TLDR

• Circle shares surged nearly 50% within two sessions after the company reported fourth quarter earnings.
• Analysts said a short squeeze drove the rally rather than a change in the company’s fundamentals.
• Hedge funds had built large bearish positions before the earnings release, which led to rapid short covering.
• USDC circulation rose 72% year over year to $75.3 billion during the quarter.
• Circle reported a net loss of $70 million for 2024 compared with a net profit in the prior year.

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Circle shares surged nearly 50% within two sessions after the company released fourth quarter earnings on Wednesday. The rally followed an 80% decline from record highs reached last year and reversed recent losses. Analysts said short covering, rather than improved fundamentals, powered most of the advance.

Circle Earnings Trigger Short Squeeze

Circle reported strong growth in USDC circulation during the fourth quarter. The company said USDC supply reached $75.3 billion, up 72% year over year. However, analysts linked the sharp share price jump to hedge fund positioning.

Markus Thielen, founder of 10x Research, said positioning drove the move. He stated, “The magnitude of the move was not driven purely by the headline numbers.” He added, “The real catalyst was positioning,” and described the rally as a “high-probability short squeeze rather than a fundamental re-rating.” He estimated hedge funds lost about $500 million in one day on short positions.

Hedge funds had built large bearish bets before the earnings release. As the stock climbed, short sellers rushed to cover positions. Consequently, buying pressure accelerated and pushed shares sharply higher.

The surge broke a prolonged downtrend that had erased most of last year’s gains. Shares had fallen about 80% from prior record levels before the earnings report. The rapid rebound followed heavy trading volumes across sessions.

USDC Growth Contrasts with Profitability Decline

Circle’s flagship stablecoin, USDC, expanded in circulation during the quarter. The company reported $75.3 billion in USDC supply, which outpaced Tether’s USDT growth rate. Harvey Li, founder of Tokenization Insight, highlighted the supply increase in a research note.

Revenue from reserve income rose 58% to $2.64 billion. Circle earns reserve income mainly from U.S. government debt backing USDC. However, distribution costs climbed 66% to $1.66 billion during the same period.

Despite higher circulation, Circle posted a net loss of $70 million for 2024. The company had reported a $156 million net profit in 2023. Li said, “Stablecoin may be scaling; stablecoin issuance is a tough business.”

Japanese investment bank Mizuho raised its price target on Circle to $90 from $77. The bank cited stronger fourth-quarter results and growth linked to prediction markets. However, it kept a neutral rating and warned that lower rates could pressure reserve income.

Analysts Dan Dolev and Alexander Jenkins said revenue and profit exceeded expectations. Management pointed to prediction and betting platforms, including Polymarket, as drivers of USDC growth. Executives also described USDC as a potential default currency for AI agents in digital marketplaces.

Mizuho projected an average USDC circulation of about 123 million in 2027. The bank modeled reserve income near $3.7 billion and EBITDA of $916 million for that year. It applied a 24x EBITDA multiple and set a $90 price target.

Bloomberg is collaborating with Kaiko, a Paris-based digital asset market data provider, to make Bloomberg’s licensed financial data accessible directly within blockchain environments rather than through traditional offchain databases.

The companies said Thursday that the initiative is designed to address the challenge of inconsistent data across tokenized markets. 

In many tokenized asset ecosystems, companies may rely on different versions of pricing data, security identifiers or reference information, increasing the risk of discrepancies and operational inefficiencies.

By enabling a common, licensed data source to be embedded onchain, the collaboration aims to ensure that market participants reference the same dataset, potentially reducing reconciliation disputes and improving data integrity.

The first use case focuses on tokenized US Treasurys and repo markets operating on the Canton Network, a permissioned blockchain network designed for institutional financial applications. Kaiko launched that data on-ramp service in August.

The integration targets banks, asset managers and other regulated financial institutions experimenting with blockchain-based versions of traditional financial instruments, rather than retail crypto traders.

Questions around data reliability and market size in tokenized real-world assets (RWAs) have surfaced before.

In May, Cointelegraph interviewed Chris Yin, co-founder of RWA platform Plume, who said that the tokenized asset market may be significantly smaller than figures cited by some industry aggregators. At the time, Yin said the sector’s actual size was likely closer to half of what major data sources were reporting.

Related: Hong Kong to link new digital bond platform with regional tokenization hubs

Why data integrity matters for tokenized markets

Kaiko CEO Ambre Soubiran said institutional-grade data is essential for well-functioning financial markets, stating that the collaboration with Bloomberg “will extend the availability of market data used in traditional markets to now support the next generation of tokenized securities infrastructure.”

Kaiko expanded its footprint in the digital asset data sector with its 2024 acquisition of European crypto index provider Vinter, strengthening its presence in regulated benchmark and index services across Europe.

Reliable data has long been a priority in the digital asset industry, where market participants have relied not only on price feeds but also on onchain analytics and sentiment indicators to improve transparency. 

In tokenized markets, particularly those linked to real-world assets like Treasurys, consistent pricing data and reference information help ensure that onchain assets accurately mirror the underlying financial instruments.

Related: Aster’s quiet relisting on DefiLlama leaves ‘big gaps’ in data: Exec

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy

The Ethereum Foundation’s newly released “Strawmap” reads, at first glance, like something only a protocol researcher could immediately comprehend. It’s dense, diagram-heavy and packed with references to forks, zkEVMs and data availability sampling.

But beneath the technical language is a far simpler story: Ethereum — the second-largest blockchain with more than $200 billion market cap — is trying to decide what kind of infrastructure it wants to be by the end of the decade.

The ‘Strawmap’ — explicitly framed as a draft, not an official plan — sketches out Ethereum upgrades through 2029. It is not binding, but it signals where some of the network’s most influential researchers believe the base layer should head next.

“The Strawmap is largely independent from Ethereum governance… it’s a tool that helps inform R&D well ahead of Ethereum governance, potentially even years ahead,” Justin Drake, a prominent Ethereum Foundation researcher, told CoinDesk in an interview.

That direction has real consequences beyond core developers.

At the center of the document are five ambitions: near-instant transaction finality, dramatically higher throughput, built-in privacy, quantum-resistant cryptography and tighter integration between Ethereum’s base layer and its layer 2 ecosystem.

Stripped of jargon, the goal is straightforward: make Ethereum faster, more scalable, more private and durable enough to last a long time.

Today, Ethereum transactions are included in blocks quickly, but the point at which they are considered irreversible, known as finality, takes too long (roughly 16 minutes). For most casual users, that nuance is invisible. For exchanges, bridges and financial applications, it’s critical.

In a thread responding to the roadmap, Ethereum co-founder Vitalik Buterin laid out how that could change. “Today, finality takes 16 minutes,” he wrote, adding that the goal is to “decouple slots and finality” and move toward a system where “endgame finality time might be eg. 6–16 sec.”

Moving from minutes to seconds changes how comfortably large amounts of value can move across the network.

The Layer 2 debate

Earlier this month, Buterin argued that some of the assumptions behind the original layer 2 roadmap “no longer make sense” in their earlier form. Layer-2 networks were previously incorporated into Ethereum’s roadmap to scale the network by processing transactions off the main blockchain and settling them back to Ethereum, helping reduce congestion and fees.

However, as layer 1 or base layer scaling has improved and some rollups have taken longer than expected to decentralize, the idea that Ethereum would outsource most of its scaling burden entirely to L2s has become less clear-cut.

Instead, Buterin suggested a more balanced future — one where the base layer continues to strengthen while layer 2 networks evolve into more specialized roles, whether for privacy, specific applications or enhanced security models.

“Ultimately, we’re going to have finality in seconds,” Drake told CoinDesk, arguing that faster settlement will “help with bridging between the L2s” and improve user experience.

The Strawmap reflects that shift. It doesn’t necessarily say layer 2s will go extinct, but neither does it treat layer 1 as frozen. Instead, it builds on a stronger base layer, alongside improvements that enable significantly higher layer 2 capacity, which could be seen as a dual-track scaling strategy.

Privacy and quantum threat

Privacy marks another notable shift in the draft of the new roadmap.

Ethereum’s transparency has long been viewed as a positive, as every transaction is visible. But openness limits certain use cases. The Strawmap contemplates native “shielded” transfers at the base layer, which would allow ETH to move without exposing full transaction details publicly. For individuals, that’s a matter of financial discretion. For businesses, it could determine whether certain activities move onchain at all.

And then there’s the long game: post-quantum cryptography. Quantum computing remains a developing field, but if Ethereum is meant to secure trillions in value over decades, its security assumptions cannot remain static. The Ethereum Foundation recently brought together a post-quantum team, and the roadmap only shows that it continues to double down on these efforts.

For developers and businesses, the roadmap provides directional clarity. Ethereum has often been criticized for moving slowly or for perpetually delaying the timelines of upgrades. By publishing a multi-year sketch, researchers are signaling that the network’s next phase is not just about patching limitations.

Ethereum’s history, though, is full of ambitious timelines that are overstretched. Governance in a decentralized system ensures debate and revision. The Strawmap itself acknowledges it will evolve.

“For me, this is ultimately about Ethereum becoming the internet of value, and ether, the asset, becoming money for the internet,” Drake told CoinDesk.

Read more: Ethereum Foundation drops most ambitious roadmap in years, targets finality in seconds by 2029

Bitcoin has inched back toward the $70,000 mark, but traders remain wary as derivatives signals fail to echo the price recovery. On Wednesday, the benchmark cryptocurrency briefly touched the round level after a Tuesday dip to around $62,500, a move that was supported by a fresh wave of inflows into U.S.-listed Bitcoin ETFs. Yet the mood in the derivatives market stayed guarded: the annualized futures premium versus the spot price hovered near 2%, well below a neutral readings range, and options markets showed a cautious stance despite the price rebound. The combination of a tepid cycle in bullish bets and lingering macro and liquidity concerns suggests that bulls may need a more durable catalyst before revisiting higher targets, such as $75,000. For context, Bitcoin has been trading in a choppy corridor as market participants weigh the near-term risk-and-reward dynamics.

Bitcoin has retested the $70,000 level amid a broader risk-off environment that has cooled some of the enthusiasm that followed the earlier rally. Official data indicates that inflows into U.S.-listed Bitcoin exchange-traded funds helped stabilize sentiment over a two-day window, with net inflows of $764 million, partially offsetting $1.2 billion of outflows observed over the prior eight trading sessions. In practice, this signals that institutional demand can surface when prices experience sharper pullbacks, even if momentum remains fragile. The underlying caution, however, is underscored by the futures market where traders appear reluctant to extend bullish exposure through leverage, a sentiment that has persisted since late January when BTC briefly relinquished a long-standing $85,000 support level.

Analysts tracking the options surface point to a more nuanced risk posture. The 30-day delta skew on BTC options, a proxy for appetite to buy protection versus chasing gains, showed a 14% premium on put options relative to calls on the most recent session, indicating that risk-off hedging remained a priority for many market participants. Although this measure has moved away from the distress levels seen earlier in the week, it remains outside a balanced range, suggesting that professional traders prefer downside protection even as the spot price paused near $70,000. Data from Laevitas.ch, cited in the market commentary, also highlights that the two-month futures annualized premium persists well below the neutral threshold of 5%, with readings around 2% on Thursday.

Beyond pure price mechanics, a spectrum of theories has circulated about what’s keeping Bitcoin under pressure. Some observers have pointed to a potential exogenous shock—quantitative trading activity and internal market dynamics at major venues—that could have contributed to the recent volatility, including episodes linked to well-known trading desks. In particular, a highly publicized line of inquiry has centered on the activities of a prominent quantitative trading firm and its relationship to other liquidity channels in the ecosystem. While those theories have triggered debate, there is no conclusive public evidence tying any single entity to the broader price weakness. The narrative has nonetheless fueled ongoing market chatter about liquidity risk and cross-venue arbitrage.

Is a single entity behind Bitcoin’s price weakness?

Over the past several weeks, a constellation of explanations has circulated for the price pullback from multi-year highs. Some narratives trace the decline to macro headlines and risk-off sentiment, while others hinge on perceived vulnerabilities within the crypto liquidity stack. The discussion intensified when a market-catalyzing event earlier in the year coincided with a broader shift in institutional posture toward risk assets. In parallel, discussions about long-term security risks—some tied to advancements in quantum computing—reappeared in market commentary, prompting blockchain developers to explore on-chain post-quantum cryptography enhancements (for example, proposals centered on upgrading cryptographic resilience).

Within this broader debate, the possibility that several market actors are reconfiguring leverage and hedging strategies has drawn attention. Recent filings from major trading firms in the context of public equity positions have sparked speculation about delta-neutral approaches and how those strategies might intersect with crypto exposure. One notable thread has involved the public disclosures of holdings that intersect with Bitcoin-related instruments, underscoring how large players may be combining on- and off-chain positions to manage risk.

Meanwhile, price action has occasionally mirrored shifts in benchmark technology equities, with macro-driven risk-off moves weighing on speculative bets. A notable signal came from a sector that often correlates with sentiment across growth and tech equities: a sharp daily decline in a leading semiconductor stock, historically viewed as a bellwether for risk appetite. The implication is not that Bitcoin’s trajectory directly mirrors that stock, but that broader risk sentiment remains a powerful driver of crypto price behavior in the near term.

On the regulatory and governance front, the crypto community has kept a close eye on proposals aimed at strengthening on-chain security and resilience. Proponents of post-quantum readiness have advanced technical ideas, including on-chain upgrades that could reduce future exposure to quantum-related risks. While the market remains in a wait-and-see mode, these technical conversations underscore the industry’s ongoing effort to harden infrastructure in the face of evolving threats.

Another strand of the discourse centers on the role of major exchanges and liquidity providers in shaping market outcomes. In the wake of high-profile liquidations tied to oracle pricing and latency issues, industry participants have emphasized the importance of robust risk controls and transparent pricing mechanisms to prevent cascading effects during periods of stress. While it is difficult to attribute BTC’s price dynamics to a single cause, the confluence of macro headwinds, hedging demand, and structural liquidity considerations appears to be anchoring sentiment at a cautious level as traders monitor the path to the next price milestone.

The conversation around Bitcoin’s price trajectory continues to be informed by a mix of on-chain indicators, derivatives signals, and macro context. While the price flirted with the $70,000 zone, the absence of a broad-based acceleration in bullish bets, coupled with persistent hedging interest, suggests that a sustained move into higher territory will require more than a momentary price bounce. Investors and traders will be watching whether this resilience can translate into a clean breakout or whether the market remains tethered to a diplomatic, risk-aware stance as the year progresses.

Why it matters

The ongoing tension between price action and derivatives signals matters for a wide range of market participants. For retail traders, the current environment underscores the importance of risk management and positioning beyond simple directional bets. For institutions, the pattern of ETF inflows and hedging activity highlights the appetite for crypto exposure when prices pull back, while also signaling caution about leverage-driven risk during periods of volatility. Miners and token issuers watch these dynamics closely because sustained price strength could influence capital expenditure plans and liquidity provisioning.

From a broader market perspective, the narrative around Bitcoin cycles—how price recovers against a backdrop of risk-off sentiment and evolving on-chain security considerations—helps frame the trajectory for other digital assets. The confluence of derivatives mood, ETF flows, and major macro indicators can serve as a guide to the potential impulse needed to push liquid markets back into a more constructive regime. In this sense, Bitcoin’s near-term path remains a useful proxy for assessing risk appetite within the crypto sector and for calibrating expectations around liquidity and institutional engagement in the months ahead.

What to watch next

• Upcoming ETF flow data and their potential to sustain or extend recent inflows, particularly if prices test or breach key levels such as $75,000.
• Public disclosures and 13-F filings from major market participants that could signal shifts in delta-neutral strategies or crypto exposure across portfolios.
• Regulatory or technical updates aimed at post-quantum security on-chain, including any formal governance proposals or implementation milestones.
• Bitcoin volatility and option markets around major expiries, which could amplify price moves if hedging demand surges or wanes.
• Key macro developments that influence risk sentiment and liquidity conditions across traditional and digital-asset markets.

Sources & verification

• Bitcoin price and futures premium data cited from Laevitas.ch, including the annualized premium around 2% and the 5% neutral benchmark.
• Bitcoin put-call delta skew data from Deribit via Laevitas.ch, showing a 14% premium for puts on the latest session.
• Net flows into US-listed Bitcoin ETFs, with $764 million in two days of inflows and prior $1.2 billion of outflows.
• Market commentary referencing on-chain security discussions and post-quantum cryptography proposals (e.g., BIP-360 concepts).
• Industry observations on liquidity dynamics, exchange risk controls, and the impact of large-scale trading activity on price moves.

Market reaction and key details

The near-term narrative remains one of cautious optimism rather than a decisive bullish breakout. While price action has managed to flirt with the $70,000 threshold, the lingering fear in derivatives markets and the absence of broad bullish momentum point to a more nuanced transition phase for Bitcoin. Investors will be watching whether upcoming ETF inflows persist and whether major options expiries bring a clearer signal about the direction of risk appetite. In the meantime, Bitcoin (CRYPTO: BTC) continues to function within a spectrum of hedging considerations and risk-management strategies as market participants weigh the evolving balance of incentives and constraints facing the crypto sector.

Tickers mentioned: $BTC, $NVDA

Market context: The current environment reflects cautious risk sentiment across both crypto and traditional markets, with liquidity conditions and hedging activity shaping short-term moves as macro factors and regulatory considerations continue to influence pricing.

Why it matters: The interaction between ETF flows, futures hedging, and security-focused on-chain proposals determines how quickly the market can transition from a risk-off stance to a more constructive rally, with implications for traders, institutions, and developers alike.

Circle reported strong fourth-quarter results, and it widened the measurable gap in the regulated stablecoin market. The company posted sharp revenue growth, and USDC circulation reached new highs. Meanwhile, Ripple’s RLUSD operates from a far smaller base, and the contrast highlights shifting scale dynamics in dollar-backed tokens.

USDC Expands Revenue Base and On-Chain Footprint

Circle Internet Group increased total revenue and reserve income by 77% year over year in the fourth quarter of 2025. The company generated $770 million, and reserve income accounted for $733 million of that figure. Moreover, reserve income rose 69% from the prior year, even as yields moderated.

USDC’s average circulation doubled during the period, and that expansion supported higher aggregate reserve balances. However, reserve yield declined to 3.8%, reflecting a 68 basis point drop. Even so, larger balances offset lower yields, and overall income continued to grow.

Distribution costs without revenue climbed 136% to $309 million, yet margins improved to 40%. Net income from continuing operations reached $133 million, and adjusted EBITDA rose 412% to $167 million. As a result, Circle strengthened its operating profile while scaling distribution.

USDC closed 2025 with $75.3 billion in circulation, marking a 72% annual increase. In addition, on-chain transaction volume hit $11.9 trillion in the fourth quarter alone. That figure represented a 247% surge, and it underscored rising usage across exchanges and payment channels.

Circle issues USDC as a regulated dollar-backed stablecoin, and it holds reserves in cash and short-duration instruments. The company positions USDC as a compliance-focused alternative within the stablecoin sector. Consequently, growth in circulation directly expands reserve income capacity and reported earnings power.

RLUSD Operates from Smaller Capital Base

Ripple introduced RLUSD to expand its stablecoin presence within global payments and exchange markets. However, RLUSD’s market capitalization stands at $1.56 billion. Daily trading volume remains around $124 million, and that scale limits reserve income potential compared with USDC.

Unlike Circle, Ripple remains privately held, and it does not publish detailed quarterly financial statements. Therefore, direct profitability comparisons remain limited by available disclosures. Even so, the difference in circulating supply creates a clear quantitative contrast.

Stablecoin economics rely on reserve balances and prevailing yields, and larger supplies generally produce higher income. Because RLUSD circulates at a fraction of USDC’s size, its reserve base remains smaller. As a result, operating leverage and reported earnings capacity trail behind USDC’s scale.

Ripple integrates RLUSD into its broader payments network, leveraging established exchange relationships. The company built its reputation on cross-border settlement infrastructure, and RLUSD extends that model into dollar liquidity. Nevertheless, current data show that adoption levels remain significantly lower than those of USDC.

Market observers previously speculated about potential consolidation within the stablecoin segment, including reports about possible acquisition discussions. However, no confirmed transaction has reshaped the competitive landscape. Instead, current standings reflect organic growth and differing starting points.

USDC’s dominance rests on circulation size, reserve economics, and transparent reporting metrics. Meanwhile, RLUSD operates within Ripple’s global framework but from a narrower capital base. The competitive gap, therefore, reflects measurable differences in supply and income rather than structural capability constraints.

The Korean bid is becoming altcoin holders’ best friend these days, as Korean traders pile into new listings on the country’s leading centralized exchanges (CEXs).

Over the last week, South Korean CEXs Bithumb and UpBit listed two mid-sized altcoins, Centrifuge’s CFG and Espresso’s ESP, and both tokens surged. CFG rallied 177% from $0.088 to $0.24, and ESP jumped by 103% to $0.195.

The Bithumb and UpBit effects have become common at this point, and Korean CEXs have been responsible for plenty of one-time pumps in small- to mid-sized altcoins. While these CEX traders are happy to jump in and speculate on new listings, the effect usually wears off in a few days to weeks as volumes return to their pre-listing levels.

Korean CEX Bithumb also made headlines earlier this month after accidentally sending more than 200 users 2,000 BTC, worth $140 million at the time, instead of 2,000 WON.

The “airdrop” resulted in BTC dropping 18% below the actual market price on Bithumb as recipients rushed to sell the tokens and offramp the funds; however, the exchange successfully froze “most” of the accounts before funds could be withdrawn.

The Ethereum Foundation (EF) has shared a long-term plan, dubbed the “strawmap,” that outlines how Ethereum could evolve over the rest of the decade, with goals including faster transactions and higher capacity.

The roadmap lays out several possible changes across Ethereum’s core layers. If completed, it would mark the biggest evolution of the network since The Merge in 2022, which moved Ethereum from proof-of-work to proof-of-stake.

The plan underscores how Ethereum developers are preparing the network for more users and more activity by gradually improving speed, security, and reliability. Ethereum co-founder Vitalik Buterin described the roadmap as a “very important document” in a post on X.

Ethereum is currently the world’s largest smart contract blockchain, with more than $56 billion in total value locked (TVL) across decentralized finance, according to DefiLlama. Following the news, Ether (ETH) briefly moved higher. The token is currently trading at $2,030 – down about 2% on the day but still up more than 4% over the past week.

The Details

The strawmap outlines a long-term path with around seven forks through 2029. Justin Drake, a member of the EF Architecture team, explained in a post on X that the roadmap is built around five “north stars.”

These include making the main network faster through shorter block times and near-instant finality, increasing capacity to roughly 10,000 transactions per second on Layer 1, scaling Layer 2 networks to as much as 10 million transactions per second, introducing post-quantum cryptography, and adding native privacy through shielded ETH transfers.

“The strawmap is an invitation to view L1 protocol upgrades through a holistic lens,” Drake said. “By placing proposals on a single visual, it provides a unified perspective on Ethereum L1 ambitions.”

Meanwhile, Buterin described the roadmap as a gradual revamp of Ethereum’s core systems, in which slot times, consensus, and cryptography are replaced bit by bit rather than through a single large overhaul.

The new roadmap builds on Ethereum’s recent upgrades, including Fusaka, which launched in December 2025. That upgrade introduced the PeerDAS data availability system to help the network process more transactions while keeping fees low.

However, while the upgrade marked a major step in the network’s scaling strategy, cheaper transactions have also coincided with a rise in spam and address-poisoning attacks, The Defiant previously reported.

Anthropic CEO Dario Amodei publicly rejected the Pentagon’s demand on Thursday. The Defense Department wants unrestricted military use of the company’s AI technology. The deadline, just hours away, could see the $380 billion startup expelled from the US military’s supply chain.

The showdown marks the first time a major AI company has publicly defied a US government threat to seize control of its technology.

The Standoff

In a blog post published on Anthropic’s website, Amodei called the Pentagon’s threats “inherently contradictory,” noting that one designates Anthropic as a security risk while the other treats Claude as essential to national security.

“Regardless, these threats do not change our position: we cannot in good conscience accede to their request,” Amodei wrote.

The dispute centers on two conditions Anthropic placed on military use of Claude. The company bars autonomous targeting of enemy combatants and prohibits mass surveillance of US citizens. The Pentagon views these as unacceptable limitations on lawful military operations.

Anthropic said the Pentagon’s “final offer,” received overnight Wednesday, failed to address its core concerns. “New language framed as compromise was paired with legalese that would allow those safeguards to be disregarded at will,” an Anthropic spokesperson said in a statement, as reported by The Hill.

Defense Department spokesman Sean Parnell issued a public ultimatum on Thursday. He gave Anthropic until 5:01 pm ET on Friday to grant unrestricted access to Claude Gov — or face termination of the partnership and designation as a supply chain risk.

“We will not let ANY company dictate the terms regarding how we make operational decisions,” Parnell wrote on X.

Timeline of Escalation

On Tuesday, Amodei met directly with Defense Secretary Pete Hegseth, during which Pentagon officials outlined three consequences for noncompliance. First, removal from military systems. Second, supply chain risk designation that would bar other defense contractors from using Anthropic products. Third, the invocation of the 1950 Defense Production Act to legally compel the company to hand over its technology.

Amodei argued in the blog post that the refusal is also grounded in technical reality. “Frontier AI systems are simply not reliable enough to power fully autonomous weapons,” he wrote, adding that without proper oversight, such systems “cannot be relied upon to exercise the critical judgment that our highly trained, professional troops exhibit every day.”

Republican Senator Thom Tillis criticized the Pentagon’s handling of the dispute. “Why in the hell are we having this discussion in public? This is not the way you deal with a strategic vendor,” Tillis told reporters.

What’s at Stake

For Anthropic, the immediate exposure is a $200 million military contract. But the supply chain risk designation carries far broader implications. It would force every defense contractor to verify that they don’t use Anthropic products in their operations.

The competitive landscape is shifting fast. Elon Musk’s xAI signed a deal to use Grok in classified systems, according to Axios, accepting the ‘all lawful purposes’ standard for classified work. OpenAI and Google are accelerating negotiations to enter the classified space. Anthropic, once the only AI company cleared for classified material, risks losing that first-mover advantage entirely.

Why Crypto Should Pay Attention

The Pentagon’s willingness to invoke the Defense Production Act against a technology company sets a precedent that extends beyond AI. If the government can legally compel an AI firm to remove safety restrictions on national security grounds, the same framework could, in theory, be applied to compel crypto companies to modify privacy features or weaken transaction safeguards.

The standoff also strengthens the case for decentralized AI development. A centralized AI provider can be pressured — or legally compelled — to strip away guardrails at a government’s demand. That validates the thesis that decentralized alternatives offer more resilient infrastructure against state coercion.

Anthropic’s rapid growth has already raised concerns for crypto markets. The company’s $380 billion valuation and AI-driven disruption of traditional software revenue are putting pressure on private credit flows that correlate closely with Bitcoin.

Anthropic also has a historical link to crypto: FTX’s bankruptcy estate held a significant early stake in the company, which it later sold to help fund creditor repayments.

The Friday deadline will pass, but the real question begins after: whether the Pentagon follows through, and what that means for every technology company drawing a line between government contracts and product integrity.

Decibel, a perpetual derivatives decentralized exchange (DEX) incubated by Aptos Labs, launched its mainnet today alongside its official points program.

The DEX is starting with perpetual markets, before expanding to spot and real-world assets (RWAs), similar to the progression taken by market leaders Hyperliquid and Lighter.

According to a press release shared with The Defiant, Decibel’s testnet generated “over 1 million user trades per day” across more than 130,000 daily active users (DAU).

So far, the DEX has processed $6.4 million in volume since its mainnet launch and hosts $57 million in total value locked (TVL), according to DeFiLlama.

The DEX is based on a central limit order book (CLOB) model, and hosts its risk engine onchain, ensuring functions such as auto-deleveraging are directly verifiable via the block explorer.

While Aptos Labs incubated Decibel and the DEX is built on the Aptos Layer 1, the DEX also uses X-chain accounts to enable deposits from Ethereum and Solana.

The perpetual market remains red hot, with more than $730 billion traded across all DEXs in February, roughly the same amount traded throughout all of 2023. Activity has cooled off since volumes peaked at $1.37 trillion in October, but the sector remains one of the most popular in DeFi.

Brylee Whatley, the Head of the Decibel Foundation, told The Defiant, “On the acquisition side, Decibel has invested heavily in aligning incentives with real usage. Season 1 of our Amps points program is live and is designed to reward genuine trading activity. But incentives only get users through the door.”

“What keeps traders is trust in the system they are trading on. Everything on Decibel is transparent – the infrastructure, risk approach and liquidation logic. We built an exchange where serious traders feel confident deploying real capital,” they added.

While a majority of DEXs offer tokenized equity and commodity offerings, only HyperUnit’s TradeXYZ, Lighter’s tokenized Korean stocks, and Ostium have found sustained liquidity and success.

Whatley also touched on the future vision for Decibel as it enters the highly competitive tokenized RWA trading space, citing Aptos’ existing success in the world of RWAs and the chain’s global go-to-market reach.

“Imagine using tokenized RWA holdings – treasuries, equities, commodities – as collateral to trade perpetuals, or using your crypto portfolio to margin equity positions. That kind of cross-asset capital efficiency is impossible at a traditional brokerage and isn’t available on other DEXs,” Whatley concluded.

• Bitcoin price trades around $67,500.
• The asset rose to near $70,000 but is facing key resistance.
• Analyst Rekt Capital warns that it’s “premature” to say the current bear market is over.

Bitcoin price is hovering around $67,500 after retreating from highs near $70,000.

The spike to intraday highs on Wednesday saw chatter across ‘Crypto Twitter’ shift to the potential for BTC to have bottomed out and prospects of a sharp uptick.

While bullish sentiment continues to permeate the crypto market, one analyst is cautioning against “premature” calls of the bear market being over.

This even as US spot Bitcoin ETFs take fresh inflows to cut year-to-date outflows to under $2 billion.

Bitcoin retreats from $70k as analyst warns of further declines

Macroeconomic and geopolitical headwinds have meant Bitcoin has found it hard to break higher since recovering from lows near $60,000 reached in early February.

However, the bellwether crypto asset surged toward $70,000 ahead of Nvidia’s earnings report on Wednesday, February 25, 2026.

Like gains across equities, Bitcoin’s uptick benefited from anticipation around Nvidia’s earnings report.

But despite strong AI-driven results, stock futures stalled, and BTC pulled back, trading to around $67,500 as of writing.

Nvidia shares also fell, down more than 5% at open on Thursday. Reaction to the chip giant’s earnings beat impacted BTC.

Despite this pullback, many traders are upbeat after US spot Bitcoin ETFs snapped a recent losing streak, with over $750 million in net inflows over two days. The flip has the market trending with mixed signals.

Half a bil into bitcoin ETFs yesterday, biggest day in a while, +$750m over past two days, right as obituaries were being published. They needed it too, like a hitter in a slump going yard. YTD is now under $2b in outflows. Unclear still tho if this is legit start to rebound or… pic.twitter.com/hl6JQuFcyI

— Eric Balchunas (@EricBalchunas) February 26, 2026

However, according to crypto analyst Rekt Capital, it’s premature to say the bear market is over.

“The shortest Bitcoin Bear Market lasted 365 days. Bitcoin is currently ~140 days into its current Bear Market,” he posted on X, adding:

“Any talk of the Bear Market being over already is probably premature.”

Spot ETF inflows, on-chain metrics and macro shifts could be key factors in this cycle. But Rekt believes the technical picture says a lot.

In this case, the analyst points to historical cycle bottoms and BTC’s slide below the 200-week exponential moving average.

Even with recent inflows reversing recent outflows to a degree, institutional demand is low, and that could limit any upside.

#BTC

It’s very tempting to speak about Lengthening Cycles in a Bitcoin Bull Market

After all, nobody wants to see a sunny day end

It’s equally very tempting to speak about the Bitcoin Bear Market bottom already being near

Everybody wants Winter to end, and the sooner the… https://t.co/8bSxwKrdRx

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— Rekt Capital (@rektcapital) February 26, 2026

BTC price analysis

Technically, Bitcoin’s retreat from $70,000 exposes support at $68,000-$68,500.

With a breakdown to $67,500, bulls risk an acceleration toward $60,000.

Rekt shares this outlook by noting that bulls remain vulnerable as long as price fluctuates below the 200-week EMA.

The moving average has acted as resistance in previous bear markets, including in 2018.

“Ultimately, as long as Bitcoin remains below the 200-week EMA, history suggests price will favour additional downside,” the analyst noted.

Earlier this month, analysts at Standard Chartered cut their target for BTC in 2026 to $100,000 and forecast a potential retest of $50,000 before a fresh rally higher.