Bitcoin’s BTC$72,190.78 price may have rallied almost 7% since Sunday, but conviction remains weak, with the recovery stalling near $72,000 ahead of key binary risks, including Friday’s U.S. inflation report and U.S.-Iran truce talks this weekend.

The cautious approach is evident in the options market, where institutions continue to chase upside via calls, the derivative contracts that allow traders to bet on gains of the underlying asset.

According to QCP Capital, options tied to BlackRock’s spot bitcoin ETF (IBIT) show demand for the $45 call expiring in May. That means traders expect IBIT’s price to rise above that level from the present $40. Bitcoin options on Deribit have seen similar flows, with the $80,000 call emerging as the most popular bet. Still, demand for puts, which offer downside protection, persists.

“IBIT options showed sustained open interest in the May 45 call, holding above 80k+ contracts through the week, while downside hedging remained in place via puts and long-dated protection. The combination reflects a market participating in upside, but not abandoning hedges,” the Singapore-based trading firm, which is one of the world’s largest crypto market makers, said in an email.

The sticky demand for protection against declines is also revealed in options skew, which measures the price differential between calls and puts, and remains negative across all time frames. That indicates a lingering bias for put options.

“The skew picture is clear: institutions are buying downside protection and selling upside calls. After the Iran war headlines, some of the tail risk has been priced out, so skew has eased, but the underlying flow remains firmly one-directional. Demand for puts, supply of calls,” Maxime Seiler, CEO of STS Digital, a principal trading firm specializing in digital asset derivatives, told CoinDesk.

The U.S. consumer price index (CPI) for March is expected to show a marked increase in annualized inflation to well over 3%, led primarily by rising energy prices.

That shouldn’t come as a surprise, given that the Iran war led to a sharp surge in oil and gasoline prices worldwide. Still, markets may see volatility if the core figure, which excludes food and energy, blows past the annualized 2.7% estimate. That would further cement the case for Fed rate increases, potentially weighing on risk assets such as BTC.

Beyond CPI, the weekend meeting between Iranian and U.S. delegates in Pakistan holds the key to financial market stability. BTC’s rally will likely accelerate if they find a way to end the war and normalize oil tanker traffic through the Strait of Hormuz. The first cues could come through Hyperliquid-listed oil perpetual futures. Stay alert!

What’s trending

Today’s signal

The chart shows swings in the ICE BofA US Bond Market Option Volatility Estimate Index (MOVE), which reflects volatility in U.S. Treasury futures.

Sharp spikes in the index indicate rising uncertainty around inflation, interest rates or macro shocks. Treasury notes anchor the global finance and collateral and credit creation. Hence, increased turbulence in U.S. bonds often coincides with tighter financial conditions and broader risk-off sentiment spilling into equities, credit, and crypto markets.

The index popped in March, rising to 115% from 73% only to drop back to 74% this month. It showed that the world’s most important bond market is calm again, a green signal for crypto bulls.

Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today .

For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead“.

Key Points

• Brett Redfearn, former director of the SEC’s Division of Trading and Markets, has been named president and board member at Securitize
• Redfearn’s career spans key roles at the SEC, JPMorgan, and Coinbase before founding his own advisory firm
• The strategic appointment arrives as Securitize moves toward going public through a merger with Cantor Equity Partners II
• In March 2026, Securitize reached $3.85 billion in distributed asset value
• Tokenized equities exceeded $1 billion in aggregate onchain value during the same period

Digital asset tokenization platform Securitize has brought Brett Redfearn on board as its president and newest board member. The company made the announcement Thursday amid preparations for its anticipated transition to public markets.

Redfearn’s background includes leading the SEC’s Division of Trading and Markets as director. His professional journey also features more than ten years at JPMorgan, followed by a position as Coinbase’s head of capital markets.

Most recently, Redfearn established Panorama Financial Markets Advisory, providing strategic counsel to exchanges and asset management firms. He had already been contributing to Securitize through his role on the company’s advisory board.

Securitize specializes in converting conventional financial instruments — including investment funds and private credit products — into digital tokens built on blockchain technology. These tokenized assets offer enhanced tradability and accelerated settlement compared to their traditional counterparts.

Carlos Domingo, Securitize’s CEO, praised the new appointment. “Brett has played a pivotal role in shaping how contemporary markets operate and maintain compliance,” Domingo stated.

Redfearn will collaborate with Securitize’s executive team to expand the platform’s capabilities in issuance, trading infrastructure, and fund administration services.

Expanding Market for Tokenized Real-World Assets

The leadership addition coincides with accelerating interest in tokenizing real-world assets. Data from analytics platform RWA.xyz shows that Securitize achieved $3.85 billion in distributed asset value by March 2026.

Tokenized equities simultaneously surpassed the $1 billion threshold in total onchain valuation during this timeframe. Financial institutions and investment firms continue exploring blockchain-based settlement systems to enhance transaction speed and broaden market participation.

Securitize aims to serve as a compliant gateway connecting established financial enterprises with emerging digital asset technology.

Journey Toward Public Markets

The firm intends to enter public markets via a business combination agreement with Cantor Equity Partners II. Redfearn’s addition is viewed as bolstering Securitize’s regulatory standing in advance of this transition.

Redfearn represents just one example of regulators transitioning to the cryptocurrency sector. Caroline Pham, former acting chair of the CFTC, departed in December to take a position at crypto payments provider MoonPay.

Separately, the SEC revealed Wednesday that David Woodcock will assume the director of Enforcement role effective May 4, succeeding interim head Sam Waldon.

Various U.S. legislators have pressed SEC Chair Paul Atkins regarding the departure of former enforcement director Margaret Ryan. Some congressional members suspect her exit may relate to the SEC’s decision to withdraw multiple cryptocurrency enforcement actions, including proceedings against Tron founder Justin Sun.

Redfearn’s selection at Securitize unfolds as the regulatory landscape surrounding tokenized assets evolves through both regulatory agencies and legislative bodies.

• Cryptocurrencies now fall under Japan’s securities-style financial laws.
• Insider trading rules and stricter disclosures will apply.
• Lower taxes may boost investor and institutional participation.

Japan has taken a major step in reshaping how it treats cryptocurrencies.

A new bill approved by the government moves cryptocurrencies into the category of financial assets, placing them closer to traditional investment products such as stocks and bonds.

Following the approval, Japan now no longer views crypto just as a payment tool, but as part of its wider financial system.

This change is expected to have a wide impact on exchanges, investors, and crypto companies operating in Japan.

A shift from payment tools to financial instruments

For years, cryptocurrencies in Japan were mainly treated as a means of payment under a lighter regulatory framework. That approach is now being replaced with a more structured system based on financial market rules.

Under the new bill, cryptocurrencies will fall under the Financial Instruments and Exchange Act.

This is the same legal framework used to regulate traditional securities. In simple terms, crypto is being pulled into the same category as regulated financial products like equities.

This change is not just about classification. It also changes how the market is expected to behave.

Cryptocurrency exchange platforms and issuers will now be required to follow stricter rules around transparency, reporting, and operational conduct.

The aim is to make the crypto market function with the same level of structure and accountability seen in conventional financial markets.

Stronger investor protection and market discipline

One of the most important parts of the new framework is the introduction of stricter rules around market fairness.

The bill introduces restrictions similar to those seen in stock markets, including clear prohibitions on insider trading in crypto markets.

This means individuals with access to non-public information about tokens or projects will not be allowed to use that information for trading advantage, which will greatly reduce manipulation and unfair practices in the sector.

In addition, crypto companies and exchanges will face tougher disclosure requirements. They are expected to provide regular and detailed information about their operations and token-related activities.

This is designed to give investors a clearer picture of what they are dealing with before making financial decisions.

Penalties are also being strengthened.

Operating without proper registration or violating market rules can now lead to heavier fines and stricter legal consequences, including prison sentences in serious cases.

The intention is to discourage bad actors and improve overall trust in the system.

These changes reflect a broader effort to build a safer trading environment as Japan tries to reduce risk in a market that has often been criticised for volatility and lack of transparency.

Cryptocurrency tax changes

Alongside regulatory reform, there is also discussion around tax adjustments that could make crypto investment more attractive.

One of the key expected changes is a shift toward a flat capital gains tax rate of around 20%.

This would bring crypto taxation closer to the system used for traditional investments and significantly lower the burden compared to previous progressive rates.

A simpler and more predictable tax structure could encourage more individual and institutional participation in the market. It also removes one of the long-standing barriers for investors who were hesitant due to complex tax obligations.

At the same time, the new legal framework opens the door for greater institutional involvement.

With crypto now treated as a financial asset, banks, asset managers, and investment firms may find it easier to enter the market.

This could eventually lead to the development of regulated crypto investment products, including exchange-traded funds.

The broader shift in Japan’s financial strategy

Japan’s decision is part of a larger effort to modernise its financial system.

By aligning crypto with traditional financial instruments, the country is building a framework that supports both innovation and regulation at the same time.

This move also positions Japan as one of the more structured crypto markets globally.

While some regions continue to debate how to regulate digital assets, Japan is moving ahead with a clear legal classification and enforcement structure.

The long-term goal appears to be creating a stable environment where digital assets can grow under established financial rules.

If successful, this approach could attract more global capital and strengthen Japan’s position in the evolving digital economy.

Covenant AI, a developer operating on Bittensor’s subnet ecosystem, announced on Friday that it is leaving the decentralized AI network, accusing governance of not being meaningfully distributed and questioning whether the project can sustain its decentralization claims. In a post on X, Covenant AI founder Sam Dare said the team could no longer build on or raise for Bittensor because governance wasn’t truly distributed. “It is decentralization theatre,” Dare wrote, alleging that Jacob Steeves—known as Const—maintains effective control over the governance triad, resists meaningful transfers of authority, and deploys changes unilaterally without process or consensus.

The dispute centers on the core selling point of Bittensor: true decentralization. Covenant AI contends that Steeves wields outsized influence over governance and network operations, an accusation Steeves has denied. Bittensor describes its governance as a transitional framework, featuring a “Triumvirate” of Opentensor Foundation employees alongside a senate, rather than a fully open, fully distributed model. The company’s documentation frames this as a staged approach rather than a completed, decentralized system.

Key takeaways

• Covenant AI is exiting Bittensor, publicly challenging the project’s claim of decentralization and accusing governance of concentrated power under a Triumvirate-led structure.
• The core accusation centers on control over governance and network operations, with Covenant AI alleging unilateral decision-making and resistance to meaningful authority transfers.
• In response, Bittensor founder Jacob Steeves denies suspending subnet operations or granting special privileges, and says dissenting actions are either mischaracterized or misinterpreted—he also contends that certain token-related moves were ordinary market activity visible on-chain.
• The dispute has coincided with a material move in TAO’s price and trading volume, reflecting broader investor attention as the governance rift unfolds.

Governance under the lens: what changed and what stayed the same

The heart of Covenant AI’s claim is that the governance design of Bittensor—ostensibly built to be open and composite—operates in practice as a closed system. Covenant AI argues that the Triumvirate, comprising key Opentensor Foundation figures, plus a senate, retains root permissions and can steer network modifications without broad consensus. Dare framed the arrangement as incompatible with the decentralization narrative that attracted builders and financiers to the project, suggesting that the structure undermines the very premise of distributed governance.

Steeves, for his part, pushes back on the description of centralized control. In his public responses, he argued that he does not wield privileges beyond those of ordinary TAO token holders and that he cannot suspend subnet emissions. He also contends that any large token movements he has executed were disclosed through on-chain activity and thus transparent to the community. In a Friday X post, Steeves responded to Covenant AI’s claims by stating he had liquidated some of his “alpha holdings” on subnets that were not actively running or were on burn-heavy code, asserting that such actions alter emissions in a manner consistent with typical market dynamics on Bittensor.

Nevertheless, Covenant AI asserts that governance friction has tangible effects on project momentum. Emissions controls and moderation rights are among the specific levers cited as evidence of centralized influence, with Covenant AI describing moves as attempts to pressure or stifle the subnet’s development trajectory. Steeves counters by noting that moderation permissions were temporarily restricted and later restored, and he emphasizes that changes in on-chain token economics would be visible to observers. He also argues that his actions fall within the rights of token holders and do not amount to a covert governance coup.

Market signals and on-chain behavior amid the dispute

The governance dispute has spilled into market sentiment around TAO, Bittensor’s native token. TAO’s price had been under pressure, slipping roughly 18% over the preceding 24 hours as of Friday morning in market data cited by Cointelegraph. The selling momentum intensified in the day leading up to Covenant AI’s departure announcement, with on-chain sell volume hitting a level not seen since December 2024. Analysts framed the price and flow dynamics as a potential reflection of investors adjusting exposure to a project undergoing a governance upheaval.

External observers echoed the sense that the departure could be more than a PR dispute. One crypto analyst noted on X that the timing and scale of Covenant AI’s exit appeared deliberate, describing it as a calculated move rather than a coincidence. While market dynamics can be noisy, the episode underscores how governance tensions in decentralized projects can translate into tangible liquidity and price reactions, particularly when a builder with an active subnet exits.

Cointelegraph sought comment from Covenant AI and Bittensor for responses to the evolving narrative but did not receive official remarks by publication time. The broader market context remains relevant: governance design that emphasizes decentralization is increasingly scrutinized as multiple teams seek to attract talent and funding without compromising core distributed principles. The exchange between Covenant AI and Steeves—along with on-chain activity tied to token emissions and governance permissions—provides a live case study in how decentralization ambitions interact with practical governance controls.

Broader implications for decentralization in practice

Industry observers note that the Covenant AI episode highlights a broader, ongoing debate about the practical meaning of decentralization in long-running blockchain and Web3 projects. David and Daniil Liberman, co-founders of the Gonka protocol, described a tension that will resonate with builders across ecosystems: if a project’s infrastructure can be used against it because control rests with a concentrated subset of actors, does the model remain genuinely decentralized? Their assessment emphasizes the need for governance that can withstand complex, real-world pressures without becoming opaque or inert in the face of conflicts between contributors and governance stewards.

The debate also harks back to earlier public moments in Bittensor’s story. For instance, Nvidia CEO Jensen Huang publicly celebrated Covenant AI’s milestone in training a decentralized large language model on Bittensor Subnet 3, calling it a remarkable technical achievement. That historic spotlight contrasted with the current governance friction, illustrating the dual aspects of decentralization narratives: the technical frontier that attracts builders, and the governance framework that must sustain it without central choke points.

As the community digests the tensions, readers should watch for how Bittensor’s governance documents evolve and whether any reforms are pursued to broaden participation or formalize oversight. The resolution, or lack thereof, will influence not only Covenant AI’s future on the network but also how other builders evaluate the feasibility of heavily multi-party, permissioned decentralization models in practice. Observers will be mindful of potential new on-chain disclosures, governance proposals, or changes to subnet permissions that could redefine participation rules for developers and token holders alike.

In this moment, the core question remains: can a decentralized AI network reconcile rapid innovation with a governance framework that remains genuinely open to diverse contributors, or will episodes like Covenant AI’s departure redefine decentralization as a continuous negotiation between ambitious builders and centralized control points?

What to watch next: keep an eye on any updates to Bittensor’s governance structure, changes in subnet emission policies, and new participation rules for subnets. The outcome will influence how other multi-stakeholder networks balance openness with accountability, and it will shape investor sentiment around projects that promise decentralization as a core value proposition.

The crypto market held steady on Friday, with bitcoin BTC$72,158.51 trading little changed at $71,700 and ether (ETH) at $2,180, extending the low-volatility price action that has characterized the past few months.

Daily Bollinger bands, a technical analysis tool that measures market volatility, are at their narrowest since early 2024. In the past, such a tight range — bitcoin has held between $63,000 and $75,000 since early February — has ended with a 40% move in price, according crypto analyst Eric Crown.

A breakout above $75,000 in bitcoin’s case would trigger upside momentum by trapping traders who are short and need to buy at market prices to cover their positions, while a short-term move below $70,000 will liquidate around $200 million worth of long positions that are betting on the breakout, according to CoinGlass’ liquidation heatmap.

One key catalyst on Friday will be the U.S. consumer price index (CPI) data. March inflation is estimated at 3.3% year-on-year, driven by surging energy prices. High inflation figures tend to spur upside price action in the U.S. dollar, which could weigh on risk assets like bitcoin.

Derivatives positioning

• Open interest (OI) in bitcoin futures increased by 1%, with average perpetual funding rates on major exchanges at their highest since Feb. 4. This shows a strengthening investor appetite for bullish exposure.
• Other major cryptocurrencies were mixed. OI increased slightly in XRP (XRP) while holding flat in ether (ETH) and solana (SOL). HYPE and AVAX are other standouts, displaying a bullish combination of OI growth and positive funding rates.
• The privacy-focused ZEC, meanwhile, shows OI growth and negative rates, a sign that traders are continuing to short futures and hedge downside risks even as the spot price rallies. ZEC’s price rose to nearly $400, the highest since Jan. 28.
• There seems to be no end to the downtrend in BTC’s 30-day implied volatility index, BVIV. The measure has slipped to 45%, indicating market calm. It has dropped in a near-straight line from 58% on March 31. Ether’s volatility index shows a similar pattern.
• The decline in volatility is largely led by ETF-related flows. “The ETF complex has created a feedback loop: institutions sell calls for yield, which suppresses upside vol, which makes selling more calls even more attractive. The impact is still subtle, but the direction of travel is clear. Bitcoin’s options market is maturing into a structurally skewed market, just like equities,” STS Digital’s CEO Maxime Seiler told CoinDesk.
• The implied volatility term structure is flat for the next six months and then rises from September, suggesting the market is prepping for a quiet few months in between.
• On Deribit, BTC and ETH options continue to display put skews, although it’s much weaker than a week ago as traders chase upside bets, particularly the BTC call option at the $80,000 strike.

Token talk

• CoinDesk’s DeFi Select Index (DFX) is the best-performing benchmark on Friday, rising by 0.38% while the bitcoin-dominant CoinDesk 5 (CD5) is down by a quarter of a percent.
• The CoinDesk Computing Select Index (CPUS) is the worst performer, losing 1.4% after it was dragged down by bittensor (TAO), which lost more than 12% since midnight UTC after Covenant AI, one of the network’s largest subnet developers, said it was leaving Bittensor.
• “The entire premise of Bittensor, the promise that drew builders, miners, validators, and investors into this ecosystem, is that no single entity controls it,” Covenant AI founder Sam Dare wrote on X. “That promise is a lie.”
• One token that shrugged off broader crypto market apathy was DASH, which surged more than 19% since midnight UTC, contributing to a 24-hour gain of 34% as traders rotated back into the privacy sector.

The Japanese government amended the Financial Instruments and Exchange Act on Friday to classify crypto assets as financial instruments.

The amendment also bans insider trading and other activities that involve buying and selling based on undisclosed information, Nikkei reported.

The amended act will also now require cryptocurrency “issuers” to be more transparent and disclose information once a year.

Japan’s Financial Services Agency has previously regulated crypto assets under the Payment and Settlement Act, citing their potential use as a means of payment. However, the regulations and classifications have been updated to reflect increasing institutional investment in the asset class.

By reclassifying crypto as a financial instrument rather than just a payment method, Japan is moving crypto out of the experimental payments category and into the same league as its stock market.

Crypto under the TradFi umbrella

“We will expand the supply of growth capital in response to changes in financial and capital markets, and ensure market fairness, transparency, and investor protection,” said Finance Minister Satsuki Katayama at a press conference after the Cabinet meeting. 

Fines and sentences for unregistered crypto exchanges have also increased under the amendment. 

Related: Prediction markets are testing legal limits in strict Asian markets

Japan signaled that it was bringing crypto under the same umbrella as traditional finance in January when Katayama said, “To ensure citizens benefit from digital and blockchain-based assets, the role of exchanges and market infrastructure will be essential.” 

The government backed plans in December to significantly reduce Japan’s maximum tax rate on crypto profits, with a flat rate of 20% across the board.  

Crypto ETFs coming to Japan

Japan is also planning to legalize crypto exchange-traded funds (ETFs) by 2028, marking a major shift toward mainstream crypto adoption, according to a January report. 

Major financial groups, including Nomura Holdings and SBI Holdings, are among the first companies expected to develop crypto-linked exchange-traded products. 

Asia Express: Phantom Bitcoin checks, China tracks tax on blockchain