Cryptocurrency markets entered the third quarter of 2026 with less leverage but thinner liquidity after a wave of liquidations cleared speculative positions while major sources of demand weakened during the second quarter.  

According to a market update from institutional data provider Talos, Bitcoin (BTC) and Ether (ETH) long liquidations totaled $8.35 billion in Q2. The data provider pointed out that the deleveraging coincided with spot Bitcoin exchange-traded fund (ETF) outflows, reduced Bitcoin buying by Strategy and a contraction in stablecoin supply. 

While the reset left the market more stable heading into Q3, Talos said reduced order-book depth weakened its ability to absorb renewed selling pressure. This means the market could be less vulnerable to a chain reaction of forced selling, but prices may still swing sharply because there’s less trading activity to absorb large orders. 

Cross-asset performance chart. Source: Talos

At last look on Wednesday, Bitcoin was trading hands at $58.656, after trading earlier in the day to $57,742, its lowest price since Sept. 17, 2024.

Talos said the liquidation wave reduced the amount of leveraged money in the market. Bitcoin open interest, which measures the value of outstanding derivatives contracts, fell to $33.5 billion, down 32% from its Q2 peak, while Ether open interest dropped to $16.2 billion, a 40% decline, according to the data provider. 

Related: Swan’s Cory Klippsten sees record Bitcoin holder supply revealing early bottom

To be sure, the market became less liquid: Bitcoin’s 2% order-book depth, the value of buy and sell orders close to its market price, fell to between $35 and $40 million by late June from about $70 million in early May. Spot exchange volume also declined 28% quarter-over-quarter to $2.32 trillion, according to Talos. 

ETF outflows and Strategy slowdown weigh on demand

Weakening demand was evident before the end of Q2. US spot Bitcoin ETFs recorded $696.3 million in net outflows in a single day on June 25. In total, June recorded about $4.5 billion in outflows, pushing year-to-date totals to $5.5 billion. 

Strategy also purchased roughly 3,600 BTC in June, down from about 25,000 BTC in May and more than 50,000 BTC in April, according to company disclosures. The company also recorded a net sale of 32 BTC earlier in June and ended the month with 847,363 Bitcoin in its treasury, purchased at an average price of $64,103 apiece.

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US-listed spot Bitcoin exchange-traded funds (ETFs) saw another sharp drawdown in June, recording $4.5 billion in net outflows—an amount that vastly exceeds the $1.25 billion Strategy is authorized to raise under its recently announced Bitcoin monetization program.

SoSoValue data updated Wednesday shows the record withdrawals pushed US spot Bitcoin ETFs to about $5.5 billion in year-to-date net outflows for 2026. Even with a still-positive overall position since launch, cumulative net inflows have fallen to roughly $51.2 billion, underscoring cooling investor demand for the product.

Key takeaways

• June’s $4.5 billion net outflows represent the largest monthly outflow figure cited for US spot Bitcoin ETFs in this period.
• That drawdown widened year-to-date net outflows for 2026 to roughly $5.5 billion, according to SoSoValue.
• BlackRock’s iShares Bitcoin Trust (IBIT) accounted for about 79% of June’s withdrawals, with $3.55 billion in net outflows (Farside Investors).
• Despite net inflows rising 4.6% year-over-year, CryptoQuant says ETF holdings remain below year-ago levels and total holdings are now under 1.25 million BTC.
• The scale of ETF outflows highlights a broader mismatch between renewed corporate Bitcoin monetization plans and fund-level investor behavior.

June outflows hit a record, led by IBIT

SoSoValue’s tracking shows June produced $4.5 billion in net outflows from US spot Bitcoin ETFs. The same period saw a heavy concentration in IBIT, which posted $3.55 billion in net outflows—about 79% of the total, according to Farside Investors.

For traders and long-term allocators, this concentration matters. When the majority of withdrawals are coming from a single flagship vehicle, it can signal that institutional allocation decisions are shifting in a coordinated way rather than being spread across the ETF complex. It also means changes in sentiment around the most liquid fund can ripple through broader ETF flow patterns.

Year-to-date flows remain negative even as lifetime inflows persist

The June outflows have pushed US spot Bitcoin ETFs toward a deeper negative 2026 trajectory. SoSoValue data indicates year-to-date net outflows are approximately $5.5 billion, while cumulative net inflows since the funds launched stand at about $51.2 billion.

In other words, the ETFs are not losing their overall historical inflow advantage—but the direction of travel is becoming more challenging. Record monthly withdrawals make it harder for new inflows to offset earlier net selling pressure, particularly if outflows remain elevated beyond a single month.

Holdings trail the year-ago baseline, signaling weaker underlying demand

SoSoValue reports cumulative net inflows into US spot Bitcoin ETFs have increased 4.6% compared with roughly $49 billion a year earlier. However, CryptoQuant’s data suggests that this net inflow picture does not translate into higher Bitcoin holdings at the same point in time.

CryptoQuant head of research Julio Moreno wrote on X on Tuesday that “US-based Bitcoin ETF holdings are now lower than at this same day last year.” He also said that overall demand for Bitcoin is weakening, pointing to total holdings across US spot Bitcoin ETFs falling below 1.25 million BTC.

This distinction—between net inflows and actual ETF holdings—can be crucial for interpretation. Net flow measures can move differently from holdings when redemption and creation activity, custody changes, or other accounting effects alter the timing relationship between “fund flows” and the amount of Bitcoin sitting inside the ETFs. For investors, the practical takeaway is that the balance sheet reality inside the funds is not matching the improved net inflow comparison.

Moreno’s commentary is consistent with the larger message investors may be trying to reconcile: ETFs can attract capital in aggregate while still losing BTC exposure year-over-year, which is often a sign that demand is not as resilient as headline inflow numbers imply.

Strategy’s $1.25 billion authorization runs into ETF outflows of a larger magnitude

Against this backdrop, Strategy announced a Bitcoin monetization program earlier this week. The company said it would seek authorization to raise up to $1.25 billion, framed as part of a broader capital framework intended to support dividend obligations tied to its preferred securities. The move was widely interpreted as responding to funding pressure within Strategy’s capital structure.

Community reactions were mixed. Some investors viewed the plan as financial flexibility, while others questioned the long-term sustainability of the new structure and argued it could lead to selling more Bitcoin than the initial authorization amount suggests.

In market reaction, Strategy’s Class A common stock (MSTR) initially rose as much as 12% above $90 after Monday’s announcement, according to Yahoo Finance, before reversing course and closing at $86.93 on Tuesday, down 6.2% on the day. Strategy’s preferred stock (STRC) traded higher at $84.86 on Tuesday, as reported by Yahoo Finance.

What stands out for readers is the scale mismatch between the corporate financing target and the ETF market’s behavior. June’s $4.5 billion in US spot ETF net outflows is more than three times the $1.25 billion Strategy is authorized to raise. While the two are not directly comparable in mechanism—corporate monetization versus retail/institutional ETF allocations—the comparison helps frame an important tension: renewed corporate efforts to manage capital around Bitcoin exposure are occurring as ETF-level demand is showing clear signs of cooling.

Going forward, investors will likely watch whether the ETF flow weakness is a temporary dip or a continuing trend—especially given CryptoQuant’s warning that ETF holdings remain below year-ago levels. If outflows persist, Strategy’s monetization plan may become part of a wider debate about where incremental Bitcoin demand will ultimately come from.

A MiCA license issued in any EU country gives the holder access to the entire 27-nation bloc as well as Iceland, Liechtenstein, and Norway. That means Polish companies are likely to apply in countries such as Lithuania, Latvia or Germany before passporting their services back home.

“The business simply moves somewhere else,” Wojciech Kaszycki, chief strategy officer of Warsaw-based fintech BTCS, told CoinDesk in a video interview. “None of the Polish companies can receive the authorization in Poland.”

Nawrocki says the law, which he rejected for a third time earlier this month, gives regulators excessive powers, including the ability to block crypto companies’ websites and impose rules that could push businesses abroad. He’s also said it favors banks and large corporations over startups while creating an overly complex regulatory framework.

Kaszycki said he agreed with Nawrocki’s criticism that parts of the law went beyond MiCA itself. The draft, which has been passed by both houses of parliament, allows the Financial Supervision Authority (KNF) to freeze customer funds for months and block websites before companies have exhausted legal appeals.

Mateusz Kara, CEO of Morphic Financial Group, headquartered in London and with deep roots and operations in Poland, said the cost of a MiCA license and the political deadlock could “wipe out Polish crypto.”

Several threads are feeding the attention. Aave is rolling out the Ethereum version of its V4 upgrade, a rebuild of how the protocol handles lending, and has seen active governance debate over borrowing limits alongside a growing focus on protocol revenue through a mechanism it calls Smart Value Recapture, which routes value back to the system.

Standard Chartered also published a long-term price outlook in June, forecasting a $3,500 level by 2030 if it capitalizes on the growing tokenized assets trend. The mix has drawn renewed notice to DeFi at a moment when most of the market has been falling.

“For price, this is the kind of signal traders usually want to see as July begins,” Santiment said. “New wallets showing up at this pace suggests interest is growing beneath the surface and supporting the price momentum.”

Whether that holds is the open question, as new wallets show attention, not commitment, and the number matters only if it converts into deposits, borrowing and the revenue that follows.

Meanwhile, AAVE faces headwinds in the near term amid a tepid crypto market. Bitcoin BTC$58,670.24, the largest cryptocurrency, is stuck below $60,000 and most large tokens fell in the first half.

If the participation deepens into real usage, it gives AAVE a firmer base than a price bounce alone. If it fades with the market, the wallet spike will read as a burst of speculative interest rather than the start of a recovery.

European Union crypto clients should be served through a Markets in Crypto-Assets Regulation (MiCA)-authorized legal entity after the bloc’s July 1 transitional deadline, the European Securities and Markets Authority (ESMA) told Cointelegraph, adding to questions over how global exchanges can keep servicing users in the region.

Crypto asset service providers (CASPs) must hold MiCA authorization to serve clients across the EU and European Economic Area, an ESMA spokesperson told Cointelegraph on Monday.

“EU clients should be serviced through a MiCA-authorized entity,” the ESMA representative said, adding that MiCA protections apply only to the legal entity that is licensed in the EU.

The clarification came shortly after Binance told its users it was adjusting services in certain EU countries, including Poland, France, Spain and Italy, as part of its MiCA transition. Binance said users in other countries would not need to take action if they were not based in a jurisdiction where the exchange operates through a local registered entity, saying in those cases that “no action is required at this time.”

ESMA cites “narrow exemption” for non-EU CASPs

The ESMA said CASPs based outside the EU cannot provide their services to local customers unless they fall under the “narrow exemption” of reverse solicitation provided by Article 61 of MiCA.

Article 61 allows a non-EU crypto company to serve an EU client without a MiCA license only when the client initiates the relationship entirely on their own, without any solicitation, marketing or promotion by the company.

However, the regulation makes clear that the exemption does not apply if a third-country company solicits clients in the EU.

“MiCA established that where a third-country firm solicits clients or prospective clients in the Union […] it shall not be deemed to be a service provided on the client’s own exclusive initiative,” an ESMA spokesperson told Cointelegraph.

Excerpt from ESMA’s list of examples of solicitation by third-country companies. Source: ESMA

The regulator also cited its official solicitation guidelines, which include activities such as operating websites, mobile apps, social media, online advertising, sponsorships and influencer campaigns targeting EU users.

Lawyer questions Binance’s Abu Dhabi servicing model

Screenshots of Binance customer support messages circulating on social media appeared to suggest that some EU users could be serviced through Binance’s Abu Dhabi Global Market entity.

Yuriy Brisov, a lawyer at Digital & Analogue Partners, said an Abu Dhabi license has no effect under MiCA because the jurisdiction is treated as a third country, alongside markets such as the United States or Singapore.

Source: Satoshi Club

“Being regulated in Abu Dhabi does nothing for Binance under MiCA,” Brisov said. “When Binance says some EU users are serviced through the ADGM entity, in MiCA terms that means a non-EU company is serving those users,” he added.

Related: Germany leads MiCA crypto authorization race as Europe’s deadline looms

Brisov said that the reverse solicitation exemption was designed for isolated cases where an EU customer independently approaches a non-EU company, not for maintaining an existing customer base built through years of marketing.

Binance did not respond to repeated Cointelegraph requests for clarification on whether any EU users would be serviced through its ADGM entity after the MiCA deadline.

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A former CEO of Goliath Ventures, Christopher Alexander Delgado, has entered a guilty plea in the U.S. Department of Justice’s cryptocurrency fraud case that prosecutors say relied on investor money to sustain promised returns. The DOJ said the scheme raised at least $400 million from investors through what it described as digital asset “liquidity pools,” with Delgado admitting to wire fraud conspiracy and related offenses.

According to the DOJ, Goliath marketed monthly returns between January 2023 and January 2026. Prosecutors contend that investor funds were not used as represented, but instead were diverted to pay earlier participants, handle withdrawal requests, cover personal luxury spending, and fund business events.

Key takeaways

• Delgado pleaded guilty to conspiracy to commit wire fraud, along with wire fraud and money laundering counts tied to the Goliath Ventures scheme.
• Prosecutors said Goliath promised monthly returns from crypto liquidity pools while using new investor money for withdrawals, payments, and expenses.
• The plea agreement states the scheme resulted in at least $250 million in investor losses and includes forfeiture of extensive luxury assets.
• Sentencing is scheduled for Oct. 8, with Delgado facing substantial prison time if convicted on the fraud and money laundering counts.
• The case has also raised questions about how financial institutions handled Goliath-related transactions, including litigation claims involving major banks and crypto custody.

What the DOJ says Delgado admitted

In a Tuesday announcement, the DOJ said Delgado pleaded guilty to a set of charges stemming from the cryptocurrency investment operation. Prosecutors described a program that promised regular returns using digital asset liquidity pools, spanning January 2023 through January 2026.

Delgado’s plea included admissions that the funds collected from investors were used for purposes inconsistent with the representations made to customers. The DOJ said money from the scheme went toward paying earlier investors and processing withdrawal requests, while also being used for luxury spending and to finance business events.

Under the plea agreement, Delgado admitted that investor losses linked to the scheme totaled at least $250 million. The agreement also requires forfeiture of a portfolio of luxury assets, according to the DOJ.

Forfeiture and sentencing exposure

The DOJ said Delgado agreed to surrender eight properties, 11 vehicles, and more than 50 luxury bags and wallets, along with at least 29 pieces of jewelry. The forfeiture list also includes bank accounts and crypto wallets identified by prosecutors.

From a potential punishment standpoint, the DOJ’s filing indicates that each fraud count carries up to 20 years in prison, while money laundering carries up to 10 years. Delgado’s sentencing has been set for Oct. 8.

Apology on television precedes the plea

Delgado’s guilty plea follows a public apology and television appearance that drew attention to the case. Earlier this year, on May 12, Delgado appeared in an interview with Florida television station WFTV, where he acknowledged he had let investors down and said he had returned to the U.S. and was cooperating with authorities.

In that interview, Delgado claimed that only about $160,000 remained in the company’s bank account at the time of his arrest. He also said other former colleagues were involved in the broader operation.

Scrutiny expands to banks and payment rails

Beyond Delgado’s plea, the Goliath case has drawn scrutiny regarding the financial institutions that processed transactions connected to the scheme. On March 12, investors reportedly filed a proposed class-action lawsuit against JPMorgan Chase, alleging that the bank ignored suspicious activity and allowed Goliath to route investor funds through its accounts.

That lawsuit, as described in earlier coverage, claimed that roughly $253 million moved through a JPMorgan account. It further alleged that about $123 million later transferred to Goliath’s wallets at Coinbase. A separate federal complaint, according to the DOJ, also identified flows involving Bank of America and transfers directly to Coinbase wallets.

For market participants and builders, these allegations underscore a recurring challenge in crypto markets: even when digital assets are involved, traditional banking channels can remain critical bottlenecks for detecting suspicious activity—or, if the system fails, for facilitating fraudulent structures.

With sentencing approaching on Oct. 8, investors and compliance professionals will likely focus on what the court order clarifies about the scheme’s mechanics, the scale of losses, and how payments moved between bank accounts and crypto wallets. The plea does not end the broader questions raised by parallel claims about financial institutions’ role, and future rulings could further shape expectations for safeguards across both traditional and on-chain settlement pathways.