Tether stablecoin USDt has become the second-largest cryptocurrency by market capitalization as Ether fell to its lowest price of the year on Friday

Ether’s market capitalization dropped below $185 billion following a 5.2% price crash over 24 hours, sending the asset tumbling to $1,510 on Coinbase, according to TradingView. This allowed USDt, with a $186 billion market capitalization, to surpass the cryptocurrency. 

“[The] stablecoin overtake really highlights how the market still favors stability over ETH’s volatility right now,” Andri Fauzan Adziima, research lead at Bitrue Research Institute, told Cointelegraph. 

The development reflects accelerating stablecoin growth, which currently represents almost 15% of the entire crypto market capitalization. Stablecoin supply contracted more than 30% in the last bear market, but they’re hitting record highs this time, wrote 21Shares on Thursday, adding:

“To us, that is the strongest evidence yet that stablecoins are one of crypto’s defining use cases – demand that no longer depends on the cycle.”

USDt flipped ETH in market capitalization. Source: CoinGecko

Alvin Kan, chief operating officer of Bitget Wallet, told Cointelegraph that the flip is a “notable milestone that highlights the explosive growth and dominance of stablecoins in today’s crypto ecosystem.”

“It demonstrates strong demand for reliable, liquid on- and off-ramps during periods of volatility, while serving as a reminder that ETH must continue delivering compelling utility and narrative momentum to maintain its position.” 

Kan said the development is positive for the broader market, as deeper stablecoin liquidity supports higher trading volumes and ecosystem innovation.

Related: Sharplink buys ETH after 8-month pause as token hits 2026 low

ETH prices are back at crucial support levels last visited in October 2023 and April 2025.

The Ethereum ecosystem has also faced internal changes recently, following several executive departures and a 20% workforce reduction at the Ethereum Foundation.

However, a new nonprofit organization called Ethlabs was launched this week by key EF developers and researchers and backed by Ether treasuries Bitmine and Sharplink. 

ETH prices are at a critical long-term support level. Source: TradingView

Not all are bearish  

Some have taken Ether’s decline as an opportunity.

Ether treasury company Sharplink bought the dip, making its first purchase in eight months, scooping up 5,000 ETH on Thursday. Bitmine, chaired by Tom Lee, has also been accumulating at these low prices, adding a further 76,881 ETH last week. 

Meanwhile, Circle’s USDC (USDC) also flipped Ripple’s XRP (XRP) in market capitalization as XRP fell back towards $1, its lowest level since November 2024, leaving XRP with a market capitalization of $64 billion compared with USDC’s $73.6 billion.

Magazine: AI is banking the unbanked in Africa… faster than crypto

TLDR

• Proof launched x401, an open protocol that verifies the human authority behind AI agent actions online.
• x401 pairs with x402 to cover the two core questions in agentic transactions: identity and payment.
• Proof Digital ID uses zero-knowledge proofs, letting users verify claims without exposing full identity.
• Proof will submit x401 to the FIDO Alliance’s agentic authentication standards workgroup for adoption.

Proof, an identity authorization company, has launched x401, an open protocol designed to verify the human authority behind AI agents.

As agents increasingly handle payments, contracts, and content publishing, the missing piece has been proof of who authorized them.

The x401 protocol addresses that gap directly, giving any website or API a standard way to request and verify identity credentials before permitting agent actions.

x401 Builds a Trust Layer for the Agentic Economy

The x401 protocol works by allowing services to request specific identity claims from an agent. These claims can include verified identity, age, organizational affiliation, or signing authority.

The agent then presents a compatible credential, and the service verifies the issuer, claim scope, and action before proceeding. This two-step process binds identity to authorization in a single verifiable proof.

Proof founder and CEO Pat Kinsel explained the broader shift driving the protocol’s creation. “AI is making actions and content effortless to generate,” Kinsel said.

“Trust will come from knowing who stands behind them.” He added that x401 gives every service a common way to ask for proof, while Proof Digital ID gives people and organizations a high-assurance way to answer.

The protocol is issuer-neutral by design. Any conforming issuer can deliver x401-compatible credentials, and every service decides independently which claims, issuers, and assurance levels it will accept. This approach avoids locking the internet into a single identity provider model.

Proof plans to submit x401 to the FIDO Alliance’s agentic authentication standards workgroup for broader industry adoption.

Proof’s Digital ID Delivers the First Live x401 Implementation

Proof is also releasing its own Digital ID product, the first live implementation capable of satisfying an x401 challenge.

It is built on Verifiable Credentials and supports the OID4VC Issuance and Presentation standard inline. Users can verify their identity to an IAL2 standard and re-authenticate with biometrics at any point.

Circle, one of the protocol’s co-endorsers, connected x401 to the existing x402 payment standard. Circle VP of Product Gagan Mac stated that “x402 answers how an agent pays, x401 answers who it is.”

Mac noted those are the first two questions any agentic transaction must clear, and both now have open standards.

The platform uses selective disclosure and zero-knowledge proofs. This means a person can prove nationality, age threshold, or organizational authority without exposing their full identity record. Developers request the identity claim, and Proof handles enrollment and verification behind the scenes.

Proof’s Digital ID also supports transaction signing. The API cryptographically binds a verified identity to payments, authorizations, or any signed payload.

These records serve as verifiable evidence of who authorized what, which many regulated industries now require. Full documentation is available at x401.id, with developer resources at dev.proof.com.

TLDR:

• Strategy’s annual STRC dividend bill surged from $300M in January to roughly $1.2B today.
• Cash reserves have dropped 38% since early 2026, cutting dividend runway to just ten months.
• Strategy sold Bitcoin directly for the first time, exposing limits on its two core funding tools.
• Outstanding STRC obligations near $10B rank above MSTR shares in repayment priority order.

Strategy feedback loop risks are drawing attention as Michael Saylor’s Bitcoin treasury firm shows signs of structural strain.

The preferred stock instrument STRC was engineered to trade near $100, with Bitcoin purchases pausing automatically when it falls below that level.

That mechanism, once seen as a safeguard, has begun cracking under the weight of rising dividend obligations, shrinking cash reserves, and a declining Bitcoin price.

The Mechanism That Was Supposed to Hold Is Breaking Down

STRC’s design rested on a simple premise: keep the stock near $100, and the entire system stays balanced. Above that level, Strategy buys Bitcoin.

Below it, the company pauses purchases and rebuilds cash instead. For months, that framework held. Then May arrived, and the cushion disappeared.

Strategy spent $1.5 billion in cash to repurchase convertible notes due in 2029. That cash was the reserve investors relied on to trust that STRC’s dividend payments would continue. Once it was gone, confidence in the preferred stock began to slip, and the numbers moved quickly after that.

The annual dividend bill jumped from roughly $300 million in January to approximately $1.2 billion today. Cash reserves have fallen 38% since the start of 2026.

Dividend coverage, which once offered nearly three years of runway, has now compressed to around ten months.

Faced with that gap, Strategy took a step it had never taken before. It sold Bitcoin directly to refill cash. The sale was small, but it still moved Bitcoin’s price.

That single test revealed something the market had not fully confronted: Strategy cannot sell meaningful amounts of Bitcoin without damaging the very asset its entire model depends on.

Once the Loop Starts, Every Move Makes It Worse

@BullTheoryio captured the bind directly: “STRC trading below $100 forces Strategy to raise the dividend yield to pull it back toward par. A higher yield means a bigger annual cash bill. That bigger bill forces more selling of MSTR or Bitcoin to cover it.”

That selling then pushes both MSTR and Bitcoin lower. Lower prices drive STRC further from its $100 peg. A wider gap demands an even higher yield to attract investors back. The cycle then repeats, each rotation tightening the pressure further than the last.

What makes this especially consequential is the repayment structure sitting underneath it all. STRC is preferred stock, which ranks above MSTR in priority.

If Strategy ever had to unwind STRC entirely, preferred holders get repaid in full before MSTR shareholders see a single dollar. Outstanding STRC obligations stand at roughly $10 billion.

As of now, MSTR has fallen below $100 for the first time since March 2024, Bitcoin has dropped below $60,000, and Strategy’s stock sale program has been paused.

Analysts estimate the company needs approximately $2.4 billion in reserves just to restore 24 months of dividend coverage.

The market is not pricing in an immediate collapse. It is pricing in a company whose two main funding tools are both constrained at the same time.

Spain’s markets regulator has drawn a hard line on the timing of the EU’s Markets in Crypto-Assets (MiCA) licensing requirements, signaling that crypto firms which have not secured authorization by the deadline will not receive extensions.

According to a Friday Reuters report, the chair of Spain’s National Securities Market Commission (CNMV), Carlos San Basilio, said there will be “no exceptions or extensions” to the July 1 MiCA deadline for companies that have not received approval to operate in European Union member states. The warning is aimed at major exchanges including Binance.

Key takeaways

• Spain’s CNMV chair says MiCA’s July 1 deadline will not be extended for unlicensed crypto firms.
• Reuters reports that Binance had not received EU regulator approval as of Friday, after its Greece license application was withdrawn.
• If approval is not granted soon, Binance may need to stop onboarding new EU users and restrict services for EU accounts from July 1.
• Other exchanges have reportedly secured last-minute MiCA authorizations, potentially reducing but not eliminating market disruption.

MiCA deadline without waivers

MiCA’s phased implementation has been a central question for Europe’s crypto industry: whether firms would be given additional time to meet licensing conditions if regulators required extra steps or review. Reuters’ report indicates Spain’s position is unequivocal.

San Basilio said the key concern is how the end of the transitional period will unfold and how regulated firms and regulators will manage the “adaptation to the new environment.” Reuters adds that the CNMV chair stated the agency is in contact with organizations that have not been granted a licence.

What happens if Binance isn’t licensed

Binance’s EU status has been under scrutiny as MiCA approaches its effective dates. Reuters reported that Binance’s operations in the EU are expected to be scaled back after the exchange withdrew its application with Greece’s Hellenic Capital Market Commission and had not received approval from any other authority as of Friday.

Under MiCA-related service rules described in earlier coverage, failure to secure authorization could force changes starting July 1, including halting the onboarding of new EU-based users and limiting certain services for EU-based accounts. The scale of the potential impact is amplified by Binance’s large user base in Europe.

Reuters’ framing suggests the immediate issue is operational continuity for customers and liquidity providers, rather than broader regulatory uncertainty alone. Even if existing users retain some access for a limited time, onboarding restrictions and service limitations can still affect trading flows and compliance processes.

Europe’s exchange scramble: approvals for some, uncertainty for others

While the CNMV’s comments emphasize no extensions, Reuters also notes that other crypto exchanges have secured late approvals under MiCA. That contrast matters for investors and traders because it implies the market may not adjust uniformly: some platforms may remain fully operational in compliance with the framework, while others face step-downs.

Earlier Cointelegraph reporting highlighted that Binance’s licensing process has been complicated by application decisions. In particular, the exchange withdrew its Greece application, a move that reduced the likelihood of receiving timely authorization through that channel.

Debate over compliance and market practices

As the deadline nears, public criticism around exchange compliance has intensified. OKX founder and CEO Mingxing Xu responded to comments attributed to former Binance CEO Changpeng “CZ” Zhao about the EU deadline, saying Binance ignores laws and regulations while misleading the public.

In that response, Xu pointed to public reporting and court filings alleging that trading activity described as “best liquidity” included conduct tied to risks involving money laundering, sanctions violations, and market manipulation.

Cointelegraph also reported that it reached out to a Binance spokesperson, who referred to a Wednesday statement from the company.

Users weighing alternatives

Some users appear to be preparing for reduced access by looking at other venues. In community posts cited by Cointelegraph, Reddit users said they were considering Kraken for moving funds. Kraken—operated through Payward—has a Crypto Asset Service Provider licence via the Central Bank of Ireland, according to the publication’s earlier reporting.

For EU customers, the practical takeaway is that exchange choice may become a compliance issue as much as a convenience one. With onboarding restrictions expected to take effect if licenses are not obtained in time, users who wait for official operational guidance could face fewer options.

Over the next days, the key uncertainty is whether Binance will secure the required authorization in time to avoid the July 1 onboarding and service restrictions. Traders and customers should watch for regulator announcements and official updates from exchanges, because the transitional arrangements are ending and compliance-driven access changes could reshape liquidity across Europe quickly.

Australia’s securities regulator has extended temporary licensing relief for crypto firms until Sept. 30, giving businesses three more months to comply with updated digital asset rules.

According to ASIC, the extension replaces the previous June 30 deadline and applies to businesses seeking an Australian Financial Services (AFS) licence, as well as companies that may require market or clearing and settlement licences.

The regulator also expanded the relief to include digital asset firms operating through authorized representatives or intermediary arrangements with licensed entities.

ASIC said it has received around 30 licence applications since updating its digital asset guidance in October 2025, when it clarified that many crypto-related products fall within Australia’s existing financial services laws.

Extension gives firms more time to comply

Following the October guidance update, ASIC introduced a no-action position so eligible businesses could continue operating while preparing licence applications. Through Information Sheet 225 (INFO 225), the regulator stated that many digital asset products qualify as financial products under Australia’s technology-neutral legal framework, meaning providers often require an AFS licence.

According to ASIC, the temporary relief is intended to support businesses transitioning into the licensing regime while applications continue to be assessed. The regulator added that companies relying on authorized representatives or similar arrangements will now also remain covered during the extended transition period.

The latest decision comes days after Australia’s High Court unanimously ruled 7-0 in ASIC’s favor in its long-running case against Block Earner. As previously reported by crypto.news, the court found that the former fixed-yield crypto product offered by Web3 Ventures Pty Ltd, which operates as Block Earner, functioned as both a financial investment facility and a derivative under the Corporations Act.

The High Court determined that investor returns depended on movements in underlying digital asset prices and exchange rates, supporting ASIC’s interpretation that certain crypto products fall within existing financial services legislation. The case will now return to the Full Federal Court, which will consider ASIC’s appeal regarding penalties.

More regulatory changes remain ahead

While the licensing relief has been extended, ASIC noted that the temporary arrangement remains separate from Australia’s Digital Asset Framework, which Parliament passed in April and is scheduled to take effect on April 9, 2027.

Under that framework, digital asset platforms and tokenized custody platforms will formally enter Australia’s financial services licensing regime. ASIC warned in a May announcement that firms obtaining licences under INFO 225 may still need to add Digital Asset Platform (DAP) and Tokenized Custody Platform (TCP) authorisations once the new framework begins.

The licensing changes also arrive as Australia considers broader reforms affecting digital asset investors. As previously reported by crypto.news, the government has proposed replacing the current 50% capital gains tax discount with an inflation-indexed model from July 1, 2027.

Under the proposal, taxable gains would be adjusted for inflation rather than automatically receiving the existing discount after a one-year holding period, a change that could increase tax bills for many long-term crypto investors during strong market cycles.

Bitcoin sits near $60,000, down more than half from its October peak, with traders in extreme fear and institutions pulling money out for six straight weeks. The single question that decides where it goes next is whether the famous four-year cycle still governs Bitcoin, or whether institutions have broken it for good.

Bitcoin is trading near $60,000, and depending on which framework you believe, that number is either the early stage of a painful but normal correction that ends with a familiar recovery, or the beginning of something the old playbook cannot explain.

The price is down roughly 52% from the all-time high near $126,000 set in October 2025. It is resting on a long-term technical line that traders watch closely. The sentiment gauge known as the Fear and Greed Index is buried in extreme fear, and institutions have pulled money out of Bitcoin exchange-traded funds for six consecutive weeks.

Every one of those facts can be read two ways, and the reading you choose depends almost entirely on a single question that now hangs over the entire market: is Bitcoin still governed by its famous four-year cycle, in which case this is the correction the cycle always brings, or have institutions broken that cycle, in which case the old rules no longer tell you what comes next. 

This piece is built around that question, because it is the one that actually decides Bitcoin’s path through the rest of 2026, far more than any individual price level does.

The reason to frame a price prediction this way, rather than as a list of targets, is that the targets themselves flow from which thesis turns out to be right.

If the four-year cycle is alive, history points toward a deeper drawdown and a multi-quarter trough before the next halving-driven recovery. If the cycle is dead, the structural demand from funds and corporate treasuries could put a floor under the price well above where the old pattern would take it, turning a crash into a correction.

The honest work of a prediction, then, is not to pretend to know the number, but to lay out both frameworks clearly, weigh what the current evidence says about each, identify the levels and catalysts that would tip the balance, and translate all of it into concrete bull, bear, and base scenarios.

That is what follows: the cycle explained, the case for each side, what the crash is really signaling, the levels that matter, the scenarios, and the specific developments that would settle the debate.

Bitcoin at a crossroads

Start with where things actually stand, because the current picture is genuinely tense. Bitcoin fell hard through June, breaking down toward the $60,000 area in one of its worst stretches in months, with a single brutal session wiping out around $700 million in leveraged positions, the great majority of them bullish bets that were forced to close.

The stablecoin market has entered a new phase.

Once viewed primarily as a tool for crypto traders seeking protection from market volatility, stablecoins are increasingly becoming part of the broader financial system. Governments are introducing regulatory frameworks, payment companies are exploring blockchain settlement, and financial institutions are investing in infrastructure that connects traditional finance with digital assets.

As adoption expands, the conversation is shifting from speculation to utility. Businesses are beginning to explore stablecoins for treasury management, supplier payments, and international settlements, while consumers are gaining access to faster and more accessible digital payment options.

To better understand where this transformation is heading, Crypto Breaking spoke with Maksym Sakharov, CEO and Co-Founder of WeFi, about the future of stablecoins, the challenges facing mainstream adoption, and why he believes they are becoming a foundational layer of global financial infrastructure.

Crypto Breaking: Stablecoins have evolved far beyond their original role in crypto trading. How do you see their role developing in global payments over the next few years?

Maksym Sakharov: Stablecoins are increasingly becoming a payment layer for both individuals and businesses that need value to move faster, more predictably, and across multiple markets.

“In the early days, stablecoins primarily served crypto traders moving funds between exchanges while avoiding volatility. That use case remains relevant, but today’s strongest growth is coming from real economic activity.”

He believes businesses are beginning to recognize stablecoins as practical tools for treasury operations, vendor payments, and international settlements, while consumers benefit from easier access to stable digital value and faster cross-border transfers.

According to Sakharov, the next stage of adoption will depend less on blockchain technology itself and more on user experience.

“People shouldn’t need to understand the underlying technology. They simply need reliable access, clear balances, fiat connectivity, and payment products that make stable digital value easy to use.”

Crypto Breaking: What are the most compelling real-world use cases for stablecoins today beyond speculation?

Sakharov argues that the strongest use cases emerge wherever users already experience friction in traditional finance.

International freelancers can receive payments faster while avoiding unnecessary currency conversions. Companies paying overseas suppliers can settle transactions more efficiently without waiting through lengthy banking processes. Businesses managing treasury across different regions gain access to liquidity that operates around the clock rather than only during banking hours.

He also highlights another growing trend: individuals in many countries increasingly seek access to stable digital assets as a way to preserve purchasing power while maintaining the flexibility of digital payments.

“The common denominator is solving practical financial problems such as settlement speed, currency friction, value portability, and financial accessibility.”

Crypto Breaking: What remains the biggest obstacle preventing mainstream adoption?

While blockchain settlement has become significantly more efficient, Sakharov believes the surrounding ecosystem still requires substantial improvement.

“The biggest challenge today is fragmentation.”

Users may receive stablecoins quickly, but questions immediately follow. Can they easily spend them? Can they convert them into local currency? Can businesses integrate them into existing financial workflows? Can users trust both the provider and the underlying infrastructure?

According to Sakharov, solving these issues requires more than faster blockchains.

“The industry needs deeper liquidity, stronger fiat connectivity, clearer regulation, better compliance, broader merchant acceptance, and simpler products. None of these alone is sufficient.”

Crypto Breaking: How will regulation shape the future of stablecoins?

Regulation, Sakharov says, is likely to accelerate institutional adoption rather than slow innovation.

“For many years, stablecoins evolved faster than the regulatory frameworks surrounding them. That enabled innovation, but it also created uncertainty.”

As governments establish clearer rules around reserves, redemption, custody, compliance, and disclosure requirements, businesses will gain greater confidence in integrating stablecoins into mainstream financial operations.

At the same time, regulation raises expectations for issuers and infrastructure providers.

“Supporting stablecoins is no longer just a technical challenge. It also requires governance, compliance, risk management, and operational transparency.”

Crypto Breaking: How are stablecoins reshaping cross-border payments?

Traditional international payments often remain dependent on multiple intermediaries, limited banking hours, currency conversion processes, and delayed settlement.

Stablecoins offer an alternative model.

“Value can move digitally with faster settlement, greater transparency, and fewer intermediary steps.”

However, Sakharov emphasizes that blockchain alone is not enough.

Liquidity, regulatory compliance, local banking access, payment acceptance, and customer support all remain essential components of a complete financial ecosystem.

He explains that WeFi is focused on connecting stablecoin rails with fiat access and account-like usability to make cross-border financial services more practical for both businesses and consumers.

Crypto Breaking: What should businesses and investors watch over the next two years?

Rather than focusing exclusively on which stablecoins dominate the market, Sakharov believes attention should shift toward the infrastructure being built around them.

Businesses should monitor how stablecoins integrate into treasury management, supplier payments, and international operations.

Investors should pay close attention to companies developing access layers, payment connectivity, compliance systems, liquidity infrastructure, and products that bridge stablecoins with traditional financial services.

Consumers, meanwhile, may notice stablecoins becoming less visible while becoming more useful.

“The biggest change will be when people use stablecoins without thinking about them. They’ll simply experience clearer balances, easier payments, and better access to financial services.”

Final Thoughts

As stablecoins continue to mature, the conversation is increasingly centered on infrastructure rather than speculation.

While regulatory clarity, user experience, and interoperability remain significant challenges, industry leaders believe the technology is steadily moving toward mainstream financial adoption.

Whether stablecoins ultimately become a standard component of global finance will depend not only on blockchain innovation but also on the ability of infrastructure providers to make digital value as seamless and intuitive as today’s online banking experience.

About Maksym Sakharov

Maksym Sakharov is the CEO and Co-Founder of WeFi, a company focused on building compliant financial infrastructure that connects stablecoin payments, fiat access, and digital financial services. His work centers on improving cross-border payments and accelerating the practical adoption of stablecoin-based financial products.