Bitcoin BTC$64,076.23 scored a rare achievement on Monday by outperforming the S&P 500.

The largest cryptocurrency rose 2.6% to over $64,000, registering its best daily performance in over a month, according to CoinDesk data. Wall Street’s benchmark equity index, S&P 500, fell by 0.52%.

Bitcoin, therefore, not only outpaced equities but moved in the totally opposite direction. This was once a norm. Bitcoin has spent most of its history being the higher-beta asset relative to stocks, meaning it typically moves more than stocks in both directions.

“BTC outperformed the stock market today. This has become a less common occurrence lately. 1/2 In fact, BTC only outperformed the S&P 500 on around one third of trading days over the last three months,” blockchain analytics firm Glassnode said in a Telegram chat.

Underperforming two-thirds of the time means BTC has been acting less like a higher-beta asset relative to stocks and more like a laggard. Key reasons for that include the AI stock frenzy on Wall Street that has sucked out capital from other corners of the financial market, including cryptocurrencies.

The bear market phase of bitcoin’s self-fulfilling four‑year cycle has also played a role in keeping demand for BTC subdued. BTC peaked above $126,000 in October last year and quickly entered the bear market, which is expected to bottom out by October this year.

Bitcoin (BTC) short liquidations hit their highest in almost one month as it hit $64,500 on Monday, new data reveals.

Key points:

• Bitcoin passed $64,000 thanks to a short squeeze on derivatives markets, CryptoQuant says.
• An ongoing downward funding-rate reset from 0.006% to 0.003% over 24 hours could mean further short squeezes.
• The absence of spot demand raises doubts whether the upside is sustainable after a week of $267.2 million in net ETF outflows.

Bitcoin short liquidations near one-month high 

BTC/USD rallied after Sunday’s weekly close, gaining up to 3% on Monday to top out at one-week highs of $64,550 on Bitstamp. 

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

Examining the impetus behind the latest BTC price gains, onchain analytics platform CryptoQuant pointed to illiquid markets and funding-rate imbalances among exchanges.

Before rebounding on Monday, BTC circled near $62,750. Around this level, funding rates between exchanges began to diverge. Shorts were dominant on major platforms such as Binance, Bybit, OKX and Deribit, while the funding rate on HTX briefly spiked to 0.05%.

Funding rates refer to periodic payments exchanged by long and short traders on Bitcoin derivatives markets in order to maintain their positions. Positive aggregate funding rates show that long traders are actively paying shorts, with the reverse true for negative funding rates.

“This crowded short positioning served as the primary catalyst, fueling a short squeeze that drove prices higher,” CryptoQuant continued.

BTC/USD one-hour chart with exchange funding-rate data (screenshot). Source: CryptoQuant

Data puts total Bitcoin short liquidations at 637 BTC for Monday, the largest single-day tally since July 21.

Describing the event as a “low-volume liquidity trap,” CryptoQuant nonetheless suggested that the market could see more short squeezes next, with funding rates already declining again as traders increase short exposure.

Bitcoin short liquidations. Source: CryptoQuant

Crucial spot demand remains absent

Previously, Cointelegraph reported that Bitcoin futures markets accounted for the majority of trading volume in the current range, with spot traders broadly uninterested. 

Related: BTC price loses 200-week trend line as 2022 repeats: Five things to know in Bitcoin this week

In further analysis on Monday, CryptoQuant called the lack of spot demand the primary hurdle to sustained upside, alongside the lack of inflows to the US spot Bitcoin exchange-traded funds (ETFs).

“A break below $60K alongside rising exchange inflows would weaken the structure and increase downside risk toward $50K. Selling pressure is cooling, but demand still needs to return,” it commented.

Recent buyers who remain underwater on their BTC allocation have helped cement the current trading range. Short-term holders — wallets holding a UTXO for less than 155 days — have their cost basis at around $68,700, reinforcing that level as resistance.

HTX said on Aug. 18 that it is investigating small cryptocurrency transfers received by several addresses after community members attributed the deposits to the exchange.

The exchange said its initial internal review found that its official channels had not initiated the transfers or conducted related testing. HTX is now examining the origin of the transactions and whether blockchain address labels or attribution methods produced a misleading connection.

Some users have described the transactions as “address poisoning.” Others reportedly said their accounts faced restrictions after receiving the funds. Neither description has been independently confirmed through transaction records, platform notices or findings from a blockchain security company.

HTX says it did not initiate the disputed transfers

HTX responded after community members circulated screenshots of small deposits that appeared to come from exchange linked addresses. One user reportedly received 7.5 USDT in a Coinbase account before being asked to explain the source of the funds, according to a report.

A request for information does not necessarily mean an account has been frozen. Coinbase has not publicly addressed the reported case, and no affected user has published a complete platform notice showing a permanent restriction linked to the transfer.

HTX said it had “not conducted any related transfers or testing activities.” The exchange added that it would not speculate before completing its investigation. It promised to provide the community with confirmed information, although it did not set a deadline.

The statement did not identify the blockchain involved, the sending addresses or the transaction hashes. It also did not disclose how many recipients had reported deposits or whether any customer assets were at risk.

Small deposits do not prove address poisoning

Address poisoning normally involves an attacker creating an address that resembles one previously used by a target. The attacker then sends a small or zero value transaction so that the lookalike address appears in the target’s transaction history.

The attacker hopes the user will later copy the planted address without checking every character. Chainalysis describes this transaction history manipulation in its security guide.

Small unsolicited transfers alone do not establish address poisoning. Investigators would need to determine whether the sender resembles a trusted counterparty and whether the transaction was intended to manipulate a recipient’s address history.

The current reports contain no verified evidence that recipients later sent assets to lookalike addresses. No losses have been confirmed. No security researcher has publicly connected the disputed transfers to a specific operator.

As previously reported, a user recently lost 100,000 USDT after copying a planted lookalike address from their transaction history. That case included a confirmed misdirected payment, unlike the activity HTX is investigating.

Wallet labels may explain the apparent HTX connection

Blockchain transactions identify addresses, but they do not automatically identify the legal entity controlling each address. Explorers and analytics companies assign labels using disclosed ownership information, transaction patterns and address clustering.

Those methods can produce useful leads, but a displayed label is not conclusive proof that the named exchange authorized a transfer. Deposit addresses, consolidation wallets, payment processors and intermediary services can further complicate attribution.

HTX said its investigation would consider “address tagging” and the identification of onchain transfer sources. This leaves open the possibility that third party services attributed a sender to HTX incorrectly or without enough supporting evidence.

The exchange previously published a scam warning about unsolicited 0.001 USDT transfers. It advised users to inspect complete wallet addresses instead of relying on shortened address displays or transaction histories.

The present case also arrives amid wider concerns about automated compliance screening. In related coverage, users reported blocked transactions and frozen funds after compliance services flagged exposure to HTX linked addresses. Those earlier restrictions involved sanctions screening and do not prove a connection to the latest deposits.

Account freeze reports require further evidence

Claims that some accounts were “frozen” remain unverified. No exchange has confirmed imposing restrictions because of the disputed transfers, and the available reports do not provide case numbers, notices or affected wallet addresses.

A platform may request information when an automated monitoring system detects an unfamiliar counterparty or a link to a flagged address. Such a review can delay access without proving misconduct by the recipient or the sending address.

The distinction matters because describing every compliance check as a freeze could overstate the event. It could also wrongly suggest that HTX users conducted a coordinated poisoning campaign when neither HTX nor an independent investigator has reached that conclusion.

HTX’s investigation will need to identify the sending addresses, establish who controlled them and explain why they made the transfers. Publishing transaction hashes would allow independent analysts to test the exchange attribution and search for lookalike address patterns.

Until then, users should avoid copying destination addresses from transaction histories. They should verify the full address, use saved address books where available and preserve transaction hashes or account notices for support teams. Interacting with an unsolicited token or unfamiliar contract may introduce separate security risks.

HTX said it would share further findings once confirmed. The exchange has not announced when the review will end or whether it plans to publish a technical report.

BitBox, the Swiss hardware-wallet provider, has released a firmware update aimed at correcting two security vulnerabilities it characterized as “severe.” According to a security disclosure published on Monday, the patches address issues that could theoretically allow a malicious host to interfere with device behavior and, in one case, affect how Bitcoin is routed during Silent Payments.

Key takeaways

• BitBox says its new firmware fixes a “severe” memory corruption issue affecting Multi editions of BitBox02 and BitBox02 Nova when the device has no wallet configured.
• The company also patched a “severe” weakness in its Silent Payments implementation that could potentially cause Bitcoin to be locked to an unintended address.
• BitBox reported receiving no claims that either vulnerability has been exploited in the wild or caused user losses.
• The update arrives amid heightened scrutiny of hardware-wallet supply chains and device security after high-profile wallet-related incidents.

What BitBox says the firmware update changes

In its disclosure, BitBox describes one vulnerability as a form of memory corruption involving Multi editions of BitBox02 and BitBox02 Nova. The issue is tied to scenarios where the device has not been configured with a wallet, meaning it’s in a state where it could be more vulnerable to abnormal interactions.

BitBox warns that a malicious host could exploit the flaw to execute arbitrary code and potentially install malicious firmware. If such an attack succeeded, it could compromise the device’s ability to protect user funds. As part of its disclosure, the company states it has not received reports indicating the vulnerability has been used to harm users.

Silent Payments patch: risk of unintended locking

The second vulnerability affects BitBox’s Silent Payments feature. BitBox says that while the flaw would not directly enable theft, it could allow a malicious host to lock Bitcoin to an address chosen by the attacker rather than the intended recipient.

In practical terms, BitBox frames the threat as leverage instead of direct extraction: an attacker could potentially demand a ransom to cooperate with restoring access to the coins. BitBox also says it has not seen reports of this issue being exploited or leading to lost funds.

Why the timing matters for self-custody security

BitBox’s firmware release lands at a moment when the hardware-wallet ecosystem is being tested on multiple fronts: device firmware integrity, secure generation of wallet data, and even the protection of customer and order information around wallet products.

Earlier coverage tied a Coldcard hardware-wallet issue to a March 2021 firmware change that remained undetected for more than five years. That vulnerability reportedly affected wallet-seed randomness, enabling attackers to brute-force impacted wallet seeds and derive private keys without physical access. Galaxy Research said last Friday that Coldcard-related losses had exceeded $112 million, with about 1,778.6 BTC reportedly swept from more than 8,600 addresses. (The earlier analysis is described in Cointelegraph’s reporting: Coldcard’s 5-year flaw reveals hardware-wallet testing gap.)

Beyond device bugs, separate incidents also drew attention to the broader risk surface of hardware-wallet businesses. Cointelegraph previously reported data breaches involving Trezor and SafePal that exposed customer and order information for more than 53,000 people. Those cases did not compromise device security, private keys, or recovery phrases. Instead, they raised concerns about targeted phishing and impersonation attempts—risks that can be especially dangerous for users who can be tricked into handing over seed material or signing approvals.

What users should watch after installing updates

Hardware-wallet vulnerabilities are not always limited to “theft bugs.” As BitBox’s disclosure shows, threats can also emerge from interaction patterns—such as how a device behaves before a wallet is configured—or from optional features like Silent Payments, where errors can affect the destination of funds rather than enabling immediate draining.

For BitBox users, the key next step is straightforward: install the firmware update and confirm the device is operating under the latest version recommended by the vendor. Readers may also want to review their operational habits around Silent Payments usage and ensure they are comfortable with how their wallet constructs and verifies outputs before signing.

More broadly, the pattern across recent incidents suggests that self-custody security depends on a full chain—not only the cryptography inside the hardware, but also firmware correctness, feature-specific logic, and the surrounding processes that keep customer interactions from becoming an entry point for social engineering.

With BitBox now shipping a fix and reporting no known exploitation, the remaining question for the market is whether broader scanning and third-party auditing will surface additional edge-case weaknesses in similar workflows across other devices and features. Users should treat firmware updates as an ongoing part of operational security, not a one-time task.

The Digital Asset Market Clarity Act was not supposed to fail. It had bipartisan committee support, a White House willing to sign, and an industry that spent over $100 million lobbying for it. Six months ago prediction markets gave it better than four in five odds. The collapse from 82% to under 20% is not the story of a bill that lacked support. It is the story of a bill that could not survive the collision between three constituencies whose demands were mutually exclusive, on a calendar that left no room for compromise.

This piece traces the three disputes that stalled the bill, examines why the Senate calendar makes September passage unlikely, and maps what happens to the industry if the CLARITY Act dies in 2026.

The February consensus and how it unraveled

The CLARITY Act emerged from the Senate Banking Committee in January 2026 with a 15 to 9 vote. Two Democrats crossed over to support it. The bill ran 309 pages and attempted to do what no previous legislation had accomplished: draw a permanent line between the SEC and CFTC’s jurisdiction over digital assets, define when a token stops being a security and starts being a commodity, and create registration pathways for exchanges, brokers and custodians.

Polymarket reflected the optimism. Traders priced passage at 82% in February. Galaxy Digital’s research team put it at 75%. The logic was straightforward: Republicans had the votes, the White House had signaled it would sign, and the industry had spent aggressively to ensure floor time.

The first crack appeared in April when Senate negotiations stalled over three open items that the committee had deferred to floor debate: stablecoin yield rules, DeFi protocol classification, and ethics provisions for government officials with crypto holdings. Each of these disputes had a constituency with enough leverage to block the bill.

The stablecoin yield fight

The current draft of the CLARITY Act prohibits interest or yield on idle stablecoin balances while permitting activity based rewards through DeFi mechanisms such as liquidity pools and lending protocols. The distinction matters because it determines whether centralized exchanges can continue paying customers to hold stablecoins.

Coinbase earns approximately $1.35 billion annually from USDC rewards, a program that pays customers yield for holding Circle’s stablecoin on the platform. Under the proposed framework, that revenue model would be restricted. Coinbase has lobbied intensely to modify the provision, arguing that prohibiting yield on idle balances while permitting it through DeFi creates an arbitrary distinction that pushes activity toward less regulated protocols.

The banking lobby wants the prohibition to stand. Traditional banks view stablecoin yield as a deposit product offered without deposit insurance, capital requirements or FDIC oversight. Allowing exchanges to pay yield on stablecoins while banks must comply with Basel III capital rules creates a competitive asymmetry that the banking industry will not accept quietly.

The compromise that the committee deferred, permitting yield only through regulated DeFi mechanisms, satisfies neither side. Coinbase loses its largest revenue stream. Banks still face competition from protocols that are harder to regulate. The provision has consumed more negotiating time than any other section of the bill.

The DeFi classification problem

The CLARITY Act attempts to define when a blockchain network is sufficiently decentralized that its tokens are no longer securities. The bill creates a framework under which the SEC would evaluate whether essential managerial efforts have ceased, using criteria including the distribution of governance tokens, the absence of a controlling entity, and the degree to which protocol upgrades require community consensus rather than unilateral developer action.

Democrats on the committee argued the criteria are too permissive. Senator Sherrod Brown’s staff circulated a memo in May contending that under the proposed standards, FTX’s FTT token would have qualified for commodity treatment within 18 months of launch, despite Sam Bankman-Fried’s centralized control of the exchange. The memo was disputed by the bill’s sponsors, but it reframed the debate: any standard that could retroactively validate FTT is a standard that will face political resistance.

The deeper issue is that decentralization exists on a spectrum, and the bill needs a binary threshold. A protocol is either sufficiently decentralized or it is not. Drawing that line through legislation means choosing a point on the spectrum that will be wrong for some projects on either side. The committee chose to defer the final calibration to floor debate, and floor debate has not happened.

The Trump problem

The most politically toxic dispute has nothing to do with technology. President Trump’s 2025 financial disclosure showed approximately $1.4 billion in crypto related income: $799 million from World Liberty Financial and $635 million from the TRUMP memecoin. Democrats have demanded enforceable divestiture or blind trust requirements for senior officials as a condition for supporting cloture.

The ethics provision in the current draft falls short of what Democrats want. It prohibits federal officials from issuing digital assets but does not require divestiture of existing holdings. Senator Elizabeth Warren called the provision inadequate, arguing that it allows the president to profit from the regulatory clarity the bill provides while the bill is being debated.

Minting a dollar on a blockchain is no longer a competitive advantage. The technology is understood. The reserve structures are standardized. The regulatory frameworks, at least in jurisdictions that have them, define what a compliant stablecoin looks like. What remains scarce is the infrastructure that moves those tokens from issuer to merchant to consumer and back, the distribution layer that determines whether a stablecoin is used or merely exists.

Three events in the past eight weeks mark the transition from an issuer market to a distribution market. Open USD assembled 140 of the largest companies in payments, banking and technology into a consortium designed to control distribution collectively. HKDAP launched through a B2B2C model that treats distribution partners, not end users, as its primary customers. And World Liberty Financial obtained a bank charter that lets it vertically integrate issuance and custody under a single entity with direct regulatory approval.

Each of these moves is a bet on the same thesis: the stablecoin that wins is not the one with the best peg or the largest reserves, but the one embedded most deeply in the payment flows that people and businesses already use.

The market that Open USD enters

The stablecoin market in mid 2026 is a duopoly with challengers. Tether’s USDT holds approximately $187 billion in circulation, roughly 59% of the total market. Circle’s USDC follows at $75 billion, about 24%. Together they control 83% of all stablecoin supply. The remaining 17% is fragmented across dozens of issuers including PayPal’s PYUSD, First Digital’s FDUSD, Ethena’s USDe and now USD1.

The duopoly has survived despite regulatory pressure on Tether, Circle’s declining market share from 34.88% to 23.05% over the past two years, and repeated predictions that bank issued stablecoins would displace crypto native issuers. The reason is distribution. USDT is embedded in every major exchange, every DeFi protocol and the majority of over the counter trading desks globally. Replacing it requires not just a better token but a better network of places where that token can be used.

Open USD’s approach is to build that network before launching the token. The consortium model means that when OUSD launches on merchant rails, Visa, Mastercard, Stripe, Shopify and Google are already participants. A merchant using Stripe does not need to integrate a new stablecoin. Stripe makes OUSD the default. A consumer paying through Google Pay does not choose a stablecoin. The system chooses for them.

The business model is also different. Open Standard, the entity governing OUSD, distributes reserve earnings to its 140 plus partners minus a management fee. Circle keeps USDC’s reserve yield. Tether keeps USDT’s reserve yield. Open USD shares it with the distribution network. The incentive alignment is designed to make partners actively promote OUSD over competitors because their revenue depends on its adoption.

The scale of the revenue at stake is significant. At current US Treasury yields, a $10 billion stablecoin generates roughly $400 million annually in reserve income. Circle reported $1.7 billion in revenue from USDC reserves in 2025. Under the Open USD model, that revenue would be distributed across 140 partners. Even a small share of a growing reserve pool creates a recurring revenue stream that locks partners into the ecosystem.

The governance structure is also distinct. Open Standard’s board is composed of partner businesses, not a single corporate issuer. Decisions about which blockchains to support, which jurisdictions to enter, and how to structure reserve management are made collectively. This removes the single point of failure that exists with issuer controlled stablecoins, where one company’s regulatory problems or management failures can destabilize the entire token. It also slows decision making, which is the tradeoff of consensus governance in a market that moves quickly.

The consortium model has precedent outside stablecoins. Visa itself started as a consortium of banks that collectively governed a payment network. Mastercard followed the same structure before both eventually converted to publicly traded companies. The parallel is not exact, but the principle is the same: a payment network controlled by its participants rather than a single operator can achieve broader adoption because every participant has a stake in the network’s success.

HKDAP and the B2B2C model

Standard Chartered, Animoca Brands and HKT took a different approach with HKDAP, the Hong Kong dollar backed stablecoin issued by their joint venture Anchorpoint Financial. Rather than building a consumer brand, Anchorpoint treats distributors as its primary customers.

HashKey Exchange and OSL Group are authorized distributors, meaning they handle the customer relationship while Anchorpoint handles issuance, reserve management and regulatory compliance. The model separates the functions that most stablecoin issuers combine: minting and distribution become distinct businesses operated by different entities.

The initial use cases are institutional: payments, settlement and tokenized real world asset circulation. HashKey and YF Life have already tested HKDAP for insurance premium payments, converting a traditionally slow bank transfer process into a near instant stablecoin settlement. Retail expansion is planned for late 2026.

HKDAP operates under the Hong Kong Monetary Authority’s Stablecoins Ordinance, which requires 1:1 backing with high quality HKD assets held in segregated accounts. The licence is one of the first two issued under the new framework, giving Anchorpoint a regulatory first mover advantage in Asia’s most important financial hub.

The B2B2C model has implications for how stablecoin competition evolves. If the winning strategy is distribution rather than issuance, then the most valuable position is not being the issuer but being the distributor with the largest customer base. HashKey’s role in HKDAP is more analogous to a retail bank distributing Treasury bonds than to a crypto exchange listing a new token. The distributor captures the customer relationship while the issuer becomes a wholesale provider of a commodity product.

World Liberty Financial and vertical integration

World Liberty Financial’s conditional OCC charter represents a third model: vertical integration. Rather than building a consortium or a distributor network, the Trump linked venture is collapsing issuance, custody and banking into a single entity.

The charter allows World Liberty Trust Company to provide digital asset custody services, take over issuance of USD1 from BitGo Bank and Trust, and offer conversion services allowing customers to exchange approved stablecoins for USD1. It does not extend to depository services, meaning World Liberty Trust cannot accept deposits in the traditional banking sense.

USD1 has grown to approximately $4 billion in market capitalization since its announcement in March 2025, making it the fourth largest stablecoin. The growth has been driven in part by DeFi integrations and in part by the political profile of its founders. Whether the growth is sustainable without the charter, and whether the charter survives political scrutiny, are open questions.