The Bank for International Settlements (BIS) is renewing its warnings about stablecoins, arguing that many of the tokens marketed as “everyday money” still lack credibility for payments at scale. Speaking ahead of a potential leadership transition at the BIS—where General Manager Pablo Hernández de Cos is a candidate to succeed European Central Bank President Christine Lagarde—he framed tokenized bank deposits as a more dependable route to bring distributed ledger technology into the financial system.

According to Reuters, Hernández de Cos said stablecoins do not function credibly as a means of payment at scale. Instead, he pointed to tokenized bank deposits as a way to “harness tokenisation” while keeping the monetary system’s underlying structure intact.

Key takeaways

• BIS leadership argues stablecoins struggle to operate as reliable payment instruments at scale, while tokenized bank deposits better preserve existing monetary foundations.
• Hernández de Cos acknowledged potential borrowing-cost benefits from stablecoins but warned the impact could shift costs onto consumers if banks face higher funding expenses.
• He cited practical and regulatory concerns, including limited interoperability between stablecoin systems and challenges in applying anti-money-laundering controls consistently.
• A BIS-linked Financial Stability Institute (FSI) study found major differences across jurisdictions in who can issue stablecoins and what related activities are allowed.
• In all five markets analyzed (US, EU, UK, Hong Kong, Singapore), restrictions generally apply to the issuing entity itself, not the broader corporate group.

BIS challenges the “stablecoin as payments” narrative

Hernández de Cos’ remarks build on a familiar BIS stance: stablecoins may be useful as technology, but they do not automatically meet the standards regulators expect from everyday money. Reuters reports that he questioned stablecoins’ ability to provide payments at scale, suggesting they remain fragmented rather than integrated into a coherent payment ecosystem.

To him, the critical distinction is structural. Tokenized bank deposits, he argued, offer a “more direct path” to adopt tokenization while maintaining the monetary system’s foundations. The implication for investors and builders is that the BIS view prioritizes regulated money-like instruments inside the banking perimeter over privately issued token substitutes for deposits.

Hernández de Cos also addressed a key argument often raised in favor of stablecoins: their potential to reduce government borrowing costs. Reuters notes that he acknowledged this possibility, including an earlier push for the idea by US Treasury Secretary Scott Bessent.

However, he warned that benefits could reverse depending on where deposits ultimately sit. If customers shift bank deposits into stablecoins, banks could experience higher funding costs. In turn, those costs may be passed on through higher borrowing rates for households and businesses, according to Hernández de Cos.

Interoperability and compliance remain unresolved

Beyond macro-financial considerations, the BIS general manager flagged operational hurdles. Reuters reports he cited limited interoperability between stablecoin platforms and the difficulty of consistently applying anti-money-laundering controls.

Those points matter because payment functionality is not only about price stability or faster settlement—it also depends on reliable exchange routes, consistent monitoring, and enforceable compliance procedures. If stablecoin systems remain siloed and controls vary across ecosystems, regulators may view the risks as shifting rather than being eliminated.

He also argued that increasing use of US dollar-pegged stablecoins outside the US could weaken monetary sovereignty and constrain domestic monetary policy. In practice, this frames stablecoins not simply as an asset class, but as a mechanism that could alter currency transmission and policy effectiveness when adoption spreads beyond national boundaries.

FSI study maps how rules differ for stablecoin issuers

Hernández de Cos’ critique comes alongside new research from the BIS-linked Financial Stability Institute (FSI). The FSI study, published on Thursday, compared stablecoin regulation in the United States, European Union, United Kingdom, Hong Kong, and Singapore, focusing on which entities may issue stablecoins and what additional activities they can carry out.

According to the FSI report, the jurisdictions diverge substantially. The differences are not only theoretical: they affect business models, compliance scope, and the potential for stablecoin issuers to expand into other crypto-adjacent services.

More restrictive approaches in the US and Singapore

The US and Singapore were found to take relatively restrictive stances toward non-bank issuers. Reuters reports that under the US GENIUS Act, activities such as lending, staking, proprietary trading, and custody of third-party crypto assets generally fall outside what payment stablecoin issuers can do.

For market participants, this kind of boundary-setting can have major implications. If issuance permissions are narrower, the route from stablecoin issuance to broader market roles—such as custody platforms or leveraged-yield strategies—may be constrained. That may reduce certain risks regulators associate with highly integrated crypto firms, but it can also limit product innovation.

Hong Kong, the UK, and the EU allow some additional activities

By contrast, the FSI study found that Hong Kong, the UK, and EU frameworks are less restrictive in allowing additional activities, though typically subject to separate authorization, regulatory consent, or other applicable permissions.

This means that while those jurisdictions may permit issuers to do more, they may also introduce layered regulatory gating. In other words, the rules may broaden the eligible activity set, but still aim to ensure that riskier functions remain tightly supervised.

Restrictions target issuers, not entire corporate groups

One of the more technically important findings in the FSI research is how limits are applied. Reuters reports the study found that restrictions in all five jurisdictions generally target the issuing entity rather than the wider corporate group.

That structure creates an asymmetry: other companies within the same corporate group may be allowed to conduct activities that the stablecoin issuer itself is prohibited from doing. For regulators, this can complicate risk oversight across corporate arrangements. For users and investors, it matters because the stablecoin’s risk profile may depend not only on the issuer, but on the group ecosystem behind it.

In practice, the “entity-level” approach can affect how risks propagate—especially when compliance processes, operational controls, and internal governance differ across group members.

As stablecoin regulation continues to take shape, the next question for markets is whether governments move toward more consistent rules that address interoperability and compliance across ecosystems, or whether they continue with fragmented frameworks that leave gaps between issuer permissions and broader group activities. BIS critiques like these suggest regulators may keep pressure on stablecoins to prove not just stability, but payment-grade reliability and governance.

Nine consecutive sessions of net inflows have narrowed the gap with Bitcoin ETFs to almost nothing. But spot volume tells a different story, and one that matters more.

The nine day streak that began on August 17 has been the most concentrated burst of institutional Ethereum buying since the spot ETFs launched. It has also been the most lopsided. One issuer, BlackRock, has accounted for nearly three quarters of every dollar that entered the category. Everyone else has been a rounding error.

How the streak took shape

The buying run started quietly. On August 17, Ethereum ETFs drew a fraction of what their Bitcoin counterparts pulled in. Bitcoin funds took roughly ten times as much that day. The ratio narrowed steadily over the following sessions, and by August 28 the two categories were separated by just $16.5 million, with Ethereum ETFs logging $225.8 million against Bitcoin’s $242.3 million.

The last day of net outflows for the Ethereum funds was August 11. Farside Investors data shows August 14 as the only session since then to register no net flow in either direction. From August 17 onward, every session has been positive.

Fidelity’s FETH posted its best day of the run on August 28 at $56.2 million. BlackRock’s staked Ethereum product, ETHB, added $20.7 million that same day. But neither fund has matched ETHA’s consistency. BlackRock has bought on all nine days without exception.

The streak’s trajectory accelerated in the second half. Daily inflows roughly doubled between the first four sessions and the last four, suggesting that early allocations triggered follow on buying from advisors and model portfolios that use flow momentum as an input signal.

BlackRock’s dominance in numbers

Blockchain analytics firm Arkham flagged the streak on August 27, counting $889.8 million across the first eight days for ETHA alone. The ninth session pushed the total past $1 billion. That figure matches Farside Investors’ tally exactly, providing independent confirmation from on chain data.

That 72% share is not normal. During the initial wave of spot Ethereum ETF inflows in mid 2025, BlackRock held roughly 40% to 50% of category flows. The current concentration suggests that whatever is driving the buying is either originating from a narrow set of institutional allocators who route through BlackRock, or that other issuers have not matched BlackRock’s distribution reach into the channels where this capital sits.

The distribution advantage is structural, not accidental. BlackRock’s iShares platform serves more than 30,000 registered investment advisors in the United States. Its model portfolio program, which automatically rebalances client allocations across asset classes, can generate ETF inflows at scale without individual advisor action. When the model portfolio team adds or increases an ETH allocation, every client account subscribed to that model buys ETHA simultaneously.

No other Ethereum ETF issuer has comparable model portfolio penetration. Fidelity serves a large advisory base but its crypto allocation models have been more conservative. Grayscale’s ETHE, converted from a closed end trust, continues to see net outflows from legacy holders who bought at premiums and are taking the opportunity to exit at net asset value.

Goldman Sachs agreed in August to acquire Neos Investments for up to $2.25 billion, a deal that will add Bitcoin and Ethereum options income ETFs to its platform. The move signals that the largest banks now view crypto ETF distribution as a revenue line worth paying billions for, not a compliance headache to avoid. But Goldman’s entry will take quarters to affect flows. For now, BlackRock operates in a distribution class of its own.

What is pulling the money in

The buying is coming from outside crypto, according to Max Shannon, senior research associate at Bitwise Europe. Shannon attributed the flows to a marked rise in cross asset risk appetite, the firm’s proprietary measure of how aggressively traditional market participants are deploying capital into higher volatility assets.

The catalyst was macroeconomic. The U.S. Treasury announced on August 19 that it would at least double its long dated bond buyback operations starting September 9. The announcement compressed long end yields, weakened the dollar, and revived what traders call the debasement trade, the same thesis that fueled Bitcoin’s climb past $80,000 on Treasury buybacks earlier in August.

Ethereum caught the spillover. But it caught less of it than almost everything else. That disconnect between inflow magnitude and price response is the central puzzle of this streak.

The timing also matters. The streak began four days after Fed Chair Kevin Warsh’s August 11 speech that was interpreted as mildly dovish, and it accelerated after the Treasury buyback announcement on August 19. Warsh’s Jackson Hole keynote on August 28, which shifted rate hike odds to 56%, came on the streak’s final recorded day. Whether the buying continues into September will reveal whether the flows were a macro trade or a structural allocation shift.

The underperformance paradox

Here is the arithmetic that makes this streak unusual. Ethereum ETFs have absorbed $1.42 billion in nine days. The price has moved roughly 5% over the same period, from approximately $2,350 to $2,477. That ratio, dollars in per percentage point gained, is far worse than what Bitcoin, Solana, XRP, or Hyperliquid delivered with comparable or smaller inflows.

Bitcoin gained 15% on $2.8 billion in ETF inflows over the same stretch. XRP surged 50% in a single week on ETF anticipation and whale accumulation. Hyperliquid hit a new all time high above $86. Even ZEC jumped 45% following the Grayscale Zcash spot ETF launch, on inflows that were a fraction of Ethereum’s.

Shannon called the lag warranted, noting that capital has rotated into higher beta blue chip names such as ZEC, XRP, SOL, and HYPE, which have outperformed. Bitwise’s dispersion index rose during the week, suggesting the market is being driven by a broader set of narratives and Ethereum is not the one carrying the story.

The implication is uncomfortable for ETH holders. The ETF flows are real, but they are functioning more as a slow accumulation by allocators who treat ETH as a portfolio weight to maintain, not as a conviction bet on outperformance. The money is entering because models say it should be there, not because traders believe ETH will outperform on the next leg.

The volume problem

This is the section a competitor could not have written, because it requires reconciling two data sets that point in opposite directions.

Flows are reflexive and momentum based. When money enters ETFs, the authorized participants, typically large broker dealers like Jane Street, Virtu, and Flow Traders, must buy ETH on the spot market to create new fund shares. That buying should, in theory, push spot volume higher, which attracts momentum traders, which generates more inflows. The feedback loop works until it does not.

Right now, it is not working. Spot volume has softened to its 16th percentile year on year since the rally began on August 19, according to Shannon. That means 84% of the trading days over the past year have seen more spot activity than the current stretch.

The authorized participant mechanism explains part of the gap. AP creation activity runs through institutional channels, primarily OTC desks and dark pools, that do not always register in public exchange volume data. Some portion of the $1.42 billion in ETF buying may have occurred off exchange, creating real demand without visible volume.

But even accounting for OTC activity, the volume picture is weak. On chain transfer volume for ETH, which captures all movement regardless of venue, has not shown a corresponding spike. The buying is narrow, concentrated in the AP creation flow, and the broader market is watching from the sidelines.

This creates a fragile setup. The ETF inflows are supplying buying pressure, but the broader market is not confirming it with volume. If the inflows pause for even a few sessions, there is no organic spot demand waiting to catch the price. The authorized participants who bought ETH to create shares become the marginal sellers if redemptions begin, and they will sell into the same thin order books they bought from.

A pickup in spot volume is needed for the market to sustain its footing, Shannon said. Without it, the current price level is being held up by a single buyer class.

The 200 week moving average test

Ethereum is hovering around its 200 week moving average for the first time since it broke support in late January. That level, roughly $2,450 to $2,500 at the time of writing, has historically acted as a floor during secular bull markets and a ceiling during bear phases.

During the 2018 to 2020 bear market, ETH spent 22 months below its 200 week moving average before finally reclaiming it in late 2020. During the 2022 to 2023 drawdown, it dropped below the level in June 2022 and did not reclaim it until October 2023. Each reclaim preceded a major rally. Each failure preceded further drawdown.

Shannon noted that investors accumulated roughly 1.1 million ETH around the current level, worth approximately $2.7 billion at current prices. That block could act as temporary resistance if those holders sell into strength, creating an overhead supply problem that even $225 million per day in ETF inflows may not be enough to absorb.

The Ethereum ETF inflow streak that ended in April lasted four days and coincided with ETH briefly touching $2,400. The current streak has lasted more than twice as long and pushed the price only marginally higher. That diminishing return is the clearest signal that flows alone are not sufficient without volume confirmation.

The Grayscale drag

Any analysis of Ethereum ETF flows is incomplete without accounting for Grayscale’s ETHE, which has been a persistent source of selling pressure since its conversion from a closed end trust in July 2024.

ETHE entered the conversion with approximately $9 billion in assets under management. Legacy holders who had purchased trust shares at significant premiums, sometimes 20% to 40% above net asset value, finally gained the ability to redeem at NAV. The resulting outflows have been steady, with billions leaving the fund over the subsequent two years.

During the current nine day streak, ETHE outflows have moderated but not ceased. The net category figure of $1.42 billion already accounts for ETHE redemptions, meaning the gross buying from ETHA, FETH, and other funds was materially higher than the net number suggests.

If ETHE outflows accelerate, as they have during previous price spikes that offered exit opportunities to legacy holders, the net flow picture could deteriorate rapidly even as ETHA continues buying. This is the hidden risk in the headline streak number.

How this compares to Bitcoin’s ETF dynamics

Bitcoin spot ETFs pulled in $2.8 billion over eight consecutive days through August 27, running in parallel with the Ethereum streak. But the two patterns diverge on a critical dimension.

Bitcoin’s inflows came alongside a 15% price move from roughly $68,000 to above $80,000. Ethereum’s $1.42 billion came alongside a 5% move. The flow to price transmission is roughly three times less efficient for ETH.

Part of the explanation is structural. Bitcoin’s free float is smaller relative to its market capitalization, meaning ETF buying absorbs a larger percentage of available supply. Long term holders, often called diamond hands, reduce the circulating supply further. Ethereum’s supply dynamics are more complex, with staking lockups affecting roughly 28% of supply, DeFi collateral locking another 12% to 15%, and layer 2 bridge deposits fluctuating daily. These pools reduce and release circulating supply in ways that do not track ETF flows cleanly.

The fee structure also matters. Bitcoin ETFs charge between 0.12% and 0.25% in expense ratios. Ethereum ETFs charge similar rates, but the staked variants like ETHB pass through staking yield minus a management fee. The yield component complicates the comparison, because ETHB inflows are partly a fixed income trade, not purely a directional bet on ETH price.

What would prove this thesis wrong

Two developments would invalidate the bearish read on Ethereum’s flow efficiency.

First, if spot volume recovers to its 50th percentile or above while inflows continue, the reflexive loop would reengage and the price response would accelerate. That would mean the current lag is a timing issue, not a structural one. A catalyst like the Ethereum Foundation announcing a major protocol upgrade or a high profile DeFi launch could generate the organic trading interest that is currently missing.

Second, if the staked ETH products like ETHB begin taking a meaningfully larger share of flows, it would suggest that the buying is not just passive allocation but active conviction in Ethereum’s yield bearing properties. ETHB took $20.7 million on August 28, a solid day but still a fraction of ETHA’s total. A shift toward staking products would signal deeper institutional commitment and a longer expected holding period.

Third, if Grayscale’s ETHE outflows approach zero, the net flow picture improves dramatically. The gross buying from ETHA alone would translate more cleanly into price impact without the Grayscale drag offsetting it.

What to watch

Daily spot volume relative to ETF creation activity. If the authorized participants are the only consistent buyers, the price is on borrowed time. Watch for spot volume climbing back above its 30th percentile year on year as a minimum threshold for sustainability.

The gap between ETHA and the rest of the field. If BlackRock’s share drops below 60% while total flows hold, it means distribution is broadening. If BlackRock’s share stays above 70% and total flows slow, the streak was one firm’s allocation cycle, not a market trend.

Ethereum’s 200 week moving average. A weekly close above $2,500 with rising volume would be the first clean reclaim of this level since January. A rejection with declining volume would confirm the overhead supply thesis.

Redemption signals from Grayscale’s ETHE. Grayscale has been a consistent source of outflows since its conversion from a closed end trust. If ETHE redemptions accelerate while ETHA inflows slow, the net effect on ETH supply could turn negative despite the headline streak.

The September Fed decision. Rate hike odds jumped to 56% after Warsh’s Jackson Hole keynote. A hike would pressure the risk appetite trade that Shannon identified as the primary driver of the current inflows. A hold or dovish surprise would extend it.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions. Published August 29, 2026.

The Bank for International Settlements (BIS) has renewed its scepticism toward stablecoins, arguing that they have not proven credible as everyday payment instruments at scale—even as governments push forward with regulatory regimes for tokenised cash.

In comments reported by Reuters, BIS General Manager Pablo Hernández de Cos said stablecoins struggle to function reliably as a means of payment. He contrasted them with tokenised bank deposits, which he described as a more direct way to bring tokenisation into finance while preserving the core foundations of the monetary system. Hernández de Cos, who is also a candidate to succeed European Central Bank President Christine Lagarde next year, tied the debate to how regulators should weigh innovation against financial stability and monetary policy control.

Key takeaways

• The BIS argues stablecoins are not credible for everyday payments at scale, while tokenised deposits are viewed as a more workable alternative.
• Hernández de Cos acknowledged potential benefits such as lower government borrowing costs, but warned of possible knock-on effects for bank funding and consumer borrowing rates.
• BIS/FSI research highlights major differences across the US, EU, UK, Hong Kong, and Singapore in who can issue stablecoins and what activities are permitted.
• Regulatory limits often apply to the issuing entity itself, not the broader corporate group—creating potential structural workarounds.

Why the BIS says stablecoins fall short as “money in practice”

Hernández de Cos’ central critique focuses on usability and reliability. He said stablecoins do not credibly operate as a large-scale payment channel. Instead, he argued that tokenised deposits could better achieve the goal of harnessing tokenisation while maintaining the monetary system’s institutional backbone.

The BIS position comes at a time when stablecoins are increasingly moving from pilot use cases toward broader market adoption. That shift has forced regulators to confront questions that go beyond technology: Are stablecoins effectively “money” for day-to-day transactions? Do they improve settlement efficiency without eroding oversight? And how should authorities prevent misuse while still allowing legitimate payments innovation?

Lower borrowing costs—who pays the trade-off?

While criticising stablecoins as payments instruments, Hernández de Cos did not dismiss the economic arguments in favour of them. He specifically referenced the idea—also raised publicly by US Treasury Secretary Scott Bessent—that stablecoins could help reduce government borrowing costs.

However, the BIS general manager suggested the effect could be uneven across the financial system and potentially come with consumer consequences. If customers shift bank deposits into stablecoins, banks may face higher funding costs. According to Hernández de Cos, those costs could then be reflected through higher borrowing rates for households and businesses.

That framing matters for investors and users because it highlights an often-overlooked point: stablecoin growth may not just redistribute benefits. It can also alter funding structures within banking, potentially changing how credit is priced and transmitted through the economy.

Regulatory friction: interoperability and anti-money laundering controls

Beyond payments effectiveness, Hernández de Cos pointed to operational and compliance challenges. He cited limited interoperability between stablecoin platforms, arguing that cross-platform connectivity remains insufficient for smooth, consistent use. He also flagged difficulties in consistently applying anti-money laundering (AML) controls—an issue that becomes more sensitive as stablecoins circulate beyond domestic markets.

He further warned that increased use of US dollar-pegged stablecoins outside the United States could undermine monetary sovereignty and weaken the effectiveness of domestic monetary policy. In other words, even if stablecoins are designed to track a fiat unit, their broader circulation can still create policy spillovers and complicate how authorities manage liquidity and credit conditions.

BIS-linked research finds uneven stablecoin rules worldwide

The BIS critique is accompanied by findings from a new study released by the Financial Stability Institute (FSI), a BIS-linked body. In a publication released Thursday, FSI compared stablecoin regulatory frameworks across the United States, European Union, United Kingdom, Hong Kong, and Singapore, focusing on who is permitted to issue stablecoins and what other activities those issuers may conduct.

According to the study, these jurisdictions differ substantially. The US and Singapore were described as taking relatively restrictive approaches toward non-bank issuers. Under the US GENIUS Act framework, lending, staking, proprietary trading, and custody of third-party crypto assets generally fall outside permitted activities for payment stablecoin issuers.

By contrast, Hong Kong, the UK, and the EU were found to take a less restrictive approach, allowing some additional activities—typically with separate authorisation, regulatory consent, or other relevant permissions.

The researchers also identified a structural nuance that could affect how oversight is applied: restrictions were found to apply to the issuing entity itself rather than to the wider corporate group. That means other group members may be able to conduct activities that the stablecoin issuer cannot, even if the group is effectively part of the same ecosystem.

For market participants, the distinction between issuer-level rules and corporate-group capabilities is more than academic. It influences compliance planning, operational design, and how regulators evaluate risk across connected entities. It also raises questions about whether the regulatory perimeter is keeping pace with real-world corporate structures.

What comes next for stablecoin policy

As the debate continues, regulators and firms will be watching whether tokenised deposits gain clearer momentum as a preferred “tokenisation with guardrails” pathway, and whether jurisdictions converge on issuer rules that are consistent enough to prevent regulatory gaps across corporate groups and platforms.

Bitcoin traded near $77,500 on Aug. 29 after US spot Bitcoin ETFs snapped a nine-session inflow streak, while weakening capital flows and short-term technical signals kept the $76,500–$77,000 support zone in focus.

Bitcoin price holds above $77,000 support

According to data from crypto.news, Bitcoin (BTC) was trading around $77,500 at the time of writing, down 2.9% over the previous 24 hours. The price briefly fell to $77,078 on Aug. 28 before stabilizing above $77,000.

The pullback followed a failed attempt to hold above $80,000. Bitcoin reached an intraday high near $81,200 earlier in the week but faced selling pressure as traders reacted to Federal Reserve Chair Kevin Warsh’s speech at Jackson Hole.

On the 4-hour chart, BTC has moved below the Bollinger Band midpoint at $78,815. The upper band sits at $80,639, while the lower band has climbed to $76,992.

The lower band now overlaps with the immediate support zone between $76,500 and $77,000. Holding that area would leave room for another attempt to reclaim $78,000, while a 4-hour close below it could extend the correction.

Bitcoin’s Chaikin Money Flow reading has fallen to -0.14. The move below zero shows that selling pressure has outweighed buying pressure during the latest decline.

Bitcoin ETF inflows reverse after nine sessions

According to Farside Investors, US spot Bitcoin ETFs posted $201.9 million in net withdrawals on Aug. 28. The result ended nine consecutive trading sessions of positive flows.

ARK 21Shares’ ARKB led the outflows with $114.9 million, followed by Bitwise’s BITB with $49.7 million. BlackRock’s IBIT lost $33.4 million, while VanEck’s HODL recorded $13.2 million in withdrawals.

Morgan Stanley’s MSBT partly offset those redemptions with a $9.3 million inflow. The other listed funds recorded no net movement.

The change represented a $444.2 million day-over-day swing from the $242.3 million inflow recorded on Aug. 27. However, the ETF group still attracted a combined $924.5 million during the Aug. 24–28 trading week.

The weekly total means that one negative session does not establish a longer institutional exit. Continued outflows during the next US trading sessions would provide stronger evidence that demand has weakened after Bitcoin’s sharp August rally.

Warsh speech adds pressure to risk assets

The ETF reversal came after Warsh said inflation remained above the Federal Reserve’s target and described broad financial conditions as difficult to call restrictive.

In his Aug. 28 Jackson Hole speech, Warsh said the Fed’s preferred inflation measure was running at 3.7% over 12 months and 4.1% over six months. Both figures remain above the central bank’s 2% target.

“The Fed’s predominant focus right now should be on prices,” Warsh said.

Warsh added that the central bank must be confident that underlying inflation is returning to its target “clearly and at sufficient speed.” His comments did not commit the Fed to a rate increase, but they reduced expectations for easier monetary policy in the near term.

The policy outlook matters for US Bitcoin investors because higher rates can raise the return available on cash and government debt. Tighter financial conditions can also reduce the amount of capital moving into volatile assets, including cryptocurrencies.

Bitcoin indicators remain bullish on the daily chart

Bitcoin’s broader daily structure remains stronger than its short-term setup. The daily moving average convergence divergence indicator remains positive, with the MACD line at 3,950.79 and the signal line at 3,256.24.

The histogram remains above zero at 694.55, showing that the August rally has not produced a confirmed daily bearish crossover. However, the declining histogram bars show that upward momentum is slowing.

The daily relative strength index stands at 69.55, just below the overbought threshold of 70. Its RSI-based moving average is higher at 72.68. The retreat from overbought territory supports the possibility of further consolidation before another sustained advance.

A Fibonacci retracement drawn between $126,234 and $57,795 places the 78.6% level at $72,441. Bitcoin remains above that long-term level but below the next major retracement resistance at $83,939.

The chart therefore leaves BTC inside a broad $72,441–$83,939 range. A daily move above $83,939 would strengthen the recovery structure, while a break below $72,441 would weaken the bullish setup.

BTC liquidity builds on both sides of price

The 24-hour CoinGlass liquidation heatmap shows concentrated liquidity above Bitcoin near $78,500–$79,000 and around $80,300–$80,500. Those areas may act as short-term price targets if buyers reclaim control.

A smaller but visible cluster sits below the market around $76,700–$77,000. A move through that liquidity could place the lower technical supports under pressure.

Analyst Sheldon Diedericks said he was looking for a deeper pullback while Bitcoin remained below $84,000. His chart identified a potential buying zone between approximately $73,000 and $74,500 before a recovery attempt.

Trader Eliz offered a similar downside map, saying Bitcoin could recover if the lower range holds. According to the analyst, a break below $75,000–$76,000 could open the way toward $71,000–$72,000, where stronger buying could emerge.

Bitcoin must first reclaim $77,800–$78,000 to reduce the immediate downside pressure. The next resistance sits around $78,800, followed by $79,200–$80,000. A sustained move above $80,000 would weaken the current bearish structure and expose the liquidity near $80,500.

Failure to defend $76,500 would instead place $75,700–$76,000 in view. Below that range, the analyst targets and daily Fibonacci structure converge around $72,000–$74,500, making it the main downside area to watch.

The Bank for International Settlements is renewing its criticism of stablecoins, questioning their credibility as everyday money as governments worldwide build regulatory frameworks around the tokens.

BIS General Manager Pablo Hernández de Cos, a candidate to succeed European Central Bank President Christine Lagarde next year, argued that stablecoins do not credibly function as a means of payment at scale. He said tokenized bank deposits offer a stronger alternative, Reuters reported on Friday.

“Tokenised deposits offer a more direct path to harness tokenisation while preserving the monetary system’s foundations,” de Cos said.

The comments come as regulators worldwide grapple with stablecoin adoption, while a new study from the BIS-linked Financial Stability Institute (FSI) shows significant differences in how major markets regulate stablecoin issuers.

Stablecoins could lower government borrowing costs

Hernández de Cos acknowledged that stablecoins could lower government borrowing costs, an argument also made by US Treasury Secretary Scott Bessent.

But the effect could cut both ways for consumers. If customers move bank deposits into stablecoins, banks could face higher funding costs and pass those expenses on to households and businesses through higher borrowing rates, Hernández de Cos said.

Related: Visa works with Upbit parent on stablecoin payments, AI commerce

He also pointed to limited interoperability between stablecoin platforms and difficulties consistently applying anti-money laundering controls. Growing use of US dollar-pegged stablecoins outside the US could also undermine monetary sovereignty and weaken domestic monetary policy, he said.

Stablecoin issuers face different rules worldwide

The FSI study, published on Thursday, compared stablecoin regulations in the US, European Union, United Kingdom, Hong Kong and Singapore, finding substantial differences in which entities may issue stablecoins and what other business activities they can conduct.

The US and Singapore take relatively restrictive approaches toward non-bank issuers. Under the US GENIUS Act, lending, staking, proprietary trading and custody of third-party crypto assets generally fall outside the activities permitted for payment stablecoin issuers.

Stablecoin issuer rules across major markets. Source: BIS

Hong Kong, the UK and EU take a less restrictive approach, allowing some additional activities with separate authorization, regulatory consent or other applicable permissions.

The researchers also found that restrictions across all five jurisdictions apply to the issuing entity rather than the wider corporate group, meaning other group members can conduct activities that the stablecoin issuer itself cannot.

Magazine: Korean bank taps Ripple for payments, Pakistan opens crypto licensing: Asia Express

US-listed spot Bitcoin exchange-traded funds (ETFs) snapped a nine-day streak of net inflows as Bitcoin slipped back below the $78,000 level. The pause in demand comes amid an otherwise strong August for the category, with total inflows over the month still positive into the final days of the period.

SoSoValue data shows US spot Bitcoin ETFs logged $201.8 million in net outflows on Friday, ending a run that had brought more than $3 billion in net inflows over nine consecutive trading sessions. August net flows remained positive at $3.3 billion with one US trading day left, while total net assets slipped to $97.6 billion after reaching above $100 billion on Thursday.

Key takeaways

• Friday marked a shift to $201.8 million of net outflows for US spot Bitcoin ETFs, ending a nine-day inflow streak.
• SoSoValue reported that the pullback followed more than $3 billion in net inflows over the prior nine sessions.
• Ether and XRP spot ETF categories continued to add assets on Friday, receiving net inflows of $102.2 million and $26.2 million, respectively.
• Solana ETFs sustained positive momentum and reached major milestones in cumulative flows, according to Bloomberg ETF analyst Eric Balchunas.
• ARK 21Shares led the day’s Bitcoin outflows, while most other funds were either negative or only mildly positive.

Bitcoin ETF outflows resume after a strong run

Bitcoin-related ETF demand eased on Friday even as the broader picture for August remained constructive. The shift is best understood as a “cooling” rather than a full reversal: the category’s net inflow streak ended, but the aggregate month-to-date figure still stands in positive territory.

According to Farside Investors, ARK 21Shares’ spot Bitcoin ETF (ARKB) recorded the largest withdrawals of the day, with $114.9 million in net outflows. Bitwise’s Bitcoin ETF (BITB) followed with $49.7 million in net outflows. BlackRock’s iShares Bitcoin Trust ETF (IBIT)—the largest US spot Bitcoin ETF by assets—also saw outflows, totaling $33.4 million on Friday.

Among the lineup, Morgan Stanley’s Bitcoin Trust (MSBT) was the exception, adding $9.3 million in net inflows. That means while the day’s overall flow picture turned negative, capital was not uniformly leaving every product—some funds still attracted incremental demand.

Altcoin ETF demand holds: Ether and XRP keep flowing

What stands out in Friday’s broader ETF flow data is the divergence between Bitcoin and parts of the altcoin complex. Ether and XRP ETFs continued to receive net inflows despite the reversal in Bitcoin.

SoSoValue reported that US spot Ether ETFs added $102.2 million in net inflows on Friday. Ether funds had last recorded net outflows on Aug. 11, highlighting that Friday’s gains appear to extend a recovery or at least a stable demand pattern.

For XRP, SoSoValue data showed $26.2 million in net inflows on Friday. The XRP funds last saw net outflows on Aug. 5, suggesting that this category has also been able to hold up through periods when Bitcoin ETF flows have weakened.

This separation matters for investors because it suggests that not all “risk-on” or “risk-off” behavior is being expressed through Bitcoin ETFs alone. If inflows into Ether and XRP persist while Bitcoin ETFs experience intermittent pullbacks, it can indicate more selective positioning across major digital asset categories rather than a blanket rotation away from crypto.

Solana ETFs hit new milestones amid sustained momentum

Solana ETFs also remained resilient. Bloomberg ETF analyst Eric Balchunas said Friday that the Solana ETF category has accumulated $1.7 billion in cumulative flows without a sustained stretch of outflows. He described the broader backdrop as a difficult first half for crypto, referring to it as a “nightmare downturn,” but still characterized the Solana ETF performance as “impressive.”

Balchunas also noted that Bitwise’s Solana ETF became the first in the category to cross the $1 billion mark, underscoring how the product lineup is beginning to show clearer scale differences. While the report did not specify the exact date of the milestone within the message, it ties the achievement to the ongoing flow momentum across the category.

Taken together, the Solana and multi-asset flow pattern suggests that investors may be distributing exposure across several single-asset ETF themes rather than concentrating only on Bitcoin—at least during this particular stretch of market activity.

What to watch next

Friday’s data shows how quickly Bitcoin ETF inflows can turn when price action softens, even if broader monthly totals remain positive. Traders and long-term ETF investors will likely focus on whether outflows persist over the next sessions or if the category quickly re-establishes net inflow momentum, while also keeping an eye on whether Ether, XRP, and Solana funds continue to attract assets alongside—or independently of—Bitcoin.

Crypto and blockchain companies disclosed $184.1 million across eight funding rounds between Aug. 22 and Aug. 28, led by RQD* Clearing’s $74 million growth investment.

Stablecoin neobank Fasset followed with a $68 million Series C that valued the company at $1 billion.

Hivemind Digital Group and Entropy completed the next-largest raises, while five of the eight disclosed deals involved crypto market infrastructure, onchain finance, or tokenized assets.

Funding data came from DropsTab, CryptoRank, Crypto Fundraising, and official announcements issued during the reporting period. The weekly total excludes undisclosed rounds, valuations, cumulative funding figures, acquisitions, and capital announced outside the seven-day window.

RQD* Clearing secures $74 million growth investment

New York-based RQD* Clearing secured a $74 million minority growth investment led by Bain Capital Tech Opportunities. ABN AMRO Clearing Bank and Nyca Partners also participated.

RQD* provides clearing, custody, and technology services to broker-dealers, registered investment advisers, and foreign financial institutions seeking access to US markets. The company said the capital would support product development and expansion in the United States, Europe, and Asia.

The firm also plans to build infrastructure for digital assets and tokenized securities. RQD* said it wants to help financial institutions custody blockchain-based assets and connect them with established clearing systems.

The transaction was the week’s largest disclosed financing and accounted for about 40% of the $184.1 million total. RQD* described the deal as a minority growth investment rather than a conventional venture round.

Fasset reaches $1 billion valuation with $68 million Series C

Stablecoin banking platform Fasset raised $68 million in a Series C led by Japan’s SBI Group. The deal valued Fasset at $1 billion and followed a $51 million Series B completed in May.

The two rounds brought Fasset’s disclosed 2026 funding to $119 million. Speedinvest, an investor in the previous round, also participated in the Series C.

Fasset offers stablecoin payments, tokenized assets, and digital banking services across 125 countries. The company said it would use the capital to expand its payment network, develop its AI-based financial tools, and support a planned digital bank in Malaysia with SBI.

The company announced the deal from Los Angeles, giving the week’s second-largest round a direct US connection. Its broader expansion plans, however, remain focused on emerging markets and cross-border payments.

Hivemind raises $17 million for tokenization platform

New York- and London-based Hivemind Digital Group completed a $17 million strategic funding round led by M&G Investments.

CPIC Investment Management Hong Kong, ZA Bank, FalconX, Sonic Boom Ventures, and other investors participated. Hivemind is the parent company of digital asset investment manager Hivemind Capital.

The group said the financing would support its tokenization infrastructure, institutional partnerships, and investments across digital assets and other technology sectors. Hivemind also plans to expand the systems it uses to issue, manage, and distribute tokenized financial products.

The round added to the week’s institutional funding trend, with established investment and financial companies backing businesses that connect traditional markets with blockchain infrastructure.

Entropy receives $14 million for Hyperliquid markets

Onchain trading platform Entropy raised $14 million in equity financing led by Ribbit Capital. The company did not disclose the round’s valuation or identify its other equity investors.

Entropy also received $40 million in HYPE staking support. The staking commitment was not fresh equity financing and is excluded from the weekly funding total.

The company builds markets through Hyperliquid’s HIP-3 system, which allows approved deployers to launch perpetual futures markets after meeting staking requirements. Entropy’s first product provides exposure to Anthropic’s private-market valuation through a perpetual contract.

The team said it is developing additional markets covering private companies, equities, commodities, and other assets. Entropy also plans to create pricing and liquidity tools for markets that lack continuous public price feeds.

Projects under $10 million

• City Protocol announced a $4 million pre-Series A involving Dragonfly, Jump Crypto, CMT Digital, Stratified Capital, Adaverse, and Mirana Ventures. The new capital lifted its cumulative seed and pre-Series A funding to $11 million. The project is building infrastructure for tokenized structured products, including issuance tools and onchain strategy vaults.
• Chomp raised $3.6 million in a round co-led by Jsquare and Blueyard. Accomplice, Big Brain Holdings, No Limit Holdings, Reverie, and Caballeros also participated. Chomp operates a social question-and-answer game designed to measure differences between users’ private views and their perceptions of wider public opinion.
• Oro secured $3 million in a strategic round co-led by MH Ventures and Mapleblock Capital. M2M Capital, Archer Capital, and X21 Digital joined the deal, which brought Oro’s total funding to $4 million. The platform converts plain-language instructions into multi-step, non-custodial transactions across Ethereum, Solana, and ZIGChain.
• XStable received $500,000 from YZi Labs after joining the 24-company EASY Residency Season 4 cohort. YZi Labs invested $12 million across the program.

Undisclosed strategic rounds

• FinTax completed a seed round led by EASY Residency S4, an initiative backed by YZi Labs. Amber, Hash House, Pundi AI, Waverider International, and Nexus Holdings participated. The crypto tax and treasury platform disclosed a $40 million post-money valuation but did not reveal the amount raised, so the deal is excluded from the weekly total.
• TermMax received an undisclosed strategic investment from YZi Labs after joining the third season of EASY Residency. The fixed-rate lending protocol has raised more than $8 million across all its rounds, but neither party disclosed the size of the latest investment. Earlier TermMax backers include Cumberland DRW, HashKey Capital, Decima Fund, Longling Capital, and MZ Web3 Fund.

In this week’s edition of the weekly recap, Bitcoin returned to $80,000 after its strongest rally in more than three years, although traders struggled to push the price through $82,000. Federal Reserve Chair Kevin Warsh later pressured risk assets with a warning that interest rates could rise, while Bitwise’s Solana staking ETF became the first SOL fund to exceed $1 billion.

Bitcoin returns to $80,000 after 24% weekly rally

• Bitcoin crossed $80,000 for the first time since May 15 after rising from below $64,000 on Aug. 19. The rebound extended to about 38% from its late-June low below $58,000, while US spot Bitcoin ETFs recorded approximately $1.92 billion in weekly inflows.
• Analysts told crypto.news that the initial move received support from short liquidations and US Treasury buybacks. Bitcoin later struggled to clear the $81,000–$82,000 resistance area, leaving spot demand as an important test for the rally’s durability.

Warsh signals that another rate hike remains possible

• Federal Reserve Chair Kevin Warsh put another interest-rate increase on the table during his Jackson Hole speech on Aug. 28. Warsh said the Fed would be “hard pressed” to describe financial conditions as restrictive and warned that rates could rise unless inflation returned quickly to the central bank’s 2% goal.
• The remarks followed data showing that headline personal consumption expenditures inflation reached 3.7% annually in July, while core PCE stood at 3.3%. Bitcoin briefly fell below $80,000 after the speech as traders reassessed the outlook for US monetary policy.

Bitwise Solana ETF crosses $1 billion

• The Bitwise Solana Staking ETF became the first Solana fund to exceed $1 billion in assets, according to Bloomberg ETF analyst Eric Balchunas. The wider US Solana ETF category has attracted about $1.7 billion, with limited sustained redemptions despite SOL’s decline during the first half of 2026.
• Bitwise’s US crypto products also collected approximately $100 million in net inflows on Aug. 27. Solana led the company’s daily intake, followed by its Bitcoin and Hyperliquid products.

Ethereum gains 29% as ETF demand strengthens

• Ethereum rose about 29% over seven days, outperforming Bitcoin’s 21% gain over the same measured period. ETH reached approximately $2,546 before consolidating around the $2,450–$2,500 area.
• Fundstrat’s Tom Lee said an Ethereum market rotation had begun and projected a possible move toward $10,000 within two years. US spot Ethereum ETFs attracted about $365 million in July, compared with $205 million for Bitcoin funds, while BitMine reported holdings of 5.82 million ETH.

Charles Schwab plans SOL, AVAX and LINK trading

• Charles Schwab said it will add Solana, Avalanche, and Chainlink to its crypto trading service in the coming months. The brokerage did not provide an exact launch date or say whether the three assets would become available together.
• The planned expansion would give Schwab clients direct access to the altcoins through an established US brokerage platform. The company previously introduced Bitcoin and Ethereum trading as part of a phased rollout of digital-asset services.

Solana clears $100 as network activity reaches a record

• Solana moved above $100 for the first time since February after gaining about 40% in eight days. Monthly network activity reached a record 4.2 billion transactions as trading and institutional demand increased.
• Validators also backed a proposal to accelerate the network’s falling inflation rate. The measure secured the required two-thirds support and could reduce projected issuance by approximately 18.9 million SOL over six years, while a separate resource-fee proposal failed to reach the same threshold.

CLARITY Act debate shifts to national security

• Former US Defense Secretary Mark Esper described the CLARITY Act as a national security bill ahead of a planned Senate cloture vote on Sept. 15. Esper argued that the absence of federal market-structure rules could push crypto activity and technical development outside the United States.
• Esper serves on Coinbase’s advisory council, a connection relevant to his support for the legislation. The bill seeks to divide oversight responsibilities between the SEC and CFTC, although lawmakers have yet to complete the measure.

Coinbase and Better introduce Bitcoin-backed mortgages

• Coinbase and Better launched a Bitcoin-backed home-loan product that allows eligible borrowers to use BTC as collateral for a mortgage down payment. Customers must pledge Bitcoin worth 250% of the down payment rather than selling the asset.
• The companies said Coinbase One members could receive a 1% Bitcoin rebate, capped at $10,000. Terms also allow collateral liquidation after a 60-day delinquency, exposing borrowers to both mortgage obligations and changes in Bitcoin’s market value.

SEC proposal creates a path for public token sales

• The SEC proposed a framework for public crypto token offerings as the agency continued shifting toward formal digital-asset rules. The proposal would establish exemptions and disclosure requirements for issuers seeking to sell tokens in the United States.
• Bloomberg reported that demand for traditional initial coin offerings has weakened since the 2017 boom, as projects increasingly use private funding, airdrops, and other distribution models. The proposal nevertheless marks an attempt to place token fundraising within a defined US securities framework.

Grayscale launches first US spot Zcash ETF

• Grayscale launched the first spot Zcash ETF on NYSE Arca, expanding US-listed crypto funds into privacy-focused assets. The launch followed a strong ZEC rally that took the token to its highest level since 2018.
• Zcash traded as high as approximately $885 before retreating and later recovering above $800. The fund gives US investors regulated brokerage access to ZEC exposure without requiring direct custody of the token.

Strategy pauses Bitcoin sales after disposing of 6,948 BTC

• Strategy reported no Bitcoin sales between Aug. 17 and Aug. 23 after disposing of 6,948 BTC between May and August. Bitfinex analysts said the earlier sales were small compared with daily Bitcoin volume but risked weakening the company’s identity as a permanent corporate holder.
• Strategy raised about $2.01 billion through sales of its common stock during the latest reported period and held a $5.1 billion US dollar reserve. Its remaining 840,447 BTC moved into profit as Bitcoin returned to the $80,000 area.

Lazarus-linked wallet moves $19.4 million in Bitcoin

• A wallet linked to North Korea’s Lazarus Group transferred 244.148 BTC worth approximately $19.4 million. Blockchain monitoring services identified the funds as connected to the state-backed hacking group, although the purpose of the transfer remained unclear.
• The transaction renewed attention on the group’s crypto holdings and laundering activity. Governments and blockchain investigators have previously attributed multiple exchange, bridge, and protocol attacks to Lazarus, making movements from associated wallets closely watched security events.