to be a proving ground. Bitcoin’s core pitch has long centered on scarcity and independence from government monetary policy and to be a digital store of value designed to hedge against currency debasement. At a time when U.S. fiscal deficits remain large and questions about the dollar’s long-term purchasing power persist, the backdrop appeared aligned with that thesis.

Yet the market has not followed the script. Bitcoin is down roughly 26% over the past year, even as the policy environment turned more supportive and institutional access improved. Instead of decoupling from macro uncertainty, the asset has at times traded in line with broader risk markets.

Meanwhile, traditional safe havens have rallied. Gold has climbed to fresh all-time highs, with silver also reaching multi-year peaks. Capital seeking shelter from inflation concerns and geopolitical risk appears to have flowed, at least in part, into metals rather than digital assets.

Back, who is now the CEO of Blockstream as well as the Bitcoin Standard Treasury Company (BSTR), also pointed to structural dynamics in who holds bitcoin.

“The ETF holders […] are more sticky investors than the retail bitcoin exchange traders,” he said. Retail participants often deploy most of their capital during rallies, leaving little dry powder during downturns. Institutions, by contrast, can rebalance across portfolios.

Still, Back cautioned that institutional adoption remains early. “I think there isn’t that much institutional capital yet.”

In his view, large pools of capital have not yet fully entered the market, even though major regulatory hurdles have been resolved and clearer rules could pave the way for more institutional inflows.

Over time, he expects broader adoption to reduce volatility. He compared bitcoin’s current phase to early high-growth equities. “You can look at analogies of, say, early Amazon (AMZN) stock, which had wild swings in price, basically because the market was uncertain.”

“The kind of rapid adoption curve inherently brings with it volatility,” he said. As adoption matures and more institutions, companies and sovereigns gain exposure, Back said bitcoin’s price swings should moderate. He does not expect volatility to disappear, but said he believes it could begin to resemble gold, which trades with less dramatic moves than a younger asset.

Back also said he measures bitcoin’s long-term potential against gold’s total market value. He argued that comparing the two market capitalizations offers a rough benchmark for adoption, and in his view bitcoin remains roughly 10 to 15 times smaller than gold today, suggesting room for further growth if it continues to capture share as a store of value.

Despite short-term price swings, Back argued bitcoin’s long-term investment case remains intact. “Bitcoin as an asset class has stood out from everything, every other asset class for the last decade generally, in having the highest annualized return,” he said.

For Back, volatility is not a contradiction of bitcoin’s thesis but a feature of its adoption phase. “Volatility […] is part of the picture,” he said.

Real-world asset tokens have continued to bleed through February 2026, with several major RWA tokens to watch sitting over 80% below their recent highs. The sell-off has been broad and unforgiving.

But heading into March, technical reversal signals are beginning to form across multiple charts, supported by declining exchange inflows and steady ETF demand. Here are 3 tokenized asset projects where the setup is starting to shift.​​​​​​​​​​​​​​​​

Stellar (XLM)

Stellar’s real-world asset footprint is growing even as its token struggles. Data from RWA.xyz shows the network’s distributed asset value has climbed to $1.27 billion, up 25% over the past 30 days. On the institutional side, CME Group launched Stellar futures on February 9, 2026. Both standard and micro-sized contracts are now live, giving institutions a regulated on-ramp to XLM for the first time.

Despite that, the XLM price remains under pressure. Stellar is down roughly 40% over the past three months and trades near $0.154. But the charts are starting to tell a different story.

Between December 18 and February 24, XLM printed a lower low while the Relative Strength Index (RSI), a momentum indicator, formed a higher low, a standard bullish divergence. This is a textbook reversal signal, and it has a recent precedent. A similar setup appeared around February 11, after which Stellar rallied approximately 23% before correcting.

Want more token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here.

If the current divergence plays out heading into March, the first hurdle sits at $0.164, a level that has flipped between support and resistance multiple times. Clearing it opens the path toward $0.185 (where the last rally stopped) and then $0.210, which aligns with the 0.618 Fibonacci retracement and would mark the first real structural shift in months. A move beyond that puts $0.230 in play.

On the downside, failure to reclaim $0.164 keeps Stellar range-bound. A break below $0.136 invalidates the reversal thesis.

With RWA adoption accelerating and institutional infrastructure now live, Stellar (XLM) stands out as a real-world asset token to watch in March. The fundamentals are building. The divergence suggests the price may be getting ready to catch up.

Chainlink (LINK)

Chainlink continues to lead as oracle infrastructure for the tokenized asset economy, and its spot ETF performance is reinforcing that positioning. While Bitcoin ETFs have suffered through nearly six consecutive weeks of net outflows, Chainlink has not recorded a single red week since its ETFs launched.

That kind of consistency in a risk-off environment is rare across the RWA sector and signals steady institutional-grade demand even as broader crypto sentiment deteriorates.

On the charts, LINK is forming an inverse head and shoulders pattern on the 12-hour timeframe, a structure that carries roughly 35% breakout potential if the neckline breaks.

However, the neckline slopes downward, which means a clean 12-hour break above $9.00 is needed to trigger the move. Chainlink already tested this level between February 19 and 21 while rebounding from the right shoulder, but it failed at $9.00 and pulled back. That rejection makes the neckline even more significant. A confirmed daily close above it would be a strong signal, both technically and in terms of sentiment.

If LINK reclaims $9.00, the breakout path opens toward $11.30, which aligns with the measured move from the pattern. A key resistance could still halt the probable rally at $10.00.

On the downside, losing $8.00 weakens the structure. A decisive break below $7.20 fully invalidates the inverse head and shoulders and shifts the bias bearish.

With on-chain adoption expanding across tokenized securities and cross-chain interoperability, and ETF flows showing no signs of fading, Chainlink remains one of the stronger RWA tokens to watch heading into March. The failed neckline test makes the next attempt critical. If $9.00 breaks, the setup could deliver one of the cleaner moves in the real-world asset space this quarter.

Ondo Finance (ONDO)

Ondo Finance remains one of the largest tokenized asset platforms in the real-world asset sector, with more than $2.5 billion in total value locked. Despite that growth, the ONDO token has not kept pace. Since reaching its all-time high of $2.14 in December 2024, ONDO has declined more than 80% and now trades at $0.25. That disconnect makes it one of the most heavily discounted real-world asset tokens relative to its underlying platform expansion.

A potential shift is now appearing on the technical side. Between January 25 and February 24, ONDO formed a lower low while the Relative Strength Index printed a higher low. This creates a standard bullish divergence, a classic early-reversal signal, the same as XLM discussed earlier.

On-chain data reinforces that signal. Exchange inflows dropped sharply after February 24, falling from 42.91 million ONDO to just 4.54 million. That represents an approximately 89% decline in tokens moving to exchanges, possibly for selling.

When exchange inflows collapse right as a divergence signal forms, it suggests that selling pressure behind the downtrend is fading.

Looking ahead, the first key level sits at $0.26. Holding and breaking above this level would confirm short-term strength and open the path toward $0.30, which has acted as repeated resistance in recent weeks.

A successful reclaim of $0.30 would strengthen the reversal structure and allow for a move toward $0.36. A move to $0.30 would represent roughly 19% upside from current prices.

On the downside, support rests at $0.23. Losing that level would increase the risk of another leg lower toward $0.20. This level remains the most important structural floor. A break below $0.20 would weaken the early reversal thesis and confirm that the longer-term downtrend is still in control.

TLDR:

• US agents seized over $61M in Tether linked to a large-scale crypto pig butchering romance scam.
  
• Scammers built fake romantic relationships to direct victims toward fraudulent crypto trading platforms.
  
• HSI agents traced stolen USDT through multiple wallets before recovering funds still held in them.
  
• Tether cooperated with federal authorities, assisting in the transfer of the seized USDT assets.

US agents seize $61M USDT in a major federal operation targeting cryptocurrency romance fraud. The U.S. Attorney’s Office for the Eastern District of North Carolina confirmed the recovery of over $61 million in Tether.

Homeland Security Investigations traced the funds to wallets connected to a large-scale pig butchering scheme. The case began after a fraud victim filed a report through the HSI Tip Line in Raleigh, North Carolina.

Romance Tactics Used to Lure Crypto Victims

Scammers behind the operation first approached victims under the guise of romantic interest. They built trust over time before introducing the topic of cryptocurrency investment opportunities. Once victims felt secure in the relationship, the fraud began to take shape.

The criminals then claimed to have special techniques for generating high returns through crypto trading. They directed victims to fake platforms that closely resembled legitimate cryptocurrency exchanges. Those platforms were designed to look credible in both name and appearance.

Fabricated investment dashboards showed unusually high portfolio gains to keep victims engaged. The false returns were intended to convince victims to deposit more and more money. Nothing shown on those platforms reflected any real trading activity.

When victims attempted to withdraw funds, they were blocked at every turn. Scammers cited reasons such as unpaid “taxes” or “fees” as conditions for releasing money. Those demands were simply further attempts to drain victims of additional funds.

How HSI Tracked and Seized the USDT

After receiving the tip, HSI agents and analysts in Raleigh launched a blockchain tracing operation. They followed the stolen funds as they moved through a series of cryptocurrency wallets.

The movement of funds was a deliberate effort to obscure the origin and ownership of the money.

Despite the layering tactics used, investigators successfully traced the path of the funds. Several wallets at the end of that chain still held large amounts of victim money. Those wallets became the target of federal seizure and forfeiture action.

HSI Charlotte Acting Special Agent in Charge Kyle D. Burns addressed the nature of the threat:

“HSI special agents work diligently to trace the illicit proceeds of crime across the globe to disrupt and dismantle the transnational criminal organizations that seek to defraud hardworking Americans.”

Tether played a cooperative role in the final stage of the recovery process. The company assisted federal authorities in transferring the seized USDT assets. The Department of Justice formally acknowledged Tether’s support in completing the operation.

U.S. Attorney Ellis Boyle reinforced the message behind the seizure:

“Our asset forfeiture team worked along with HSI to take the profit out of crime.”

The case proves that crypto transactions, while complex, leave traceable trails. Federal coordination with stablecoin issuers is becoming a sharper tool against large-scale fraud.

Crypto markets saw a moderate bounce on Wednesday as buyers returned across major tokens, reversing some recent losses. Today, Feb. 25, total crypto market cap climbed about 6% to roughly $2.42 trillion.

Bitcoin (BTC) rose from around $62,900 late Tuesday to about $68,200 at publishing time, posting a 6.2% daily gain and pushing its weekly change just slightly into the green.

Ethereum (ETH) outperformed BTC, jumping over 10% to trade back over $2,060, and up a solid 4.6% on the week. Across the rest of the top-10 crypto assets — all trading higher — Solana (SOL) posted the biggest daily gain, up over 12%.

Unstable Footing

Despite the rebound, some on-chain indicators suggest stress hasn’t fully cleared. Analysts at glassnode said in an X post that Bitcoin’s Realized Profit/Loss Ratio (90-day SMA) has fallen below 1, signaling a shift into an excess loss-realization regime.

“Historically, breaks below 1 have persisted for 6+ months before reclaiming it, a recovery that typically signals a constructive return of liquidity to the market,” the analysts wrote.

Market sentiment is still shaky. The Crypto Fear and Greed Index ticked up to 11 from 8 a day earlier, pointing to a slight easing in fear, but it remains deep in “extreme fear” territory.

Big Movers and Liquidations

Looking at the top-100 assets by market cap, Filecoin (FIL) led gains, surging over 22%, followed by Polkadot (DOT), up almost 22% as well on the day, and Uniswap’s UNI, up 17%.

On the downside, losses were limited: MemeCore (M) slipped 2.8%, while Midnight (NIGHT) lost half a percent.

According to CoinGlass data, roughly 97,300 traders were liquidated over the past 24 hours, with total losses of $316.2 million. Short positions accounted for the bulk at $258.7 million, while BTC liquidations totaled $8.6 million, ETH slightly above $6 million, and SOL $1.6 million.

ETFs and Macro Conditions

On Tuesday, Feb. 24, spot Bitcoin exchange-traded funds recorded over $257 million in net inflows, pushing total net assets to about $81.3 billion. Spot Ethereum ETFs also saw net inflows yesterday of $9.23 million.

On the macro side, U.S. Treasury yields ticked a bit higher as investors digested Trump’s State of the Union, where he leaned hard on the economy and floated ideas ranging from a government-backed retirement plan to limits on institutional home buying, CNBC reported.

Attention now turns to upcoming U.S. economic data releases, including weekly initial jobless claims due Thursday and the producer price index (PPI) report scheduled for Friday, while traders continue to monitor geopolitical developments involving the U.S. and Iran.

A crypto rally is happening today, with Bitcoin and most altcoins being in the green.

Bitcoin (BTC) price jumped to $68,000, while the market capitalization of all coins rose by 6% to over $2.34 trillion.

Filecoin (FIL) rose by over 25% to $1.10, while Polkadot (DOT) jumped by 21%. Other tokens like Aptos (APT), Morpho (MORPHO), Uniswap (UNI), and Avalanche (AVAX) soared by over 15%. 

Bitcoin and these altcoins jumped as investors embraced a risk-on sentiment across the board. For example, American stocks, including the Dow Jones, Nasdaq 100, and S&P 500, rose by 250, 260, and 35 points, respectively.

The risk-on sentiment happened as investors bought the dip as they waited for the Nvidia earnings, which will come out after the US market closes. NVIDIA is the most influential American company because of its size and role in the artificial intelligence industry.

Additionally, the tokens jumped as the futures open interest rebounded cautiously, a sign that demand is rising. Open interest rose by over 6% in the last 24 hours to $99.4 billion, much higher than this week’s low of $93 billion.

Filecoin’s open interest rose to $154 million, while Morpho soared to over $34 million. The futures open interest of other tokens like Aptos and Polkadot continued soaring.

Still, it is too early to determine whether this is the start of a new crypto bull run or whether it is just a dead-cat bounce. In the past, most crypto market rallieshave turned out to be dead-cat bounces.

A dead-cat bounce is a situation where an asset in a free-fall rebounds temporarily and then resumes the downtrend.

Chainlink price rebounded by over 14% on Wednesday, reaching its highest level since February 5.

Chainlink (LINK) token rose to a high of $9.35, up by over 30% from its lowest level this month. This rebound has brought its market capitalization to over $6.6 billion.

Top reasons why the LIN price is soaring

Chainlink price rose as the crypto market rally resumed, with Bitcoin and most altcoins being in the green. Bitcoin jumped to $67,000, while the market capitalization of all tokens rose by over 5% to over $2.33 trillion.

LINK token is also benefiting from sustained demand from American investors. Data compiled by SoSoValue shows that spot LINK ETFs have accumulated over $10 million in assets this month, bringing their cumulative total to over $85 million. 

These funds now have over $71 million in assets, with Grayscale’s GLNK having $61 million. Bitwise’s CLNK has $9.75 million in assets. In contrast, spot Bitcoin and Ethereum ETFs have shed billions of assets in the past few months.

Chainlink price is also rising after integrating with Canton, one of the biggest players in the real-world asset tokenization industry. The integration introduces data streams on equities, smart data, proof of reserves, and CCIP.

Other recent integrations in the network are Robinhood, Arc, the layer-1 network built by Circle, World, and MagaEth.

Meanwhile, Chainlink has continued to accumulate LINK tokens as part of its Strategic LINK Reserves. Data shows that these reserves have jumped to over 2.17 million currently worth over $19.7 million. These purchases will continue growing in the coming years as Chainlink plans to use its off-chain fees to accumulate more tokens.

Still, the main risk is that the ongoing Chainlink price rebound is a dead-cat bounce, also known as a bull trap. A bull trap is a situation where an asset in a freefall bounces back and then resumes the downtrend. 

Chainlink price prediction: Technical analysis 

The daily timeframe chart shows that the LINK price has remained in a bear market in the past few months despite its strong fundamentals.

It dropped from a high of $27 to the current $9.4. It has remained below all moving averages and the key support level at $10, which was its lowest level on April 6 last year.

LINK price remains below the 50-day and 100-day Exponential Moving Averages and the Supertrend indicator. Also, it formed a small double-bottom pattern at $8.036 and a neckline at $9.18.

Therefore, the most likely scenario is where it remains under pressure in the coming weeks as risks, including the potential attack on Iran, remain. A complete rebound will be confirmed if it moves above the key resistance level at $10 and flips the short and medium-term moving averages.

Tether, the crypto company behind the world’s largest stablecoin USDT USDT$1.0004, is investing $200 million in online marketplace Whop to boost stablecoin payments.

The deal values the startup at $1.6 billion, Whop CEO Steven Schwartz said in an X post.

Whop runs a digital marketplace where creators sell access to software tools, trading groups, online communities and learning courses. The platform said it has 18.4 million users and that participants earn about $3 billion each year. It’s growing fast, with gross transaction volume increasing about 25% month-over-month, it added.

As part of the deal, Whop will integrate Tether’s crypto wallet tool, allowing users to hold and transact in stablecoins such as Tether’s USDT and U.S.-focused USAT directly on the platform. The integration also gives creators the option to accept digital dollar payments and settle globally without relying on banks or card networks, the press release said.

The funding round is aimed at supporting Whop’s expansion across Latin America, Europe and Asia-Pacific while adding lending and borrowing tools powered by decentralized finance infrastructure.

With the investment, Tether pushes its stablecoins deeper into consumer-facing platforms and everyday online commerce. The company’s flagship stablecoin, the $185 billion USDT token, is a popular tool to access and transact in U.S. dollars in emerging countries.

Across the on-chain securitization landscape, tokenized US Treasuries are gaining traction as a growing liquidity layer for traditional debt markets. The market for tokenized U.S. government securities has climbed by more than $1 billion since the start of 2026, even as macroeconomic headwinds persist and concerns about rising national debt linger. By the time of writing, the total value of tokenized Treasuries hovered around $10.8 billion, up from roughly $8.9 billion on January 1, according to data tracked by RWA.xyz. The move reflects a broader push toward on-chain representations of real-world assets, catalyzed by institutional participation and new infrastructure that aims to streamline on-chain settlement and custody for government debt.

The tokenized US Treasury market is framed as a real-world asset (RWA) on the blockchain, where each token represents a claim on a pro-rata slice of underlying government securities. This model promises faster settlement, programmable features, and easier cross-border access for investors who want exposure to highly liquid, benchmark-grade debt. The growth is not only about the asset class itself; it signals a sea change in how traditional fixed income can be accessed through digital rails. In a space characterized by volatility, the demand for ultra-liquid, widely recognized collateral has brought a new degree of stability to the on-chain finance ecosystem. In parallel, data from Token Terminal shows the market’s ascent accelerating, with the asset class described as having surged 50x since 2024, underscoring the scale of uptake among on-chain market participants.

Notably, the march of tokenized Treasuries has been bolstered by significant, real-world institutional backing. March 2024 marked the debut of BlackRock’s USD Institutional Digital Liquidity Fund, commonly referred to as BUIDL, a vehicle designed to bring high-grade liquidity into the digital-asset domain. As of now, BUIDL has extended its footprint to a market cap exceeding $1.2 billion, illustrating how traditional asset managers are applying digital liquidity concepts to convert cash-like assets into tokenized forms that can reside on-chain while preserving regulatory guardrails and oversight. That development highlights the growing willingness of large asset managers to participate in tokenized markets, even as broader crypto markets faced a downturn in late 2025 and early 2026.

Infrastructure and policy developments have kept pace with these market dynamics. In December 2025, the Depository Trust & Clearing Corporation (DTCC), the leading clearinghouse network for global markets, announced plans to launch an asset-tokenization service beginning with US Treasuries. The initiative, described as a Canton-based effort, aims to tokenize a broad spectrum of assets over time, with the first focus on Treasurys. DTCC’s leadership indicated that the service would eventually extend to exchange-traded funds (ETFs) and equities, signaling a broader push to bring regulated, on-chain settlement and post-trade processing to a wider array of asset classes. The DTCC footprint is substantial: the firm settled hundreds of trillions in value across its networks in 2024, underscoring the potential leverage such a platform could wield in terms of liquidity and risk management for tokenized assets.

Beyond the tokenization service, the macro environment remains a factor shaping demand for tokenized government debt. The tokenized Treasuries narrative has persisted even as the crypto market faced a broad downturn that began in October 2025. Observers point to macro uncertainty, rising US debt levels, and a cautious risk sentiment as a backdrop for the adoption of tokenized RWAs. The World Uncertainty Index, tracked by the Federal Reserve Bank of St. Louis, remained elevated through 2025, signaling a demand for liquid, highly credit-rated collateral that can function as a reliable settlement layer in volatile conditions. In this context, tokenized Treasuries—backed by the same cash-like liquidity that underpins traditional money markets—offer an appealing on-chain alternative for institutions seeking efficient liquidity and programmable exposure with robust risk controls.

Industry participants argue that tokenization could unlock new revenue streams for the networks and platforms that mint these assets. By enabling the on-chain representation of US government debt, the market opens opportunities for liquidity providers, market makers, and custody rails to monetize settlement and settlement-related services in a regulated, tokenized framework. Proponents also point to a broader trend where traditional finance is exploring Layer-2 and sidechain solutions to tokenize trillions in RWAs, a narrative that has gained traction in industry discussions and related reporting. While the pace of adoption may vary by jurisdiction and regulatory posture, the underlying demand for asset-backed tokens with deep liquidity remains palpable, potentially shaping how institutions think about cash equivalents in a digital era.

The Depository Trust and Clearing Corporation to launch US Treasury tokenization service

DTCC’s decision to initiate asset tokenization on the Canton network marks a pivotal step in bridging regulated markets with blockchain-enabled post-trade workflows. The project, announced in December 2025, intends to tokenize US Treasuries first, leveraging the Canton pilot to test settlement, custody, and compliance controls in a tokenized environment. While the immediate focus is Treasuries, DTCC’s leadership has signaled that the platform will broaden to a wider range of asset classes, potentially including ETFs and equities as part of a phased expansion plan. This move aligns with a broader industry push to bring regulated, on-chain settlement capabilities to traditional asset classes, reducing settlement risk and enabling programmable liquidity features for high-quality collateral.

DTCC’s scale and reach—settling trillions in transactions across its networks—underscore the potential for tokenization to affect the entire market infrastructure. The firm’s ecosystem is designed to support complex multi-party processes, and the Canton-based exchange of tokenized assets could similarly improve efficiency, transparency, and risk management for on-chain representations of debt and other financial instruments. As tokenized Treasuries begin to circulate on Canton and related rails, observers will be watching for interoperability standards, custody guarantees, and regulatory alignment that will determine how quickly tokenized assets gain broader adoption across institutions and asset managers.

US Treasuries have long been the backbone of global and corporate finance due to their liquidity and accessibility. With tokenization, the traditional cash-like role of short-dated Treasuries could gain an additional dimension—programmable features, automated redemption and settlement workflows, and potential yield enhancements through structured products built atop tokenized debt. Yet as with any regulatory-adjacent innovation, the path to scale hinges on clear guidance, standardized protocols, and robust risk controls that can reassure both market participants and policymakers alike. Still, the momentum around tokenized RWAs—driven by market data, institutional participation, and infrastructure bets—suggests that the coming years could witness a more visible integration of on-chain representations into mainstream fixed-income trading and settlement.

Why it matters

For investors, tokenized Treasuries offer a familiar, highly liquid exposure channel that can be integrated into digital portfolios with programmable features and potential cost efficiencies in settlement. The on-chain representation of US government debt could enable new liquidity strategies, cross-border access, and more seamless movement of capital between traditional and crypto-native ecosystems.

For networks and platforms, the scale of the market cap growth signals an opportunity to monetize settlement and custody services, while supporting risk-managed access to high-grade collateral. The DTCC’s tokenization initiative illustrates how regulated infrastructure can serve as a bridge between conventional markets and blockchain-based mechanics, potentially driving further adoption across asset classes beyond Treasuries.

From a policy and regulatory perspective, tokenization raises important questions about custody, compliance, and reporting. As more assets move on-chain, regulators will scrutinize how on-chain representations are reconciled with traditional clearing, settlement, and risk-management frameworks. The ongoing collaboration between traditional financial institutions and blockchain-native firms will be essential to establishing algorithms and standards that can sustain growth without compromising resilience.

Summed up, the tokenization of US Treasuries reflects a broader trend toward institutional embrace of RWAs and on-chain settlement. It is a development that could recalibrate the economics of liquidity provision in digital markets while reinforcing the role of trusted incumbents—like DTCC—in shaping the governance and reliability of tokenized asset ecosystems. The narrative remains nuanced: there is clear momentum and significant capital behind this shift, but it will require careful navigation of regulatory landscapes and interoperability challenges to translate early wins into durable, scalable liquidity for tokenized debt.

What to watch next

• Timeline and milestones for DTCC’s Canton-based US Treasuries tokenization rollout, including any regulatory approvals.
• Expansion plans to ETFs and equities on the tokenization platform and the pace of experimentation with additional asset classes.
• Adoption metrics from institutional participants and observable liquidity improvements in tokenized Treasuries.
• Regulatory developments or policy clarifications impacting on-chain RWAs and regulated tokenization structures.

Sources & verification

• RWA.xyz data on tokenized Treasuries and market cap levels (https://app.rwa.xyz/treasuries).
• Token Terminal data indicating a 50x surge since 2024 for tokenized Treasuries (https://x.com/tokenterminal/status/2003096211583311913).
• BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) and its current market position (https://cointelegraph.com/news/blackrock-buidl-3x-1-8-b-3-weeks-bitcoin-lacks-momentum).
• DTCC announcements regarding Canton-network-based asset tokenization and planned expansion (https://cointelegraph.com/news/dtcc-tokenize-us-treasurys-canton-blockchain).
• Federal Reserve Bank of St. Louis’ World Uncertainty Index as a contextual gauge for market sentiment (https://fred.stlouisfed.org/series/WUIGLOBALWEIGHTAVG).

Hi readers,

Welcome to our institutional newsletter, Crypto Long & Short. This week:

• Gregory Mall on how ETFs have shifted a growing share of bitcoin volatility into U.S. equity options markets
• Top headlines institutions should pay attention to by Francisco Rodrigues
• Mid-caps show surprising strength in Chart of the Week

Thanks for joining us!

-Alexandra Levis

Expert Insights

When ETF options start driving bitcoin

– By Gregory Mall, chief investment officer, Lionsoul Global

The launch of U.S. spot bitcoin ETFs marked a structural turning point. The iShares Bitcoin Trust ETF (IBIT) rapidly became one of the fastest-growing ETFs in history, drawing tens of billions into a regulated vehicle. Less discussed, but equally important, is what followed: the rapid expansion of IBIT options.

Over the past year, open interest in IBIT options has climbed into the multi-billion-dollar range. On selected high-volume sessions, activity has approached levels historically associated with Deribit, the cryptocurrency futures and options exchange. A meaningful share of bitcoin’s convexity now sits inside U.S. equity options markets rather than offshore crypto venues.

That shift matters because it changes how volatility is transmitted.

From offshore leverage to onshore gamma

For most of its history, bitcoin BTC$65,121.75 volatility was driven by offshore perpetual futures. Funding imbalances, leverage build-ups and liquidation cascades shaped price action.

ETF options introduce a different mechanism.

When investors buy calls or puts on IBIT, dealers typically sell that optionality and hedge delta exposure. If dealers are short gamma, which is common when investors are net long options, they must buy as price rises and sell as price falls. These hedging flows are inherently procyclical and can amplify underlying moves.

Because IBIT holds physical bitcoin, hedging does not remain confined to the wrapper. Arbitrage and creation and redemption flows transmit ETF positioning into the underlying market. Bitcoin increasingly participates in the same positioning mechanics that influence equity indices.

The structure of ETF options markets, where investors are generally net long optionality, suggests dealers are often warehousing short gamma during periods of elevated demand. This dynamic likely intensified during the February episode, when volatility had been subdued and crypto-native participants accumulated downside puts. Sustained option buying in a low-volatility regime leaves market makers short convexity across both ETF and offshore venues. When spot breaks, hedging flows can reinforce the feedback loop. In the graph below we show the movement of IBIT option volume and BTC U.S.-hours realized volatility. We can see that the relationship has strengthened over the past weeks.

Chart 1 illustrates the co-movement between IBIT option volume and BTC U.S.-hours realized volatility, showing that their relationship has strengthened in recent weeks. To formally evaluate this relationship, we regress bitcoin realized volatility on lagged IBIT options volume while controlling for BTC funding rates, equity returns (Nasdaq Composite), implied volatility (CBOE Volatility Index, or VIX), short-term interest rate changes and U.S. dollar movements. The results indicate that IBIT options trading activity is significantly associated with BTC volatility even after accounting for broader macroeconomic conditions.

Chart 1: Movement of IBIT option volume and BTC U.S.-hours realized volatility

Table 1: OLS regression IBIT options volume on BTC volatility

Table 2: BTC volatility distribution pre and post IBIT Options

We split the data into before vs. after IBIT options began trading. For each hour of the day (UTC), we measure how much bitcoin’s price moved in that hour. Then we convert it into a share of the day’s total volatility — so each column adds up to 100%. The highlighted band (14:00-16:00 UTC) lines up with peak U.S. trading activity, especially the U.S. cash equity open. After, IBIT options volatility becomes more concentrated in these U.S. hours — suggesting more price discovery and hedging flow is happening when U.S. markets are most active.

February as illustration

The early February selloff provides a useful example. Bitcoin fell sharply during one of the most extreme cross-asset deleveraging episodes in recent years. Yet IBIT recorded net creations rather than redemptions, which argues against retail panic.

In a thoughtful Substack post, Jeff Park suggested the catalyst was cross-asset positioning amidst some of the big multistrategy funds rather than crypto-specific stress. Correlations between bitcoin and high-beta software equities tightened materially, indicating multi-asset portfolios were being indiscriminately de-risked.

At the same time, the CME bitcoin basis widened dramatically. Near-dated basis moved from roughly three percent to close to nine percent. Such a move is consistent with multi-strategy funds unwinding delta-neutral basis trades by selling spot or ETFs and buying futures under gross exposure constraints.

As prices declined into that environment, existing short-gamma positioning may have amplified the downside through mechanical delta-hedging. Dealers’ short convexity must sell into weakness. The sharp rebound that followed on Friday the 6th is consistent with hedges being rebalanced once acute pressure subsided.

The episode illustrates a broader point. Bitcoin now participates in the same balance sheet and derivatives mechanics that govern equities and other risk assets.

Digital gold, or leveraged Nasdaq?

This evolution complicates the “digital gold” narrative. Bitcoin’s correlation with gold has historically been unstable and often close to zero over shorter horizons. BlackRock’s Head of Digital Assets, Robert Mitchnick, has argued that heavy speculative positioning can cause bitcoin to behave more like a leveraged Nasdaq proxy than a macro hedge. This observation is directionally correct. In Chart 3 we are showing that the BTC-Nasdaq correlation during U.S. trading sessions approximately doubled since inception of IBIT options. Increasingly, however, it is not only speculative longs that matter. Delta-neutral strategies and derivatives positioning inside traditional markets now contribute to volatility feedback loops.

Chart 2: Bitcoin’s correlation with Nasdaq pre- and post IBIT options

Bitcoin began outside the financial system. The success of IBIT and IBIT options shows it is now embedded within it. For long-term allocators, this does not invalidate the structural case for digital scarcity. It does mean that short-term price action is increasingly shaped by positioning, hedging and cross-asset flows.

Bitcoin is no longer trading outside the system. It is trading inside it.

The information contained herein is provided for informational and educational purposes only and should not be construed as investment, legal, or tax advice. Nothing contained in this document constitutes an offer to sell, or a solicitation of an offer to buy, any securities, investment products, or advisory services.

Lionsoul Global Advisors LLC is registered with the Texas State Securities Board (CRD #: 324883). The advisory services provided by Lionsoul Global Advisors are available exclusively to non-U.S. investors who meet applicable eligibility, accreditation, and qualification standards under relevant laws and regulations.

Headlines of the Week

– By Francisco Rodrigues

Trump’s Mar-a-Lago crypto summit would’ve been unthinkable just a few years ago. Now we’re not only getting that, but also a $17 billion trading volume debut of a crypto-linked ETF and more in a single week.

• Goldman Sachs, Franklin Templeton, and Nicki Minaj: Inside Trump’s surreal Mar-a-Lago crypto summit: The World Liberty Financial form at Mar-a-Lago included figures from traditional finance, crypto and real estate in an intimate setting, with panels touching on crypto and the future of tokenized real estate.
• To freeze or not to freeze: Satoshi and the $440 billion in bitcoin threatened by quantum computing: Quantum computing is slowly moving closer to reality, and as it does, nearly 7 million bitcoin could potentially be at risk. That includes Satoshi Nakamoto’s estimated 1 million BTC.
• ProShares’ stablecoin-ready ETF sees $17 billion debut, sparking speculation about Circle: ProShares’ IQMM money market ETF, designed to comply with U.S. stablecoin reserve requirement under the GENIUS Act, saw $17 billion in first-day trading. That sparked speculation that stablecoin issuers could be moving funds.
• Bitcoin balances on Binance hit highest since November 2024 – here’s what it means: Users’ bitcoin holdings in Binance-linked wallets are at their highest level since late 2024, which could have bearish implications on an already depressed market.
• Specialized AI detects 92% of real-world DeFi exploits: Purpose-built AI could detect vulnerabilities in 92% of 90 exploited decentralized finance (DeFi) contracts, accelerating concerns over offensive AI capabilities.

Chart of the Week

Mid-caps show surprising strength as large caps lag bitcoin

While Bitcoin is down 27.7% YTD and large-cap indices like the CD5 and CD20 are underperforming it (down 30% and 32% respectively), the CD80 is showing resilience with a shallower drawdown of only 20.91%. This represents a 7% relative outperformance against Bitcoin, a reversal of the typical “risk-off” dynamic where smaller assets crash harder than the lead. This strength suggests a “seller exhaustion” phase for mid-caps, where the heavy weightings of idiosyncratic performers like Hyperliquid (HYPE) and Canton Coin (CC) are decoupling from the broader institutional sell-off seen in large-caps.

Listen. Read. Watch. Engage.

Looking for more? Receive the latest crypto news from coindesk.com and explore our robust Data & Indices offerings by visiting coindesk.com/institutions.