Crypto World
Kalshi and Game Point Capital Launch Sports Hedging Partnership
TLDR
- Kalshi has partnered with Game Point Capital to offer sports risk hedging solutions for teams and players.
- The deal focuses on hedging performance bonus payouts tied to milestones like playoff berths or championships.
- Kalshi’s CEO Tarek Mansour highlighted the advantages of exchanges in expanding liquidity and bringing competition.
- Game Point Capital specializes in sports insurance and has already executed hedges for NBA teams using Kalshi’s platform.
- Kalshi experienced a surge in trading volume, reaching over $1 billion during Super Bowl Sunday in early 2026.
Kalshi, a leading prediction marketplace, has entered the institutional sports risk hedging space with a new partnership. The collaboration with broker Game Point Capital will allow teams to hedge performance bonus payouts. This deal comes after Kalshi recorded over $1 billion in trading volume during Super Bowl Sunday.
Kalshi’s Partnership with Game Point Capital
Kalshi’s recent deal with Game Point Capital marks a significant expansion into the sports insurance market. Game Point focuses on team and player performance bonus coverage, an area that has grown significantly in recent years. By partnering with Kalshi, Game Point aims to bring more liquidity and transparency to the industry, which has traditionally been dominated by opaque, over-the-counter reinsurance markets.
Kalshi CEO Tarek Mansour highlighted the advantages of using exchanges like Kalshi for hedging.
“Exchanges are a better alternative because they expand liquidity and bring competition,” Mansour wrote in a post on X.
This partnership offers an institutional solution to traditional markets and is expected to generate millions in trading volume from Game Point’s contracts alone in the coming months.
Kalshi has recently seen a surge in sports trading volume, contributing to the platform’s overall growth. The company reported a significant spike in activity beginning with the 2025 NFL season. By Super Bowl Sunday, Kalshi had processed over $1 billion in trades, showing how quickly sports have become the platform’s dominant sector.
The rapid growth of Kalshi is in line with the broader rise of sports betting in the United States. Companies like DraftKings are also seeing record revenues, particularly from states where traditional betting is still restricted. Kalshi’s ability to offer diverse trading options for major events like the Super Bowl has positioned it as a competitive player in the market.
Kalshi Faces Regulatory Challenges Amid Record Trading Volumes
Despite the strong growth, Kalshi is facing legal hurdles that could impact its future operations. The company is currently appealing a ruling in Nevada, where regulators have demanded compliance with state gaming rules. Kalshi also faces litigation in Massachusetts, where a court ruled that the platform cannot offer sports contracts without a state gaming license.
At the same time, Kalshi is challenging a cease-and-desist order from Tennessee, which temporarily halted its operations in the state. These legal battles come as the company continues to experience record trading volumes, including $9.6 billion in January 2026 alone.
Ether holds $2,000, but may remain under pressure as traders watch corporate earnings, US government debt and growing global tensions.
Key takeaways:
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Institutional demand for Ether is cooling as investors shift toward the safety of short-term US government bonds.
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High interest rates and rising ETH supply make the current staking yield less attractive for long-term holders.
Ether (ETH) price has failed to sustain levels above $2,150 since Feb. 5, leading traders to fear a further correction. Investor sentiment deteriorated following outflows from Ether exchange-traded funds (ETFs) and increased demand for put (sell) options.
US-listed Ether ETFs saw $242 million in net outflows between Wednesday and Thursday, reversing the trend from the prior two days. The institutional demand that followed the 20% Ether price recovery after the $1,744 bottom on Feb. 6 has faded as investors noted inconsistency in US economic growth—evident by the growing demand for short-term US government bonds.
Yields on the US 2-year Treasury declined to 3.42% on Friday, nearing the lowest levels seen since August 2022. The higher demand for government-backed debt reflects traders’ expectations of further interest rate cuts by the US Federal Reserve (Fed) throughout 2026. Signs of economic stagnation reduce inflationary risks, paving the way for expansionist measures.
Regardless of macroeconomic trends, Ether has underperformed the broader cryptocurrency market, causing traders to question if Ethereum still has what it takes to compete against networks that offer base layer scalability and faster onchain activity.
Traders fear that ETH price is destined for more downside, but data seems to reflect the recent price weakness rather than the anticipation of a further crash.
Ether price declined 38% in 30 days, which negatively pressures the network’s fees and ultimately reduces incentives for staking. Long term holding is a critical component for sustainable price growth, and the current 2.9% staking yield is far from appealing, considering the US Fed target rate stands at 3.5%. Furthermore, the ETH supply is growing at an 0.8% annualized rate.
ETH derivatives metrics reflect traders’ fear of further price drops
Professional traders are not comfortable holding downside price exposure according to ETH derivatives metrics, which further reinforces the bearish sentiment.
The ETH options delta skew stood at 10% on Friday, meaning put (sell) options traded at a premium. The increased demand for neutral-to-bearish strategies causes the indicator to move above the 6% threshold, which has been the norm for the past two weeks. Traders’ mood reflects a six-month bear market as ETH trades 58% below its all-time high.
Related: Crypto investor sentiment will rise once CLARITY Act is passed–Bessent
From a broader perspective, a mere $242 million in Ether ETF outflows represents less than 2% of the total $12.7 billion in assets under management; hence, traders should not assume that ETH price has entered a death spiral. Investors’ morale will eventually recover as the network remains the absolute leader in Total Value Locked (TVL).
Traders’ attention will likely remain centered on corporate earnings results and whether the US government will be able to refinance its debt amid growing global socio-economic tensions. Under this scenario, ETH price will likely remain pressured regardless of onchain and derivatives metrics.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
Ether continues to hover near the $2,000 area, but the bulls facesheadwinds from a suite of macro and market dynamics that could cap any bounce. Traders are parsing corporate earnings guidance, the trajectory of US government debt refinancing, and mounting global tensions that can keep risk assets on a sensitive leash. After a brief rebound earlier in February, Ether has struggled to muster sustained upside as funding costs stay elevated and investors rotate toward liquidity in short-term Treasuries. The balance of on-chain activity, investor sentiment, and macro indicators will likely determine whether $2,000 acts as a magnet or a battleground for the next leg of this cycle.
Key takeaways
- Institutional demand for Ether is cooling as investors shift toward the safety of short-term US government bonds.
- High interest rates and rising ETH supply make the current staking yield less attractive for long-term holders.
- US-listed Ether ETFs posted net outflows, underscoring a shift in liquidity away from Ether-related products in the near term.
- Markets are pricing in the potential for further rate cuts by the Fed in 2026, as signs of economic stagnation temper inflationary risks.
Tickers mentioned: $ETH
Sentiment: Bearish
Price impact: Negative. Ether is facing renewed downside pressure amid macro headwinds and fading ETF inflows.
Market context: The broader crypto landscape remains heavily correlated with macro liquidity and risk sentiment. As investors reassess growth trajectories and central bank paths, flows into Ether ETFs and related instruments have become a bellwether for institutional appetite. With the 2-year US Treasury yield echoing the low- to mid-3% regime seen in recent sessions, traders anticipate a possible easing cycle later in the year, a dynamic that often trades off against appetite for higher-risk, high-utility assets like Ether.
Why it matters
Ether’s ability to sustain price strength is intimately tied to both on-chain economics and external financial conditions. The network’s staking yield—already a focal point for long-term holders—faces increased scrutiny as the annual ETH supply growth persists at roughly 0.8%. Against a backdrop of a stagnant or sluggish macro backdrop, a 2.9% staking yield becomes less compelling for risk-averse investors when the Fed’s target rate sits higher, and bond markets offer a comparatively safer carry. This dynamic can dampen the incentive to stake, potentially dampening network security metrics and long-term price resilience if the flow of fresh ETH to stake is subdued.
Market momentum has also been influenced by ETF mechanics. Recent outflows from US-listed Ether ETFs, totaling around $242 million over a short window, have erased earlier inflows that followed Ether’s bottoming around the mid-$1,700s in February. Although the outflows represent a fraction of total assets under management, they signal a shift in sentiment among institutional participants who previously sought exposure through regulated wrappers. Net flows matter because they influence price discovery and liquidity, especially in a market where players weigh the relative safety of traditional assets against the potential upside of a more scalable and active network.
From a technical and derivatives perspective, traders have grown more cautious. The options market shows a tilt toward downside protection, with the delta skew for Ether options tracing above longer-term averages as investors pay a premium for put-driven hedges or neutral-to-bearish bets. This mood aligns with the observation that the asset trades substantially below its all-time highs, and even a mid-cycle recovery may be met with sellers who view rallies as opportunities to exit risk exposure.
Even as macro narratives push risk-off tendencies, Ether’s position as the leading smart contract platform remains intact in terms of activity and TVL leadership. Yet, the near-term price path hinges on a confluence of factors: corporate earnings resonance, the pace of debt refinancing, and the macro impulse toward or away from expansionary fiscal measures. The market is also watching policy signals and potential regulatory clarity that could influence appetite for crypto assets overall. In parallel, other networks offering base-layer scalability and faster on-chain throughput keep pressuring ETH’s relative competitive stance, particularly when investors seek higher efficiency at a similar risk profile.
Overall, the market narrative remains cautious. Traders acknowledge that a meaningful downside could be tempered by supportive macro cues or favorable liquidity conditions, but the immediate trajectory appears tethered to external events rather than purely on-chain developments. In this environment, Ether’s price reactivity is likely to depend on the collectivity of earnings surprises, debt management decisions, and the speed at which risk appetite re-emerges after episodes of volatility.
What to watch next
- Upcoming corporate earnings season and guidance revisions that may influence broader risk sentiment.
- US government debt refinancing milestones and any shifts in fiscal policy that affect liquidity conditions.
- Net ETF flows for Ether products in the next reporting period and any changes in investor allocations.
- Macro data releases and Fed commentary that could solidify or alter expectations for rate cuts in 2026.
- On-chain activity and staking metrics that could alter the relative attractiveness of ETH staking over time.
Sources & verification
- US-listed Ether ETF net flow data and related commentary from market trackers and issuer analyses.
- Pricing and yield data for the US 2-year Treasury, with context on regime expectations for Fed policy.
- Historical ETH price actions, including the February bottom around $1,744 and subsequent recovery patterns.
- Derivatives metrics for ETH, including delta skew readings from Deribit via data providers.
- On-chain and market commentary describing total value locked and network leadership dynamics in short- to mid-term cycles.
Ether under pressure as macro cues weigh on ETH
Ether (Ether (CRYPTO: ETH)) has spent recent sessions hovering near the $2,000 level, with constraints on a sustained move above roughly $2,150 since early February. The hesitation is not solely technical; it reflects a complex interplay between macro policy expectations, investor risk appetite, and the evolving structure of liquidity in crypto markets. After a brief bounce off a February trough around the mid-$1,700s, Ether’s price action has cooled as traders reassess the durability of any rally in the face of higher funding costs and competing opportunities in fixed income.
One of the critical macro signals comes from the bond market. The US two-year Treasury yield has moved toward the lower end of its range, around the 3.4% area, signaling that participants anticipate a more accommodative stance from the Federal Reserve in the coming years. This shift in rate expectations tends to push investors toward safer assets, including government debt, and away from higher-beta risk assets like Ether. The dynamic is reinforced by growth signals that, at least in the near term, point toward a more tepid expansion, which reduces inflationary pressure and can further support a cautious easing bias by the Fed.
In the near term, the ETF landscape remains a focal point. After a period of resilience, US-listed Ether ETFs posted net outflows that overshadowed earlier inflows tied to the recovery from the February dip. The outflows—calibrated against a substantial asset base—suggest that some institutional participants have scaled back their near-term exposure, contributing to soft price action. This is particularly relevant given that the broader crypto market often tracks risk-on/risk-off sentiment as much as, if not more than, internal on-chain metrics.
On-chain and derivatives metrics offer a complementary view of sentiment. The ETH options market has shown elevated demand for hedges, with the delta skew for 30-day options remaining elevated and indicating a willingness among professional traders to pay for protection against downside moves. The dataset, drawn from sources measuring the put-call balance, underscores a prevailing mood of caution among market participants who are mindful of the higher probability of further drawdowns given the current macro backdrop. This sentiment aligns with the six-month bear-market narrative, as Ether trades well below its all-time high and investors weigh the risk/reward of staking versus holding for appreciation.
Supply dynamics also weigh on the long-term narrative. Ether’s annualized supply growth sits modestly positive, while the immediate yield offered by staking remains modest in comparison to the prevailing interest rate environment. For long-term holders, the attractiveness of staking becomes a function of both yield and the perceived safety of ETH as a platform with continued innovation and network effects. The tug of war between yield, risk, and network activity will help determine whether staking becomes a stronger driver of price stability or a source of selling pressure if yields fail to outpace risk premia in traditional markets.
Market leadership in on-chain activity and TVL remains a strength of the Ethereum ecosystem, which helps to anchor Ether’s longer-term narrative even as near-term price action exhibits caution. However, the combination of macro sensitivity, ETF flow dynamics, and derivatives positioning means that the path forward is likely to be incremental rather than transformative in the near term. Investors will be watching not only macro indicators and corporate earnings but also regulatory clarity and liquidity shifts that could redefine the risk landscape for crypto assets in the months ahead. The outcome will shape whether Ether can regain momentum or continue to trade in a constrained range as the market reconciles macro expectations with the evolving use cases on Ethereum’s network.
For readers tracking the broader macro and on-chain narrative, the next few weeks will be telling. If inflation eases more rapidly than anticipated or if the Fed signals a clearer path toward rate cuts, risk appetite could stabilize and support a healthier Ether environment. Conversely, if growth indicators surprise to the downside or if liquidity conditions tighten further, ETH could test new near-term lows as traders search for safety and retreat from higher-risk exposures.
Shiba Inu Coin price has crashed into a bear market, moving from a high of $0.00004565 in March 2024 to the current $0.0000060, and activity in the futures market points to more downside.
Summary
- Shiba Inu Coin price has dived, with its market cap falling from $41 billion to $3.7 billion.
- The futures open interest has continued falling in the past few months.
- Its weighted funding rate has remained in the red since February 5.
Shiba Inu (SHIB), the biggest meme coin on Ethereum (ETH), was trading at $0.0000060, with its market cap falling from a record high of over $41 billion to $3.7 billion today.
Data compiled by CoinGlass shows that the futures open interest has continued falling this year. It moved to just $61 million, down substantially from last July’s high of over $400 million.
Open interest is a crucial metric that measures unfilled orders in the futures market. A higher open interest when a coin is rising is a sign of increasing investor demand.
The broader open interest in the crypto market has dived in the past few months following the $20 billion liquidation event in October last year. This is one of the top reasons why Bitcoin and most altcoins have dropped.
Meanwhile, Shiba Inu’s weighted funding rate has remained in the red since February 5. A funding rate is a key data that looks at the small fee that longs and shorts in the futures market pay to hold their positions. In most cases, a falling figure indicates that traders anticipate the price will be lower.
Shiba Inu’s burn rate has dropped substantially in the past few days. It fell by over 99% on Thursday to just 483 coins, worth less than $1 were burned in the last 24 hours.
The biggest risk that SHIB faces is that it has now major catalyst that may push it higher. In addition to the falling burn rate, Shibarium’s activity has dwindled, with its total value locked falling to $856,000.
Shiba Inu Coin price technical analysis
The three-day chart shows that the SHIB price has dropped sharply in the past few months. It has constantly formed a series of lower lows and is now hovering at its lowest level since 2023.
The coin has tumbled below all moving averages, while the Relative Strength Index has formed a descending channel. It also remains below the Supertrend indicator.
Therefore, the most likely SHIB price is bearish as demand remains thin. This crash may have it move to the next key support at $0.00000050.
BlockTower founder Ari Paul believes the crypto markets are at a critical crossroads, facing two potential outcomes.
Summary
- The market may have already reached its peak, with slow real-world adoption and mixed results from initiatives like El Salvador’s Bitcoin experiment.
- Despite the downturn, Bitcoin and crypto remain attractive to speculative investors, with growing development and potential for a renewed rally.
- Bitcoin’s sustainability may be at risk if prices stagnate, with diminishing block rewards and pressure on the broader crypto industry, especially exchanges and custodians.
Paul outlined that one possibility is that the crypto market has already reached its peak, particularly for this generation of digital assets. Crypto has benefited from strong tailwinds such as mainstream awareness, political support, and relaxed regulations. However, real-world adoption has been slow, with initiatives like El Salvador’s Bitcoin experiment and various corporate trials yielding mixed results. This suggests that further downside remains possible, especially if large liquidation events occur.
On the other hand, the ongoing market downturn could be part of a larger, macro-driven correction within a broader upward trend. In a world increasingly distrustful of fiat systems, Bitcoin (CRYPTO: BTC) and other cryptocurrencies remain attractive to speculative investors. Development continues, niche adoption is expanding, and a new narrative could reignite market momentum. With excess leverage and optimism recently purged, Paul believes the fundamentals may be quietly improving, setting the stage for another upward move driven by coordinated capital flows.
Given these possibilities, Paul advocates for a moderate allocation to crypto, citing the potential for asymmetric upside. However, he also acknowledges the risk of a deeper crash, with prices possibly falling to the $15,000–$40,000 range before any sustained recovery. Currently, Paul is long during the bounce and plans to reassess his position around the $90,000 Bitcoin level.
Paul also raised concerns about Bitcoin’s long-term viability. If BTC stabilizes without significant price growth, the decline in block rewards could put pressure on the network’s security budget. The broader crypto industry, which relies heavily on speculative inflows and transaction-based revenue models, could face significant strain in a stagnant price environment. In this case, Bitcoin might persist as a niche or collectible asset, but at lower valuations, with many holders potentially exiting if the upside appears capped.
Crypto World
Crypto Flows Tied to Suspected Human Trafficking Reached ‘Hundreds of Millions’ in 2025: Chainalysis
The payments represent an 85% year-over-year increase, according to the report.
Cryptocurrency payments tied to suspected human trafficking services rose 85% in 2025, reaching hundreds of millions of dollars, according to a new report from Chainalysis.
Much of the activity is linked to groups operating in Southeast Asia, the report said, adding that nearly half of transactions from Telegram-based “international escort” services were for over $10,000.
Researchers also found that most payments in these networks were made using stablecoins, while other categories, such as CSAM vendors, used more Bitcoin or privacy coins (specifically Monero) for laundering. “Instant exchangers, which provide rapid and anonymous cryptocurrency swapping without KYC requirements, play a crucial role in this process,” the report reads.
The findings underscore how trafficking networks (and illicit actors in general) are increasingly relying on cryptocurrency to move funds faster and operate around the world.
Chainalysis looked at several types of activity, including escort services, recruitment agents tied to forced labor, prostitution, and vendors selling child pornography. The firm also found payments spanning the Americas, Europe, and Australia.
Still, despite the rise in activity, the firm said cryptocurrency use could also help investigators because of its transparency, making it easier for authorities to trace funds and identify both suspicious and known patterns in pricing. “Standardized pricing models create identifiable transaction patterns that investigators and compliance teams can use to detect suspicious activity at scale,” the report reads.
Looking ahead, Chainalysis said trafficking networks will likely keep evolving their tactics, but better pattern-recognition tools and efficient cooperation between crypto companies and authorities could help detect and disrupt these operations.
TLDR:
- Zero launches with 165 blockchain connections through LayerZero’s existing messaging infrastructure.
- DTCC, ICE, and Citadel partnerships bring $3.7 quadrillion in annual securities clearing to the platform.
- Real-time ZK proof system enables transaction finalization in seconds versus traditional batching delays.
- Three specialized zones handle general computing, private payments, and trading with 2M TPS capacity each.
LayerZero has announced Zero, a new Layer 1 blockchain designed to address institutional barriers in digital asset adoption.
The network features three specialized zones for general computing, private payments, and trading infrastructure. Zero leverages LayerZero’s existing interoperability protocol to connect with 165 blockchains at launch.
Major financial institutions including DTCC, ICE, and Citadel have announced partnerships with the platform.
Technical Architecture Addresses Scalability Constraints
Traditional blockchain networks face performance limitations because every validator processes identical transactions.
According to analysis from Delphi Digital, “blockchains are slow because every node does the same work.” This redundant design ensures security but restricts throughput across the network. Zero implements a different model that separates transaction execution from verification processes.
The platform employs a smaller group of block producers to execute transactions and generate zero-knowledge proofs.
Validators then verify these proofs rather than re-executing every transaction. Delphi Digital notes that validators download “less than 0.5% of actual block data,” which lets the network scale without forcing all participants to operate expensive hardware infrastructure.
LayerZero rebuilt the technology stack across multiple layers to eliminate bottlenecks. The system includes QMDB for storage operations, FAFO for parallel execution, SVID for networking functions, and Jolt Pro for proof generation.
FAFO manages parallel compute scheduling. LayerZero claims their system “achieves over 1 million transactions per second” through this architecture.
Proof generation represents the most challenging technical component. Current zero-knowledge systems batch thousands of transactions to offset computational costs, creating delays in finalization.
LayerZero addresses this through real-time proving technology. The company states its Jolt Pro system “can generate proofs fast enough for transactions to finalize in seconds.”
This approach could eliminate latency issues that currently limit zero-knowledge chains in high-frequency applications.
Institutional Partnerships Signal Market Strategy
Zero operates as a standalone L1 that integrates with LayerZero’s messaging protocol. The network maintains EVM compatibility, allowing developers to deploy existing Solidity contracts without modifications.
Each of Zero’s three zones shares a common settlement layer while executing independently. LayerZero claims “each zone can handle 2M TPS with horizontal scaling as more zones are added.”
Tether’s USDt0 stablecoin already runs on this infrastructure. Delphi Digital reports the token has moved “over $70 billion in crosschain transfers since launch.”
This existing adoption demonstrates the network’s operational capacity before the broader Zero platform launches.
The project secured partnerships with established financial institutions on the same announcement day. DTCC clears $3.7 quadrillion in securities annually and operates core settlement infrastructure for U.S. markets.
ICE owns the New York Stock Exchange and manages trading platforms across multiple asset classes. Citadel ranks among the largest market makers globally, handling substantial daily trading volume.
Delphi Digital observes that “institutions want blockchain rails but won’t use what exists.” Fragmentation across multiple chains and transparent transaction records prevent many institutions from adopting existing platforms.
The payments zone incorporates privacy features designed to meet confidentiality requirements for institutional money movement. This positions Zero as infrastructure for regulated entities rather than retail cryptocurrency users.
Grayscale Investments has reportedly submitted an S-1 application to the Securities and Exchange Commission for an AAVE spot exchange-traded fund, according to regulatory filings.
Summary
- The largest digital asset manager has previously filed applications for various digital asset investment products.
- AAVE, a decentralized finance protocol, has recently drawn attention following a governance vote on decentralizing its operational structure.
The filing comes as AAVE, a decentralized finance protocol, has drawn attention following a governance vote on decentralizing its operational structure. The proposal received support from the AAVE community, according to reports.
Grayscale, the largest digital asset manager, has not released additional details regarding the timing or structure of the proposed ETF.
The company manages billions of dollars in cryptocurrency assets and has previously filed applications for various digital asset investment products, including spot Bitcoin and Ethereum ETFs that received SEC approval in recent years.
AAVE is a lending protocol that allows users to borrow and lend cryptocurrencies without intermediaries. The token serves as the governance mechanism for the protocol’s decentralized autonomous organization.
Key Insights
- UK Treasury chose HSBC Orion to test blockchain issuance and settlement for digital gilts in a controlled environment.
- The DIGIT pilot targets near real-time settlement and lower operational costs across the UK sovereign bond market.
- Parallel regulatory scrutiny continues as UK authorities monitor crypto-linked ETN access for retail investors.
UK Treasury has announced that HSBC is the platform provider to its Digital Gilt Instrument (DIGIT) pilot. The ruling upholds the proposal of the government to modernize the issue of sovereign debt issuance through distributed-ledger technology. Officials confirmed the appointment on February 12, 2026, following a competitive procurement process launched in late 2025.
🇬🇧 NEW: 2026 is marking the year of “Operationalizing Digital Debt” as the UK Treasury and HSBC move to tokenize Great Britain’s sovereign bonds.
Aims to test on-chain settlement and over-the-counter trading capabilities. pic.twitter.com/QReRyBCLss
— Nathan Jeffay (@NathanOnCrypto) February 12, 2026
The pilot will run within a regulated sandbox. It will allow authorities and market participants to test how digital gilts function across issuance, trading, and settlement. Policymakers expect the trial to provide operational evidence before any wider market rollout.
HSBC Orion Selected for DIGIT Pilot
HSBC will deploy its Orion blockchain platform as the core infrastructure for the DIGIT initiative. Orion already supports multiple large-scale digital bond issuances across Europe and Asia. These include sterling-denominated and green bond transactions for public-sector issuers.
The Treasury intends to make gilts digitally native through DIGIT instead of being tokenized replicas. The platform will enable the use of on-chain settlement that can reduce the settlement period of days to minutes. This model could also minimize reconciliation of intermediaries.
The pilot is consistent with the overall capital markets approach of the government. In 2024, Chancellor Rachel Reeves announced an intention to bring about the use of DLT in the UK gilt market. The DIGIT trial will be a pragmatic move in that direction, and existing regulatory control will be maintained.
Market Context and Regulatory Signals
Blockchain-based bond settlement can improve transparency and operational efficiency. Market participants can track ownership changes directly on a shared ledger. This structure may also widen participation by lowering technical barriers for investors and dealers.
The DIGIT announcement follows increased regulatory interest in digital asset exposure. It has been reported that Trading 212 enabled UK retail investors to access crypto-linked exchange-traded notes without appropriate approval. The regulators insist that firms must possess certain authorization to provide such products based on debentures.
In October 2025, the UK regulators removed a ban on retail crypto ETNs that existed since the 19th century. Regulators have since increased the level of supervision to keep the firms accountable to the rules of conduct. Together, these developments show a dual approach: encouraging financial innovation while maintaining strict market controls.
The regulatory dispute shaping crypto markets intensified as lawmakers push the CLARITY Act, a proposal aimed at reconciling jurisdiction between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) while introducing a formal taxonomy for digital assets. In this environment, White House crypto adviser Patrick Witt argued that allowing stablecoin reward programs offered by crypto platforms should not threaten traditional banks, urging room for compromise between the industry and incumbents. He described the current clash over stablecoin yields as “unfortunate,” insisting that platforms can offer yield products without disrupting existing bank models. A key line of debate centers on whether such yields amount to an unfair advantage or a natural extension of crypto services that banks are already pursuing through OCC charters.
Witt spoke publicly amid ongoing negotiations about the CLARITY Act, a comprehensive bill that would delineate regulatory authority between the SEC and CFTC and codify a framework for classifying crypto assets. He told Yahoo Finance that the industry and banks should be able to operate with shared, competitive product offerings, and that cooperation could unlock new services for customers while preserving financial stability. The interview underscored a broader stance within the administration: innovation should not be stifled, but it must be channeled through clear, enforceable rules.
“They can also offer stablecoin products to their customers, just the same as crypto. This is not an unfair advantage in either way, and many banks are now applying for OCC bank charters themselves to start offering bank-like products to their customers.”
As the debate continues, industry observers note that stablecoin yield programs—long a source of friction between crypto platforms and traditional banks—have become a focal point in how the market structures, and how lawmakers will eventually codify governance for digital assets. The tension has contributed to delays in passing the CLARITY market structure bill, even as proponents emphasize that regulatory clarity would reduce risk and foster legitimate growth. The discussion is not limited to the United States; its outcomes could influence international actors seeking a predictable framework for crypto activities and yield-bearing products.
The CLARITY Act is not just about power delineations; it is also about process. The proposal would establish a formal taxonomy for digital assets and set clear boundaries on which agency leads on what types of instruments. In doing so, it aims to reduce the ambiguity that many market participants say has slowed product development and investment decisions. Yet with the 2026 U.S. midterm elections looming, policymakers and industry executives warn that a shift in control or a politicized environment could derail momentum and threaten the timeline for implementing new rules.
Supporters of the bill have argued that the current regulatory haze is a drag on innovation and market integrity alike. Opponents worry about overreach and the potential for regulatory fragmentation to create compliance burdens. The administration’s line, echoed by Witt, is that a pragmatic path exists: a framework that protects consumers and ensures fair competition while allowing crypto firms to compete on a level playing field with traditional financial institutions.
The debate has drawn attention from high-level voices inside and outside government. Some officials warn that if the House shifts control or if the midterms redraw the political map, the chance to finalize the act could slip away, raising the specter of a regulatory rollback under future administrations. In the meantime, proponents are pushing to keep the window open, arguing that a timely compromise would deliver much-needed clarity and enable continued innovation in a sector that has already reshaped payments, asset custody, and yield strategies for many users.
As markets watch for signs of movement, Witt cautions that a sense of urgency remains essential. The White House Crypto Council has signaled a preference to have the CLARITY Act signed into law before the midterms absorb all policy energy, a reflection of how election cycles can impact regulatory priorities in Washington. The broader industry context remains one of cautious optimism tempered by the reality that policy change in this arena tends to unfold incrementally, with multiple committees, hearings, and competing priorities shaping the final form of any legislation.
Key takeaways
- The CLARITY Act seeks to resolve regulatory overlaps by defining clear jurisdiction for crypto markets between the SEC and CFTC and by creating an asset taxonomy.
- Stablecoin reward programs offered by crypto platforms have emerged as a central flashpoint in negotiations, affecting how banks perceive competition and the potential for OCC charters to offer similar products.
- White House and industry voices emphasize that allowing yield-bearing crypto products does not inherently threaten bank models and may spur collaboration between fintechs and traditional banks.
- The approach hinges on political timing: the 2026 U.S. midterm elections could derail momentum, prompting urgency from policymakers to secure legislation before the election cycle dominates attention.
- Market participants are watching for concrete signals on regulatory alignment, licence pathways for banks, and any new guidance from the White House Crypto Council ahead of meaningful legislative action.
- Beyond domestic debates, the outcome of CLARITY could influence global regulatory expectations and how exchanges, lenders, and wallets structure risk and compliance moving forward.
Sentiment: Neutral
Market context: The ongoing CLARITY discussions sit within a broader climate of regulatory scrutiny and evolving risk sentiment in crypto markets. Investors and institutions await a coherent framework that reduces ambiguity around asset classification, custody, and product permissions, all while remaining sensitive to political timelines and potential shifts in congressional control. As regulators debate jurisdiction, market participants recalibrate liquidity strategies and risk management practices in anticipation of clarity rather than ambiguity.
Why it matters
The core significance of these negotiations lies in the potential for a formal, nationwide framework that makes it easier for crypto firms to operate with confidence while offering consumers clearer protections. A codified taxonomy and clarified agency responsibilities would reduce the current patchwork of guidance, enabling more predictable product development and risk management for platforms that offer yield-based services tied to stablecoins. For banks, the debate tests their willingness to engage with digital-asset ecosystems in a way that preserves safety and soundness while exploring new revenue streams through regulated, bank-like products.
For users, regulatory clarity could translate into more robust consumer protections, standardized disclosures, and a more consistent set of custodial and settlement practices. For builders—exchanges, wallets, and fintechs—a stable, rule-based environment lowers compliance risk and potentially unlocks new partnerships with traditional financial institutions. Yet until legislation passes, the sector remains exposed to policy fluctuations, with funding cycles, product launches, and strategic investments hinging on regulatory signals rather than market fundamentals alone.
In a sector that has repeatedly demonstrated the rapidity with which innovation can outpace policy, the CLARITY Act represents more than a legal instrument; it is a test of the industry’s ability to coexist with traditional finance under a framework that seeks to prevent systemic risk. The administration’s emphasis on timely action underscores the stakes: jurisdictions, product categories, and the balance of powers in financial regulation are all at stake as negotiators weigh how to translate high-level principles into enforceable rules. The outcome could set a template for how the United States integrates crypto assets into the broader financial system, with potential ripple effects across markets, liquidity flows, and investor confidence.
What to watch next
- Progress in CLARITY Act negotiations in Congress, including committee votes and potential amendments (date-dependent).
- Election results and the political balance of the House and Senate in the 2026 midterms and their impact on crypto policy agendas.
- Official guidance or announcements from the White House Crypto Council regarding timelines for the bill’s signing or regulatory clarifications.
- Any movement on OCC charter applications or other pathways for banks to offer crypto-related, yield-bearing products to customers.
- Public disclosures or hearings that illuminate how the SEC and CFTC would implement the proposed asset taxonomy and jurisdictional boundaries.
Sources & verification
- What the CLARITY Act is actually trying to clarify in crypto markets — Cointelegraph
- White House crypto adviser says there’s no time to wait as CLARITY Act window closes — Yahoo Finance
- Delays in passing the CLARITY market structure bill — Cointelegraph
- White House crypto bill talks ‘productive,’ but no deal yet — Cointelegraph
Market reaction and key details
What the debate means for users and institutions
The conversations around the CLARITY Act reflect a pivotal moment for crypto policy: designers of the framework aim to secure a balance between encouraging innovation and maintaining financial stability. The tension over stablecoin yields reveals a deeper question about alignment between rapidly evolving digital-asset products and traditional financial services. As negotiators seek to codify roles and product allowances, market participants should monitor statements from policymakers and industry leaders, as these will influence funding choices, product roadmaps, and risk management practices in the near term.
Why it matters next
Regulatory clarity could enable more predictable product development and safer consumer experiences within the crypto-finance ecosystem. For lenders and exchanges, a clear taxonomy and jurisdictional split reduces the risk of misclassification and regulatory overlap, potentially easing cross-border participation and institutional involvement. For policymakers, the CLARITY Act offers a framework to reconcile innovation with oversight, aiming to prevent systemic risk while preserving competitive, diverse financial services in the digital asset space.
Bitcoin continues to exhibit choppy price action, fluctuating within the $60K–$70K range as the market remains in a clear state of indecision. With neither side establishing dominance, further consolidation appears to be the most probable scenario for the week ahead.
Bitcoin Price Analysis: The Daily Chart
On the daily timeframe, BTC’s rejection at the $70K level resulted in a gradual pullback toward the key $65K support area. The $70K region coincides with the midline of a multi-month descending channel, reinforcing its importance as both a structural and psychological supply zone.
A decisive reclaim of $70K, accompanied by a breakout above the channel’s midpoint, would be required to shift momentum and initiate a more sustainable bullish leg. Otherwise, Bitcoin is likely to remain confined within the $60K–$70K range until fresh demand or supply triggers a directional expansion.
BTC/USDT 4-Hour Chart
On the 4-hour timeframe, declining volume and overlapping candles reflect the market’s equilibrium state. The recent low-momentum drift lower suggests that neither buyers nor sellers are in firm control.
Price may continue to ease toward the $63K internal support level, where short-term stabilization could occur. More broadly, the $60K region remains the primary defense zone for buyers. Sustained accumulation around this level could eventually lay the groundwork for a renewed bullish attempt.
Sentiment Analysis
The 2-week liquidation heatmap on Binance shows Bitcoin trading between two major liquidity clusters that are likely to shape the next impulsive move. To the upside, a dense concentration of short liquidation liquidity is positioned between $78K and $82K, with additional buildup toward $85K.
A breakout above the intermediate $72K resistance could accelerate price toward this zone, potentially triggering a short squeeze if $80K is reclaimed. On the downside, liquidity remains relatively thin until the $60K–$62K region, which aligns with the recent swing low.
A decisive break below $60K could expose this pocket and lead to a deeper liquidation-driven move toward the mid-$50K area. For now, Bitcoin remains compressed between $72K resistance and $60K support. A breakout on either side is likely to trigger a volatility expansion, while continued range-bound movement would reinforce the current consolidation phase.
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