Coinbase Financial Markets has begun offering US institutional clients access to global crypto options and perpetual futures through a regulated futures commission merchant, including connectivity to Deribit’s crypto options platform.

Coinbase said the launch follows guidance from the Commodity Futures Trading Commission that allows a regulated futures commission merchant to connect US clients with global crypto derivatives liquidity. The company stressed that Coinbase Financial Markets is the first CFTC-regulated FCM to provide such access.

Deribit, which Coinbase acquired in August 2025 as part of its expansion into crypto derivatives, is the largest crypto options exchange by open interest. CoinGlass data shows Deribit held roughly $31 billion in Bitcoin options open interest on May 27, compared with about $2.7 billion on OKX, $1.8 billion on Binance and $1.2 billion on Bybit.

According to Friday’s announcement, institutional clients can begin onboarding immediately, while broader access, including retail, is expected to follow later.

Key takeaways

• Coinbase becomes the first CFTC-regulated futures commission merchant to connect US institutional clients to global crypto options and perpetual futures liquidity via Deribit.
• Deribit dominates Bitcoin options open interest, with roughly $31 billion in BTC options as of late May, highlighting liquidity concentration on a single platform.
• US derivatives venues are expanding crypto offerings as regulators signal a path to onshore perpetual futures and new regulated products, including CME’s crypto index futures and Bitcoin Volatility futures, while exchanges such as Kraken pursue expansion through Bitnomial.
• The regulatory backdrop features ongoing moves by US agencies toward onshoring certain crypto derivatives, including a September 2025 joint SEC/CFTC statement and accompanying guidance on 24/7 trading and clearing.

US-regulated access deepens crypto derivatives usage

The Coinbase arrangement leverages an onshore path for US institutions seeking exposure to a broader derivatives liquidity pool beyond domestic venues. By connecting US clients to Deribit through a regulated FCM, Coinbase aims to offer regulated access to a dominant offshore options market, aligning with a broader push to reconcile offshore liquidity with US supervision.

Institutional onboarding is available immediately, with a plan to roll out broader access, including retail participation, at a later stage. The move reflects a growing appetite among large traders for regulated pathways to global crypto derivatives, alongside continued regulatory scrutiny of products and venues offering such exposure.

Deribit’s liquidity position reinforces market dynamics

Deribit’s leadership in BTC options open interest underscores a liquidity concentration that has persisted in crypto derivatives. With roughly $31 billion in Bitcoin options open interest as of May 27, it stacks up against peer venues and shapes the depth of liquidity for complex strategies like spreads, hedges, and volatility plays. The data points cited by CoinGlass show OKX at about $2.7 billion, Binance at $1.8 billion, and Bybit at $1.2 billion in BTC options open interest at the same snapshot.

The partnership with Coinbase could bolster Deribit’s role as a preferred onramp for US institutions seeking regulated access to offshore liquidity pools, potentially affecting spreads, dynamic hedging costs, and the availability of sophisticated options structures for large players.

Regulatory momentum and market diversification

The launch arrives amid a broader regulatory discourse about bringing crypto derivatives onshore. In a joint statement published in September 2025, the US Securities and Exchange Commission and the CFTC signaled they would explore ways to bring perpetual futures trading onshore, noting that such contracts have largely remained offshore due to regulatory and jurisdictional constraints. The agencies said they could consider steps to “onshore perpetual contracts” and bring activity currently flowing to foreign platforms back to regulated US markets.

In parallel, US derivatives venues have been expanding their crypto offerings. CME Group has announced plans to launch a crypto index futures contract tracking a basket of seven cryptocurrencies, including Bitcoin, Ether, Solana and XRP. Days later, CME unveiled Bitcoin Volatility futures, a regulated product that will settle to a 30-day measure of expected Bitcoin volatility derived from CME options markets.

Other US players are pursuing similar growth trajectories. Kraken’s parent Payward completed its acquisition of Bitnomial, a CFTC-regulated derivatives platform that earlier this year launched the first US-regulated futures contracts tied to Injective’s INJ token, following a prior launch for Aptos earlier in the year.

Additionally, CFTC staff published guidance on 24/7 trading, clearing and settlement for crypto asset derivatives, arguing that such markets may be particularly well suited to round-the-clock activity.

Investors and practitioners should watch how onboarding evolves for retail participants, how liquidity shifts between onshore and offshore venues, and what regulatory clarifications emerge as US authorities continue to shape the trajectory of crypto derivatives in a regulated framework.

Jeffrey Sprecher, chief executive officer of Intercontinental Exchange (ICE), has said the company wants equal regulatory treatment as it evaluates opportunities in the fast-growing market for onchain perpetual futures.

Speaking at a Bernstein conference on May 27, Intercontinental Exchange CEO Jeffrey Sprecher said the company has been discussing blockchain-based perpetual futures with regulators while also holding multiple meetings with the Hyperliquid team to better understand the fast-growing sector.

Sprecher’s comments come weeks after Bloomberg reported that ICE and CME Group had spoken with Capitol Hill officials about potential risks tied to Hyperliquid’s markets, particularly those connected to global oil trading. 

According to Sprecher, those discussions were not an effort to target Hyperliquid but part of ICE’s effort to determine whether existing regulations would permit similar products.

“What we are saying to the regulators is, ‘Can we do that?’ Why are you prohibiting us from doing this when it’s already happening? And can’t we have a level playing field?” – Jeffrey Sprecher.

Rather than treating onchain platforms as competitors to be challenged, ICE has been engaging directly with them, according to Sprecher. He said the exchange operator has been learning how decentralized perpetual markets function while helping crypto native firms understand traditional derivatives markets.

“We’re not freaked out about it. We’re actually talking to these people and learning about it.”

ICE explores onchain commodities trading

Interest from ICE comes as blockchain-based perpetual futures attract growing volumes from traders looking for uninterrupted access to markets.

Earlier this month, JPMorgan analysts noted that Hyperliquid had seen rising activity from non-crypto participants using its 24-hour markets to trade oil exposure outside traditional exchange hours. 

Sprecher said recent geopolitical tensions in the Middle East have drawn additional attention to weekend trading activity because major developments often occur when conventional markets are closed.

At the same time, ICE has been building ties with crypto firms that already operate in the sector. Last week, the company announced plans with OKX to launch oil perpetual contracts linked to ICE Brent Crude and WTI Crude benchmarks.

ICE has also invested in OKX at a $25 billion valuation and secured a seat on the company’s board. ICE has also backed prediction market platform Polymarket, including a $600 million investment announced in March.

Regulators face questions over market structure

Sprecher added that regulators will eventually need to decide how blockchain-based perpetual futures fit within existing financial rules.

According to Sprecher, policymakers could establish a dedicated framework for perpetual futures or classify them under existing swaps regulations such as the Dodd-Frank Act in the U.S. and EMIR rules in Europe.

Hyperliquid Policy Center, a U.S. advocacy group supporting the protocol, has argued that continuous trading improves market efficiency by removing interruptions between traditional trading sessions and allowing price discovery to occur around the clock.

Another area drawing attention involves private market trading on blockchain platforms. Sprecher pointed to the expected June 11 SpaceX IPO as a real-world test of whether prices discovered through onchain markets influence public listings.

According to Sprecher, the expected June 11 public listing of SpaceX could provide insight into whether prices discovered in onchain markets influence traditional IPO valuations.

Bitcoin and Ethereum faced a large monthly options expiry on May 29 as prices stayed below key levels.

Greeks.live said 84,000 Bitcoin options expired, with a notional value of $6.2 billion. It also said 639,000 Ethereum options expired, with a notional value of $1.28 billion.

The expiry came after Bitcoin fell below $75,000 during the week. Ethereum also traded near the $2,000 zone after losing support.

Bitcoin falls below max pain

Bitcoin’s put-call ratio stood at 0.88, according to Greeks.live. The max pain level was $75,000.

That level sat above the market price during the expiry window. This showed that bulls failed to pull Bitcoin back toward a key settlement level.

Crypto.news had reported that Bitcoin fell toward $73,000 before the expiry. The report also cited ETF outflows as one reason behind market pressure.

The same market setup kept traders focused on the $75,000 level. A move back above it could ease pressure, but Bitcoin failed to reclaim it before expiry.

Ethereum stays under pressure

Ethereum’s options data also showed a large expiry. Greeks.live said ETH had a put-call ratio of 0.81 and a max pain level of $2,200.

Ethereum traded below that level before settlement. This left many bullish positions under pressure as the market moved lower.

The price action also kept attention on the $2,100 level. Greeks.live said traders now watch whether ETH can retake that zone.

Related crypto.news coverage showed Ethereum trading near $2,000 after recent weakness. The move placed ETH near a key psychological level.

Options data shows fragile sentiment

Greeks.live said the market did not show extreme bearish positioning. Bitcoin and Ethereum put-call ratios stayed below 1.

That means puts did not heavily outnumber calls. Still, the latest price action showed that traders had reduced risk.

The firm described the expiry as a form of bearish unwinding. Large positions expired, while long traders failed to reclaim key price levels.

Greeks.live said, “short-term IV is likely to retreat after expiration.” This remains a market forecast and may change if prices move sharply.

June contracts take market focus

Greeks.live said only 20% of options expired this month. After settlement, June options rose to about 40% of open interest.

That shift means the next round of positioning may now guide market direction. Traders will watch whether capital returns after the expiry.

Bitcoin must reclaim $75,000 to improve short-term sentiment. Ethereum also needs to move back above $2,100 to ease pressure.

For now, the market remains cautious. The expiry removed large positions, but it did not restore strong buying demand.

A majority of European crypto users are still using unlicensed exchanges weeks before the EU’s MiCA transition period comes to an end, according to an analysis published by OKX Europe.

According to an analysis by OKX Europe shared with crypto.news, 7.6 million of the 18.5 million crypto exchange app downloads recorded across Europe between May 2025 and May 2026 went to platforms that do not hold a valid Markets in Crypto-Assets license. 

OKX Europe said those downloads accounted for 41% of all exchange app installs tracked during the period.

The study, which cited Sensor Tower download data and licensing records from thecryptoregister.com, found that about 60% of European crypto users continue to use exchanges operating outside the MiCA framework. Thecryptoregister.com compiles licensing information from the European Securities and Markets Authority and national regulators.

July 1 deadline draws closer

With the MiCA transition period set to end on July 1, exchanges that have not secured authorization could face enforcement action if they continue operating in the European Union. Under the framework, crypto firms are required to obtain approval as Crypto-Asset Service Providers to legally offer services across the bloc.

“European crypto users may not know their exchange is operating without a MiCA licence and time before enforcement begins is running out.” – Erald Ghoos, CEO of OKX Europe.

“7.6 million app downloads in Europe last year going to unlicensed platforms is just the tip of the iceberg; many of these exchanges will have users who have been using their platforms and apps for years.”

He urged users to verify the licensing status of their exchange before the transition period expires.

The ESMA MiCA register, which is publicly available through the regulator’s website, allows users to check whether a platform holds a MiCA authorization, operates under a temporary transitional arrangement, or remains unlicensed.

Regulators step up pressure on firms

Growing regulatory pressure has already emerged in some EU member states. In France, the Financial Markets Authority recently warned crypto firms to complete their MiCA licensing applications before June 30 or stop serving local customers.

AMF President Marie-Anne Barbat-Layani recently said it had become “very, very urgent” for firms to finalize their applications before the deadline. 

According to the French regulator, companies without approval should prepare orderly wind-down plans that allow customers to recover or transfer their crypto assets.

French authorities have also warned that unauthorized providers could face blacklisting, public warnings, fines, and possible legal action if they continue targeting users after the transition period ends.

At the same time, some regulators, including France’s AMF, have raised concerns about differences in licensing standards among jurisdictions and the risks that could emerge if approvals are granted under weaker supervisory conditions.

MiCA allows firms licensed in one EU country to offer services across all 27 member states through passporting rights.

Crypto markets found support on Friday after reports suggested the United States and Iran were close to extending their ceasefire and reopening shipping routes through the Strait of Hormuz.

According to data from CoinGecko, the total cryptocurrency market capitalization held near $2.56 trillion after falling nearly 4% during the previous session, while Bitcoin (BTC) stabilized above the $73,000 support area after briefly testing the $72,600-$73,000 range.

Ethereum (ETH) hovered around the $2,000 level after briefly falling below the threshold for the first time since late March, while major altcoins including Solana (SOL), XRP (XRP), BNB (BNB), and Dogecoin (DOGE) traded in a narrower range as liquidation-driven selling eased.

Crypto prices stabilized after reports that U.S. and Iranian negotiators had tentatively agreed to extend their ceasefire by 60 days and potentially allow unrestricted shipping through the Strait of Hormuz. The proposal, cited by several media reports, also includes Iran removing mines from the waterway within 30 days.

President Donald Trump has not yet approved the proposed terms, while Vice President JD Vance said it remains unclear whether a final agreement can be reached.

Oil prices retreated as traders reacted to the latest developments. WTI crude futures fell below $88 per barrel, while Brent crude dropped under $92. Market data showed the U.S. oil benchmark has declined more than 12% this month as expectations for a diplomatic resolution increased.

At the same time, risk appetite improved across traditional markets. Japan’s Nikkei 225 advanced 2.5% on Friday, while Hong Kong’s Hang Seng Index gained 0.5% as investors returned to technology and growth stocks.

Liquidation pressure eases after market rout

According to CoinGlass data, the crypto derivatives market has calmed significantly after Thursday’s sharp selloff triggered one of the largest liquidation events in recent months.

The analytics platform reported roughly $217 million in liquidations over the past 24 hours, far below the estimated $941 million wiped out during the previous session. Long and short liquidations were also more evenly balanced, suggesting the aggressive one-sided selling that accelerated the decline has largely subsided.

Bitcoin’s recovery coincided with renewed buying interest near the $72,600 to $73,000 area, a zone that many traders have closely monitored following several previous tests on the daily chart.

Ethereum also found support after dipping below $2,000, with traders stepping in as the asset entered deeply oversold territory on several short-term momentum indicators.

Despite the rebound, institutional demand remains weak. Data from SoSoValue released on May 29 showed U.S. spot Bitcoin ETFs recorded another $228 million in net outflows, extending their withdrawal streak to nine consecutive sessions. The latest figures followed Wednesday’s $733 million exodus, the largest single-day outflow recorded this year.

According to ETF flow data, investors have withdrawn approximately $2.85 billion from spot Bitcoin funds during the current streak.

Ethereum ETFs have faced similar pressure. The products recorded $121 million in net outflows on Thursday, extending their losing streak to 13 consecutive trading days, the longest stretch since March 2025.

Beyond ETF withdrawals, on-chain metrics suggest a growing number of investors have slipped into unrealized losses following the recent market decline.

Drawing attention to recent on-chain developments, crypto analyst Master of Crypto highlighted Glassnode data showing that Bitcoin supply held at a loss increased by roughly 580,000 BTC during the latest decline. The chart shared by the analyst in a May 29 X post showed the metric rising from approximately 7.75 million BTC to 8.33 million BTC as Bitcoin dropped toward the $73,000 region.

Drawing attention to the affected price range, Master of Crypto noted that many investors who accumulated Bitcoin between roughly $72,900 and $76,600 are now underwater. 

“Many buyers got trapped near the local top. That price zone is no longer strong support. Instead, it may act as resistance, as many traders could look to sell when the price bounces back.”

Elsewhere, Ethereum’s brief drop below $2,000 for the first time since late March has sparked mixed reactions across the crypto community.

Meanwhile, fellow analyst and crypto commentator Lucky noted that social media platforms had become flooded with “buy the dip” discussions as traders debated whether the decline presented a buying opportunity or the beginning of a deeper correction.

Traders watch $6.1 billion options expiry

Attention has now turned to the expiration of roughly $6.1 billion worth of Bitcoin options contracts on Deribit today. Data from the platform shows that 83,660 Bitcoin options contracts are set to expire, with the maximum pain price positioned near $75,000.

The largest concentration of call options sits at the $80,000 strike price, while the biggest cluster of put options is concentrated around $75,000, placing both levels at the center of today’s trading activity.

Meanwhile, inflation data released this week continues to weigh on expectations for Federal Reserve policy.

April’s Personal Consumption Expenditures report showed headline inflation rose to 3.8% year-over-year from 3.5% in March, while core PCE increased to 3.3% from 3.2%. Energy prices climbed 17.9% over the same period amid disruptions linked to the Iran conflict.

Although monthly core PCE rose just 0.2%, below economists’ forecasts of 0.3%, traders have largely removed expectations for Federal Reserve rate cuts in 2026 as inflation remains well above the central bank’s 2% target.

Roughly 5 million ZEC out of 16.7 million circulating now sits in shielded addresses, up from 8 percent in early 2024. 

The Orchard pool alone holds 4.2 million ZEC (25.4 percent of supply), having absorbed nearly all the recent growth. Public ZEC transaction counts have stayed flat at around 8,500 per day, while shielded transaction adoption hit an all-time high of 59.3 percent in February 2026. The market keeps reading this as a price story. 

The honest read is the shielded supply metric is the most important signal in privacy crypto right now, and it correlates with genuine adoption in ways previous Zcash rallies did not. This is what the data actually shows, why the metric matters, and what it tells us about the post-CLARITY Act regulatory environment for privacy assets.

What “shielded supply” actually measures

The shielded supply of a privacy-focused blockchain is a deceptively simple metric that carries more analytical weight than most coverage acknowledges. To use it properly, you have to understand what it is, how it is measured, and why it differs from the surface-level signals most observers track.

Zcash is what cryptographers call a “privacy-optional” blockchain. The network supports two categories of addresses: transparent addresses, which behave like Bitcoin addresses and expose transaction details to public observation, and shielded addresses, which use zero-knowledge proofs (zk-SNARKs) to hide the sender, receiver, and amount of every transaction. A ZEC holder can choose which type of address to use, and can move funds between the two categories.

Shielded supply refers to the total amount of ZEC held in shielded addresses at any given moment. The metric is measured directly on chain. Anyone can verify it by running a Zcash node and counting the balances in shielded versus transparent addresses. The number cannot be faked because the cryptographic system requires actual proofs of valid balance transitions to enter or exit a shielded pool.

The reason this matters is moving ZEC into a shielded address requires direct interaction with the Zcash blockchain. You have to construct a valid shielded transaction, generate the zero-knowledge proof, broadcast it to the network, and wait for confirmation. This is not something exchanges do automatically. It requires the holder to make an active choice to move their funds into the private layer.

This is what makes shielded supply such a useful adoption signal. Speculators who buy ZEC on Coinbase or Binance and leave it on the exchange contribute nothing to shielded supply. The exchange holds the funds in transparent addresses. The price can rally substantially without shielded supply moving at all. When shielded supply does grow, it reflects actual holders making deliberate choices to use the network’s privacy features rather than just speculating on the token price.

The growth from 8 percent of supply in early 2024 to roughly 30 percent in May 2026 represents a structural shift in how Zcash is actually being used. Five million ZEC has been actively moved into shielded addresses by holders making individual decisions to prioritize privacy. The cumulative weight of those decisions is what the metric captures.

The three pools and why Orchard dominates

Zcash has not always had a single shielded pool. The network has launched three generations of privacy infrastructure, each more efficient and capable than the previous one. Understanding which pool the new supply is going into tells you more about what is actually happening.

Sprout launched in October 2016 as the original shielded pool. It used the BCTV14 zk-SNARK construction and required massive computational resources to generate proofs. Mobile transactions were impossible. The pool worked as a proof of concept but had severe usability limitations. As of late 2025, Sprout holds only 25,591 ZEC, or roughly 0.2 percent of supply. This is the residual of a pool most users have moved away from.

Sapling launched in October 2018 as the second-generation shielded pool. It introduced major performance improvements, reducing proof generation from tens of seconds to roughly one second and cutting memory requirements from gigabytes to megabytes. Sapling made shielded transactions practical on mobile devices and consumer hardware for the first time. As of late 2025, Sapling holds 635,812 ZEC, or roughly 3.9 percent of supply. This is meaningful but no longer where the growth is happening.

Orchard launched in May 2022 as part of Network Upgrade 5 (NU5). This is the pool that has absorbed nearly all the recent growth. Orchard uses the Halo 2 proving system, which eliminates the need for a trusted setup (a major historical concern for early zk-SNARK constructions). It supports Unified Addresses, which automatically route incoming funds to the most private available pool. It enables recursive proofs to improve scalability. As of late 2025, Orchard holds 4.2 million ZEC, or 25.4 percent of supply.

The numbers tell a clear story. The recent growth in shielded supply is overwhelmingly going into Orchard, not into the older pools. This is what you would expect if real users were responding to better infrastructure: they migrate to the newest pool because it offers the best privacy guarantees with the lowest friction. Speculative behavior would not produce this pattern. Speculators would not care which pool their ZEC sits in, because they are not using the privacy features. The fact growth is concentrated in Orchard specifically suggests users are making choices based on the actual quality of the privacy infrastructure.

Why the metric correlates with adoption, not speculation

The most important analytical observation about the current shielded supply growth is it diverges sharply from the pattern of previous Zcash rallies.

Past ZEC price rallies have typically shown the same pattern: price goes up first, shielded supply growth lags or stays flat, and the rally eventually fades without producing structural change in network usage. This pattern is consistent with speculative trading, where buyers acquire ZEC for price exposure and leave it on exchanges or in transparent addresses. The privacy features are not being used. The token is being treated as a financial asset rather than as privacy infrastructure.

The current 2025-2026 rally shows a different pattern. Shielded supply has grown alongside the price move, and in some cases preceded it. The metric was at 8 percent in early 2024, climbed to 18 percent by October 2025, hit 23 percent by November 2025, and crossed 30 percent by May 2026. This growth happened across both the rally and the consolidation periods. It is not a function of price action. It is happening because holders are actively choosing to use the privacy features.

Josh Swihart, CEO of Electric Coin Company (the firm behind Zcash development), framed the signal directly in late 2025: “Watch the Zcash shielded pool relative to ZEC price. Those who shield their ZEC don’t sell.” The implication is shielded ZEC is structurally different from transparent ZEC in terms of holder behavior. Once someone has gone to the trouble of moving their ZEC into a shielded address, they typically hold it for longer periods rather than trading it actively. The shielded pool functions, in effect, as a long-term holding mechanism that reduces effective circulating supply.

Victor, a developer in the Zcash ecosystem, captured the same pattern in plainer terms: “Normal crypto behavior: pump to exchange to dump. Zcash behavior: pump to shield to zodl. This isn’t speculation. It’s adoption of privacy tech.”

The “zodl” reference is to Zodl, a Zcash wallet that defaults to shielded transactions. This is the second piece of why the current adoption pattern is structurally different. Wallets like Zodl have made shielded transactions the default user experience rather than an advanced option users have to actively enable. Combined with Unified Addresses (UAs), which automatically route funds to the most private available pool, the user-facing friction of using shielded transactions has dropped substantially.

The result is shielded transaction adoption (a separate but related metric tracking the percentage of all Zcash transactions that use shielded addresses) hit an all-time high of 59.3 percent in February 2026. More than half of all Zcash transactions are now using the privacy features. This is not speculative behavior. It is real users running real transactions through the shielded pool.

The combination of these signals points to genuine adoption rather than pure speculation. The price action is one signal. The shielded supply is a more important one. The shielded transaction percentage is the most important of all, because it shows the privacy features are being actively used rather than just held.

What is driving the structural shift

Three factors explain why shielded supply has grown from 8 percent to 30 percent over the past 18 to 24 months, and understanding them helps separate this growth from previous cycles.

The first is wallet user experience. Zcash historically had a difficult shielded transaction experience. Users had to manually configure their wallets, accept longer transaction times, and accept not all infrastructure (exchanges, payment processors, blockchain explorers) supported shielded addresses. Many users defaulted to transparent transactions simply because shielded transactions were operationally inconvenient.

This has changed substantially. Zodl and other modern Zcash wallets now default to shielded transactions. Unified Addresses (UAs), introduced with Orchard in May 2022, let users receive funds from any address type into a single Unified Address that automatically routes to the most private available pool. This removes most of the user-facing friction. A user holding ZEC in a modern wallet is, by default, using the privacy features rather than having to consciously opt in to them.

The second factor is regulatory environment shifts. The SEC completed a long review of Zcash in January 2026 with no enforcement action, removing a major regulatory overhang that had hung over the asset for years. Robinhood added ZEC to its platform during the same period, expanding retail access. Grayscale filed for a spot Zcash ETF, which if approved would be the first privacy coin ETF in the United States.

These regulatory developments do two things. They reduce the legal risk of holding ZEC, which encourages more long-term holding behavior (which often translates into shielded supply). And they signal privacy is becoming a regulated rather than prohibited category, which gives institutional and sophisticated retail holders more confidence to use the privacy features rather than avoiding them.

The third factor is the broader cultural shift around financial surveillance. Multicoin Capital’s Tushar Jain framed the institutional thesis directly: Bitcoin is censorship-resistant but transparent, which means tax authorities armed with blockchain explorers can see what holders own and where they spend it. Zcash’s shielded pool hides what cannot be seen. The framing has resonated with a category of holders who are not necessarily doing anything illegal but who do not want their financial activity exposed to potential surveillance, future regulatory changes, or hostile state actors.

The combination of better user experience, friendlier regulatory environment, and increased awareness of financial privacy as a category produces the structural growth in shielded supply. None of the three factors alone would produce a sustained shift. Together, they produce the pattern we are seeing.

The supply pressure dynamic that nobody discusses

A consequence of the shielded supply growth that does not get much attention is what it does to ZEC’s effective circulating supply.

ZEC has a fixed maximum supply of 21 million coins, following the same monetary structure as Bitcoin. Approximately 16.7 million ZEC is currently in circulation, with the rest scheduled to be released through future mining rewards (Zcash uses Proof of Work, though a planned upgrade to Proof of Stake through “Crosslink” is in development).

Of the 16.7 million circulating, roughly 5 million now sits in shielded addresses. ZEC in shielded addresses is, in practice, less liquid than ZEC in transparent addresses. The holder has paid the operational cost of moving funds into the shielded pool, which suggests longer-term holding intent. Exchanges generally do not support direct deposits to shielded addresses (Coinbase, for example, supports receiving from shielded addresses but does not support sending to them), which adds friction for any holder who wants to move funds out of shielded storage for trading.

The practical effect is the effective liquid circulating supply is closer to 11.7 million ZEC, not the 16.7 million on the headline numbers. As shielded supply grows, the effective liquid supply shrinks. This is structurally similar to how Bitcoin’s “long-term holder” supply (BTC that has not moved in over a year) functions as a deflationary pressure that reduces effective tradable float.

Under standard supply and demand mechanics, shrinking effective supply at constant demand produces upward price pressure. The 800 percent run in 2025 and the additional 30 to 70 percent weekly moves in May 2026 are consistent with this dynamic. The shielded supply growth is not just an adoption signal. It is a structural reduction in tradable ZEC that contributes mechanically to price appreciation when demand rises.

This is the technical reason why analysts who track the shielded supply metric have been more bullish on ZEC than analysts who focus only on price action. The supply absorption story has been visible in the on-chain data for over a year. The price has only recently caught up to what the supply dynamics were predicting.

What this means for ZEC’s investment thesis

The shielded supply analysis suggests a different investment thesis for ZEC than the “privacy coin speculation” framing most coverage applies.

Under the speculation framing, ZEC is one of several privacy coins (alongside Monero, Dash, and others) that experiences periodic rallies when crypto traders rotate into the privacy category. The rallies are typically driven by short-term narratives (a specific regulatory event, a major exchange listing, a high-profile endorsement) and tend to fade as the narrative loses momentum. Buy the rumor, sell the news. The price chart shows the cycles.

Under the adoption framing the shielded supply data supports, ZEC is being structurally repositioned as functional privacy infrastructure rather than just a financial asset. The shielded supply growth is the visible measurement of this transition. The wallet user experience improvements, the regulatory shifts, and the cultural concerns about financial surveillance are the underlying drivers. The price appreciation is a consequence of the supply dynamics the adoption produces.

The two framings produce different predictions for ZEC’s medium-term price action. The speculation framing predicts the current rally will eventually fade and ZEC will retrace toward its pre-rally levels, as has happened with previous privacy coin cycles. The adoption framing predicts shielded supply will keep growing toward 40 to 50 percent of circulating supply, the effective liquid supply will keep shrinking, and the price will reflect the structural supply dynamics over a multi-year horizon.

Neither framing is provably correct in advance. But the shielded supply metric is the cleanest empirical test of which framing is more accurate. If shielded supply keeps growing during periods of price weakness, the adoption framing is being validated. If shielded supply stagnates or reverses when the price retraces, the speculation framing is being validated.

The honest read of the current data is the adoption framing is winning. Shielded supply has grown through both rally and consolidation periods. The growth is concentrated in Orchard, the newest and most user-friendly pool. The wallet infrastructure improvements that drive the shift are real and ongoing. The regulatory environment is becoming friendlier rather than hostile. The cultural concerns about financial surveillance are intensifying rather than fading.

For ZEC holders, the practical implication is the shielded supply trajectory is the metric to watch more than the daily price action. If shielded supply keeps growing, the structural thesis stays intact. If it stalls, the thesis weakens. The price will follow.

The institutional and ETF signals

The institutional adoption layer reinforces what the on-chain data is showing.

Multicoin Capital’s disclosed ZEC position, accumulated since February 2026 and revealed at Consensus Miami, represents the most prominent institutional bet on the privacy thesis to date. Fund partner Tushar Jain’s framing has been widely circulated: Bitcoin is censorship-resistant but transparent, while Zcash provides actual privacy through the shielded pool. The position has been substantial enough to move market dynamics, with combined institutional disclosures triggering approximately $62 million in futures liquidations during the May 2026 rally.

Other institutional exposure has come from funds linked to Arthur Hayes (the BitMEX co-founder whose Maelstrom fund has been notably active in privacy positioning) and Cypherpunk Technologies, a Nasdaq-listed company that holds digital assets aligned with cryptographic privacy principles.

The institutional pattern matters because it represents a category of capital that traditionally does not chase short-term narratives. Multicoin’s accumulation since February predates the May rally by months. The fund was building the position when the market was still treating ZEC as a relatively boring privacy coin with limited near-term upside. This is the kind of patient institutional positioning that suggests genuine conviction in the underlying thesis rather than speculative rotation into a hot narrative.

The Grayscale spot Zcash ETF filing adds another structural layer. If approved (the SEC’s January 2026 no-action decision removed the major regulatory blocker), the ETF would be the first privacy coin ETF in the United States. This would create a regulated investment vehicle that pulls institutional capital into ZEC without requiring holders to engage with the privacy features themselves. The ETF would, ironically, raise demand for an asset whose value proposition rests on privacy features the ETF holders themselves would not be using.

Jamie Dimon, the chief executive of JPMorgan Chase, has reiterated strong opposition to the current draft of the Digital Asset Market Clarity Act (CLARITY), arguing that the proposal as written would shape crypto market structure in ways banks will resist.

“We will fight it, if we lose, we lose, and we will live, okay? But it will be fought. No one is going to bow down to this guy or that company, and he’s the only one, and he’s spending hundreds of millions of dollars on this thing in Washington.”

Dimon’s comments come as the CLARITY bill undergoes ongoing negotiations between the crypto industry and the banking lobby. He criticized Coinbase and CEO Brian Armstrong’s role in those discussions, framing the lobbying dynamic as a contested power center in Washington.

Cointelegraph, the Senate Banking Committee marked up the CLARITY Act in May and voted to advance it in that chamber. It remains to pass both the Senate and the House and would require the signature of U.S. President Donald Trump to take effect.

Related: Cointelegraph coverage of Armstrong’s role in the negotiations

Key takeaways

• The governing critique centers on yield‑bearing products and the potential to pay interest on deposits and stablecoins, a point raised by Dimon in his Fox Business interview.
• The bill’s perceived gaps include AML, BSA sanctions, and capital reserve frameworks—areas Dimon says banks would expect crypto service providers to meet.
• Legislative progress shows the CLARITY Act was advanced in the Senate Banking Committee in May, but it still faces hurdles before becoming law.
• Political dynamics suggest limited bipartisan support to date, with only a small number of Democrats joining Republicans in the initial advancement, raising questions about floor passage.
• Market expectations, as tracked by Polymarket, indicated a shifting probability of enactment in 2026, reflecting ongoing regulatory uncertainty and policy debate.

Contextualizing CLARITY within the regulatory landscape

Base Azul is live on mainnet. The upgrade gives Coinbase’s Ethereum layer 2 a new proof system and Base-native clients.

Base announced that Azul is live on mainnet after months of testing. It is the network’s first independent upgrade since Base started moving toward its own stack.

Base documents list the mainnet activation for May 28, 2026, at 18:00 UTC. The update changes proofs, clients, and Ethereum upgrade features.

The network said Azul makes Base “faster and more secure.” That claim refers to a multiproof system. It combines trusted execution environment proofs and zero-knowledge proofs.

Under the system, either proof can finalize a proposal on its own. Base says withdrawals can finish in “as little as one day” when both systems agree.

Multiproofs target Base decentralization

The multiproof design reduces reliance on one proof path. If a zero-knowledge proof conflicts with a permissioned TEE proof, the ZK proof can override it.

That setup gives Base another step toward Stage 2 decentralization. It also supports a safer route for faster withdrawals between Base and Ethereum.

The full effect will depend on live network use. Base is still moving toward a final design based on stronger zero-knowledge proving.

Azul also adds Ethereum Osaka execution-layer changes, including the CLZ opcode and repricing updates. Base said most application developers should not need large code changes.

New Base clients replace older node software

The upgrade matters most for infrastructure teams. Node operators running older software must migrate to Base-native clients to stay in sync.

Azul moves Base to base-reth-node as its execution client. It also adds base-consensus as its consensus client.

Base documents say op-node, op-geth, op-reth, nethermind, and kona no longer support the upgrade. That makes migration required for affected operators.

Operators already using OP Reth through the Base node package can update without a full re-sync. Others may need to start again with base-reth-node.

Base says the new stack cut empty blocks by about “99%.” The count fell from nearly 200 per day to about two.

The network also reported several bursts of “5,000 transactions per second.” Those figures are internal network claims and should be read as reported results.

Base plans more upgrades after Azul

The Azul launch follows earlier crypto.news coverage on faster withdrawals and stronger proof security. The same reporting thread noted Base’s move toward its own stack.

Base still has more upgrades planned. The next releases are expected to focus on performance and user experience.

Native account abstraction is also on the roadmap. That change could make wallets and transactions easier for users over time.

The main angle for users is simple. Base wants its Coinbase-backed Ethereum layer 2 to become faster and less dependent on one proof system.

Texas is moving closer to holding Bitcoin directly, after opening a search for a custody and liquidity provider for its Strategic Bitcoin Reserve.

Meanwhile, the state wants to shift its reserve from BlackRock’s iShares Bitcoin Trust into directly held Bitcoin through a third-party custody structure.

Texas seeks crypto custodian for Bitcoin reserve

The Texas Comptroller of Public Accounts posted the request for proposals on May 7. The document seeks qualified firms to provide custody and liquidity services for the Texas Strategic Bitcoin Reserve.

Currently, the reserve has about $10 million in Bitcoin exposure through IBIT. The ETF was used as an interim structure while Texas prepared the systems needed for direct custody.

The selected provider will help the state buy, hold, manage and report Bitcoin and other qualifying crypto assets. The RFP also calls for secure asset storage in the name of the State of Texas.

The contract would also cover liquidity services. That means the provider must support Bitcoin purchases and sales for the reserve when needed.

Texas plans shift from IBIT to direct BTC

The RFP sets out a transition plan from ETF exposure to directly custodied Bitcoin. The selected firm is expected to support the move within 60 days of contract execution.

This marks a change in how Texas plans to manage the reserve. IBIT gives the state price exposure to Bitcoin, but direct custody would place the coins under a structure arranged for the state.

The procurement document also calls for institutional-grade security. Required services include key management, operational controls, reporting, and secure custody tools.

The reserve may also include other qualifying cryptocurrencies over time. However, Bitcoin remains the main asset named in the current reserve structure.

Advisory committee will guide reserve controls

Acting Texas Comptroller Kelly Hancock also named members of the Texas Strategic Bitcoin Reserve Advisory Committee. The panel will advise on how the reserve is managed.

The committee includes Laurie Dotter, Jamie McAvity, Carla Reyes, and Gary Vecchiarelli. Their backgrounds cover investment management, Bitcoin mining, digital asset law, finance, and public company governance.

DxSale has suffered a $7.3 million exploit after an attacker allegedly used a hidden backdoor in a liquidity locker contract to withdraw BNB locked by more than 1,400 liquidity providers on the BNB Chain.

According to blockchain security firm PeckShield, the attacker-controlled address “0xC457” moved approximately $1.87 million worth of BNB into two primary wallets before sending the funds to multiple deposit addresses associated with Binance.

The incident affected liquidity that had remained locked in DxSale contracts since the platform was widely used for token launches on BNB Chain in 2021.

Early findings from blockchain analyst Tahax suggest the exploit may have originated from a contract ownership change that took place months before the attack.