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BitMEX co-founder and Maelstrom chief investment officer Arthur Hayes argues in a new blog post that Bitcoin performed exactly as expected in 2025, tracking the decline in dollar liquidity while gold and technology stocks diverged due to central bank buying and U.S. government AI policy.

What Happened: Hayes Defends Bitcoin's 2025 Performance

The former BitMEX CEO published his analysis on his Substack blog, presenting what he called a framework for understanding why Bitcoin underperformed gold and the Nasdaq 100 in the first year of President Donald Trump's second term.

Hayes, who co-founded BitMEX in 2014 and now runs the family office investment fund Maelstrom, attributed gold's surge to price-insensitive central bank purchases that accelerated after the U.S. froze Russian treasury holdings in 2022.

He pointed to data showing that gold exports accounted for more than 100% of the December 2025 improvement in America's trade deficit.

The Nasdaq's resilience, Hayes argued, stems from what he described as effective nationalization of AI-related industries.

He wrote that Trump's economic platform treats AI dominance as essential to U.S. interests, directing capital toward the sector regardless of traditional return-on-equity metrics.

Also Read: CFTC Takes Control As Senate Committee Fast-Tracks Landmark Bitcoin Regulation Framework

Why It Matters: Dollar Liquidity Expansion Expected

Hayes projects that three factors will drive significant dollar liquidity growth in 2026: Federal Reserve balance sheet expansion through Reserve Management Purchases, increased commercial bank lending to strategic industries, and mortgage rate reductions.

He noted that the Fed's balance sheet bottomed in December when quantitative tightening ended, with RMP adding at least $40 billion monthly.

Commercial bank loan growth, measured by the Fed's Other Deposits and Liabilities metric, began accelerating in the fourth quarter of 2025.

The Maelstrom fund entered 2026 with near-maximum risk exposure, Hayes disclosed, adding long positions in Strategy and Metaplanet to gain leveraged Bitcoin exposure. He also revealed continued accumulation of Zcash, describing recent developer departures from the Electric Coin Company as a buying opportunity rather than a bearish signal.

Read Next: Will The Supreme Court Spark Bitcoin's Breakout? $150B Tariff Case Has Traders On Edge

Brian Armstrong said Coinbase can no longer support the U.S. Senate’s crypto market structure bill as currently drafted, a move revealing growing fractures between lawmakers and the cryptocurrency industry over how digital assets should be regulated.

Armstrong said the company reviewed the Senate Banking Committee draft over the past 48 hours and concluded that the bill would be “materially worse than the status quo.”

While acknowledging the bipartisan effort behind the legislation, he said Coinbase would rather see no bill passed than support a framework it believes would damage innovation and competition in the U.S. crypto sector.

Concerns Over Tokenization, DeFi And Stablecoins

In a statement on X, Armstrong outlined several provisions he said make the bill unacceptable in its current form.

He argued that the draft would amount to a de facto ban on tokenized equities, restrict decentralized finance in ways that expand government access to user financial data, and weaken the authority of the Commodity Futures Trading Commission (CFTC) by making it subordinate to the Securities and Exchange Commission (SEC).

Armstrong also criticized proposed amendments that would limit rewards on stablecoins, saying such measures would advantage banks by restricting competition from crypto-native payment and yield products.

Stablecoin provisions have already emerged as one of the most contentious elements of the Senate draft, with banking groups warning that rewards could pull deposits from insured institutions, while crypto firms argue that banning them would be anti-competitive.

Despite withdrawing support, Armstrong said he remains optimistic that lawmakers can reach a better outcome through continued negotiation and engagement.

Bill Aimed To Deliver Clarity After Years Of Regulatory Uncertainty

The Senate draft is part of a broader effort to establish a statutory framework for crypto markets after years of enforcement-led regulation.

Lawmakers have sought to clarify when digital assets are considered securities or commodities and to define regulatory jurisdiction between the SEC and CFTC, a central issue following high-profile enforcement actions and exchange collapses.

Earlier this week, the Senate Agriculture Committee set a timetable to release its own market structure text and hold a markup later this month, signaling momentum toward formal legislative debate.

Industry executives previously told Yellow.com that clearer statutory rules could reduce legal risk and encourage institutional participation, provided the framework delivers certainty rather than new forms of ambiguity.

Read Next: Institutions Now Control 82% of Crypto Trading As Data Reveals Massive Market Structure Shift

Bitcoin (BTC) breaking the $96,000 level on Wednesday has been supported more by market structure than by sustained demand, according to a report from Glassnode, which warns that volatility risk is being postponed rather than resolved.

Bitcoin on Wednesday evening was trading at $97,500, up 3.5% at the time of writing.

After posting two consecutive higher highs, Bitcoin’s advance carried price directly into a historically significant overhead supply zone between roughly $93,000 and $110,000.

This range is dominated by long-term holder supply accumulated during April to July 2025, a period marked by sustained distribution near cycle highs.

Overhead Supply Remains The Key Test

Glassnode notes that rallies since November have repeatedly stalled at the lower boundary of this supply cluster, as long-term holders sold into strength.

While long-term holders remain net sellers, the intensity of distribution has slowed materially.

Net realized profit among long-term holders has declined to around 12,800 BTC per week, down sharply from peaks above 100,000 BTC per week during prior distribution phases.

The moderation suggests sell-side pressure is easing, but Glassnode cautions that absorption of this overhead supply remains a prerequisite for any durable trend reversal.

Spot Flows Improve, But Conviction Remains Uneven

Spot market behavior has turned more constructive following the late-2025 drawdown.

Aggregate exchange flows and Binance-led cumulative volume delta have shifted into buy-dominant regimes, indicating that market participants are increasingly absorbing supply rather than distributing into rallies.

Also Read: Leading Crypto Builders Say Senate Bill Reduces Risk But Devil Is In Stablecoin Details

At the same time, selling pressure from Coinbase, a consistent source of distribution during the consolidation phase, has eased materially.

Despite these improvements, Glassnode emphasizes that spot accumulation has yet to become persistent, a condition typically observed during sustained bull phases.

Derivatives Positioning Drives Recent Upside

The report attributes much of the recent push into the $97,000 region to derivatives-driven mechanics rather than organic demand.

Short liquidations occurred on relatively thin futures volume, allowing modest positioning shifts to generate outsized price moves.

Futures turnover remains well below the elevated levels seen earlier in 2025, leaving the market sensitive to changes in liquidity and positioning.

Without sustained spot participation, Glassnode warns that rallies driven by forced covering risk fading once mechanical buying pressure subsides.

Volatility Is Deferred, Not Eliminated

Options markets reinforce the picture of unresolved risk.

Implied volatility remains low across maturities, but downside skew continues to favor puts, reflecting persistent demand for longer-dated protection.

Dealers remain positioned short gamma around current spot levels, a structure that can amplify price moves once momentum develops.

Glassnode describes this setup as a fragile equilibrium, where calm price action reflects positioning rather than confidence.

The report further states that while structural conditions are improving, Bitcoin remains vulnerable to abrupt repricing until overhead supply is absorbed and sustained spot accumulation re-emerges.

Read Next: SEC Drops Zcash Investigation After Two Years As Trump Administration Dismisses 60% Of Crypto Cases

The U.S. Securities and Exchange Commission has concluded its investigation into the Zcash Foundation (ZEC) and will take no enforcement action, ending a probe that began in August 2023 over whether elements of the privacy-focused project’s funding and governance may have violated U.S. securities laws.

The decision removes a regulatory overhang that had weighed on the Zcash ecosystem for more than two years.

The SEC’s decision comes against a backdrop of broader shifts in U.S. crypto enforcement policy under the Trump administration, during which the agency has dropped or paused a significant portion of cryptocurrency-related cases.

The SEC dismissed, paused or reduced enforcement actions in more than 60% of active crypto cases after President Donald Trump returned to office, a stark contrast with prior enforcement patterns, particularly under the previous chair.

Years-Long Probe Ends With No Charges

The Zcash Foundation announced that the SEC informed it it would not recommend any enforcement action or regulatory changes related to the inquiry designated “In the Matter of Certain Crypto Asset Offerings (SF-04569)”.

The subpoena issued in August 2023 sought information on potential securities law implications tied to Zcash’s governance and token distribution mechanisms.

The resolution removes legal uncertainty that had shadowed the project and coincides with renewed market interest in privacy-focused digital assets.

ZEC’s price rallied following the announcement, trading up over 12% over the last 24 hours, according to CoinGecko.

Governance Turmoil Weighs On Zcash Ecosystem

The regulatory relief arrives at a turbulent moment for the Zcash community.

Also Read: Leading Crypto Builders Say Senate Bill Reduces Risk But Devil Is In Stablecoin Details

Over the past few weeks, the protocol has been beset by internal governance conflict.

The entire core development team at Electric Coin Company (ECC) resigned after disputes with the nonprofit Bootstrap board over mission alignment and governance, prompting a sharp sell-off in ZEC’s price and raising questions about project stability.

Developer activity tied to Zcash has fallen to its lowest levels in years, coinciding with a roughly 40% drop in ZEC’s market value over two months as of early January 2026, according to on-chain analytics.

The exits have also sparked the launch of a new wallet project by some former developers, underscoring fractures within the ecosystem.

In parallel, Monero (XMR), another privacy-focused asset, has regained prominence in recent trading, reclaiming the top position among privacy coins by market capitalization as Zcash experiences headwinds.

Enforcement Landscape Shifts Amid Political Change

The conclusion of the Zcash probe reflects a broader regulatory shift.

Under Trump’s administration, the SEC has shown a pattern of scaling back or dismissing high-profile enforcement actions initiated under earlier leadership.

For example, the agency withdrew its civil lawsuit against Binance, one of the most consequential crypto enforcement actions in recent years and similarly moved to drop or pause cases involving other major firms.

Read Next: Institutions Now Control 82% of Crypto Trading As Data Reveals Massive Market Structure Shift

U.S. senators this week unveiled a draft bill aimed at defining how cryptocurrencies are regulated in the United States, a move that industry participants say could begin to resolve years of legal ambiguity that have constrained investment, product development and institutional participation.

The proposal seeks to establish clearer definitions for digital assets and formally divide oversight responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Under the draft, the CFTC would gain authority over spot markets for digital commodities, while the SEC would retain jurisdiction over securities and fundraising activity, a regulatory split that has been central to policy debate for years.

Industry executives broadly describe the draft as a meaningful shift away from enforcement-led regulation toward statutory clarity, even as questions remain over how far the legislation will go once amendments and political negotiations begin.

A Long-Awaited Attempt To Define Regulatory Boundaries

Executives across the crypto industry say the draft bill addresses one of the sector’s most persistent challenges: uncertainty over which regulator has authority over which assets and activities.

That ambiguity, they argue, has discouraged institutional capital and slowed product development, particularly in the U.S.

Speaking with Yellow.com. Hedy Wang, CEO and co-founder of Block Street, said the draft resembles a long-overdue rulebook for the industry.

In her view, clearer definitions of digital assets and a more explicit allocation of regulatory authority could reduce hesitation among institutional investors that have remained on the sidelines due to legal risk.

Others stressed that the value of the bill lies in its effort to deliver clarity through statute rather than future regulatory interpretation.

Rachel Lin, CEO of SynFutures, said drawing clear lines between securities and commodities and defining the CFTC’s role in spot markets, would provide builders and investors with the certainty they have repeatedly called for.

Also Read: Will The Supreme Court Spark Bitcoin's Breakout? $150B Tariff Case Has Traders On Edge

She added that unresolved details, particularly around stablecoins, will be critical in determining whether the framework promotes competition or reinforces existing financial incumbents.

Stablecoins Emerge As A Key Fault Line

The draft legislation also tackles stablecoin regulation, an area that has generated sustained friction between crypto firms and the banking sector.

Under the proposal, crypto companies would be prohibited from paying interest solely for holding stablecoins, but could still offer rewards tied to activities such as payments or loyalty programs.

The SEC and CFTC would be directed to issue joint disclosure rules governing such incentives.

Banking groups have argued that interest-bearing stablecoins could draw deposits away from insured banks and threaten financial stability, while crypto advocates counter that banning rewards would stifle innovation and limit consumer choice.

David Carvalho, CEO of Naoris Protocol, said the bill reflects a shift from years of abstract discussion to concrete rulemaking.

He noted that uncertainty over which regulator might assert authority has previously caused teams to delay or abandon projects.

While cautioning that legislative compromises could dilute the bill, Carvalho said even partial clarity could materially reduce risk for companies operating in the U.S.

Legislative Momentum Builds, Outcome Still Uncertain

The release of the draft coincides with procedural movement in the Senate.

The Senate Agriculture Committee, which oversees the CFTC, has set a timetable to release legislative text by January 21 and hold a markup on January 27, marking the first fixed schedule for advancing crypto market structure legislation.

Lawmakers have been working to reconcile competing proposals, including the House-passed Digital Asset Market Clarity Act, which similarly seeks to divide oversight between the SEC and CFTC.

Whether the Senate bill ultimately becomes law remains uncertain as Congress balances competing interests ahead of the 2026 midterm elections.

Still, industry participants say the combination of a detailed draft and a defined legislative process marks the clearest signal yet that Congress is attempting to replace years of regulatory uncertainty with a structured framework for U.S. crypto markets.

Read Next: Wintermute Warns Altcoin Era Over As Institutions Take Over Bitcoin & Ether

Bermuda-based tokenized reinsurer OnRe announced it delegated $150 million to Rhodium Re, a Dubai-based Managing General Agent, marking the firm's strategic push into Middle East reinsurance markets.

The partnership aims to connect OnRe's tokenized capital base with underwriting opportunities across Gulf Cooperation Council countries including UAE, Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman.

OnRe operates through ONyc, a yield-bearing token that targets 16% annual returns sourced from reinsurance performance and collateral assets.

What Happened

Rhodium Re is regulated by Dubai Financial Services Authority and based in Dubai International Financial Centre, providing OnRe with regional underwriting expertise and established carrier relationships across GCC markets.

The MGA will handle facultative, treaty, and retrocession reinsurance placement, extending beyond regional business to build a global property and specialty portfolio for OnRe's distribution network.

Dan Roberts, OnRe co-founder and CEO, stated the Middle East represents a priority growth market due to economic momentum and practical regulatory frameworks creating opportunities for reinsurers with global capital capabilities.

Tunde Olowofila, Senior Executive Officer at Rhodium Re, described the partnership as bringing capital strength and technical capability to the insurance value chain.

Read also: Chainlink Gains 4% Following ETF Launch And Senate Banking Committee Commodity Classification

Tokenized Reinsurance Context

OnRe is a licensed collateralized reinsurer connecting alternative capital with the $800 billion global property and casualty reinsurance market through blockchain infrastructure on Solana.

The firm recently appointed Apex Group as independent attestation provider for monthly verification of ONyc's net asset value and treasury balances held across traditional financial accounts and onchain infrastructure.

Alternative reinsurance capital reached approximately $121 billion as of June 2025, according to Moody's, with catastrophe bonds accounting for roughly 45% of that total.

OnRe developed ONyc in partnership with Ethena, Solana Ventures, and RockawayX, offering stablecoin holders exposure to reinsurance premiums and collateral yields independent of cryptocurrency market cycles.

Read also: Why Did Arthur Hayes Predict ENA Will Hit $1 After Upbit Listing?

Bitwise Asset Management's spot Chainlink ETF began trading on NYSE Arca under ticker CLNK, coinciding with Senate Banking Committee draft legislation that grants LINK the same commodity classification as Bitcoin.

Chainlink rose approximately 4% over 24 hours following the dual announcements, while trading volume increased 45% and futures open interest climbed to $665 million.

The ETF launched with $2.5 million in seed capital at $25 per share and offers a complete fee waiver for three months on assets up to $500 million, dropping to 0.34% management fees afterward.

Commodity Classification Framework

The Senate Banking Committee draft bill released Tuesday designates LINK as a "non-ancillary asset" because Grayscale's Chainlink ETF was already trading on major exchanges before January 1, 2026.

This classification treats Chainlink identically to Bitcoin as a commodity under Commodity Futures Trading Commission oversight rather than Securities and Exchange Commission securities regulation.

The designation eliminates SEC disclosure requirements and regulatory uncertainty that previously constrained institutional participation in LINK markets.

XRP, Solana, Dogecoin, Litecoin, and Hedera also qualify under the same framework based on existing ETF products.

Read also: Why Did Arthur Hayes Predict ENA Will Hit $1 After Upbit Listing?

Institutional Exposure Expanding

Grayscale's Chainlink ETF has accumulated $62.22 million in total inflows since launching December 2, 2025, bringing assets under management to $87.64 million.

Coinbase Custody will safeguard LINK holdings for the Bitwise product, while BNY Mellon handles cash custody.

Although LINK staking appears as a secondary objective in regulatory filings, no implementation timeline has been confirmed, with Attestant Ltd. identified as the preferred provider if staking receives approval.

Bitwise manages approximately $15 billion in cryptocurrency assets and continues expanding its regulated altcoin ETF offerings following successful Bitcoin and Ethereum products.

Read next: MANTRA Announces Layoffs Following $6 Billion Token Collapse And Market Pressure

South Korea's largest cryptocurrency exchange Upbit listed Ethena's synthetic stablecoin USDe on Tuesday, prompting BitMEX co-founder Arthur Hayes to predict the project's ENA governance token will reach $1.

The listing occurred days after Dubai's financial regulator excluded USDe from its approved stablecoin framework, highlighting divergent regulatory approaches toward the delta-neutral cryptocurrency.

ENA rose 8.3% following the Upbit announcement, trading at $0.238 at time of publication.

What Happened

Trading for USDe began at 6 p.m. Korean Standard Time on January 14, with pairs available against the Korean won, Bitcoin, and Tether's USDT across the Ethereum network.

Hayes, who serves as founding advisor to Ethena through his family office Maelstrom, responded on social platform X with "Giddy up b*tches! it's time for $ENA = $1."

On-chain analytics show Hayes purchased 1.22 million ENA tokens worth approximately $257,500 in late December 2025, demonstrating sustained conviction in the third-largest stablecoin by market capitalization.

USDe maintains its dollar peg through a delta-neutral structure combining spot cryptocurrency collateral with offsetting short positions in perpetual futures contracts, distinguishing it from traditional fiat-backed stablecoins.

Regulatory Divergence

The Upbit listing came just two days after Dubai's Financial Services Authority updated its Crypto Token Regulatory Framework on January 12, establishing stricter stablecoin standards.

The DFSA reserves "fiat crypto tokens" designation exclusively for stablecoins backed by fiat currency reserves held in segregated accounts with regulated custodians.

Elizabeth Wallace, DFSA's associate director for policy and legal, stated that algorithmic stablecoins lack transparency regarding operations and redemption mechanisms.

Wallace confirmed USDe would not meet the Dubai International Financial Centre's stablecoin definition but clarified the token remains permissible as a general crypto asset without regulatory treatment afforded to fiat-backed alternatives.

The DFSA's approved list includes only Circle's USDC and EURC, along with Ripple's RLUSD, requiring reserves equal to outstanding tokens held in highly liquid assets with minimal credit risk.

MANTRA CEO John Patrick Mullin announced company-wide restructuring and staff reductions Wednesday, citing an unsustainable cost structure following the project's April 2025 token crash and prolonged market challenges.

The real-world asset tokenization platform will reduce headcount across business development, marketing, HR, and support functions as part of what Mullin described as a shift toward capital efficiency and focused execution.

The OM token currently trades 99% below its peak, with the platform's total value locked declining to $864,857 from a February 2025 high of $4.51 million.

What Happened In April 2025

MANTRA's OM token crashed approximately 90% on April 13, 2025, dropping from over $6 to under $0.50 within hours and erasing more than $6 billion in market capitalization.

The company attributed the crash to "reckless forced liquidations" by centralized exchanges during low-liquidity trading hours, though the event sparked widespread speculation about insider selling and token concentration issues.

Mullin referenced these events Wednesday as "incredibly unfortunate and frankly unfair," acknowledging they combined with increased competition and shifting market dynamics to render the company's cost structure unsustainable.

Read also: How DZ Bank's MiCAR License Opens Crypto Trading To Millions Of German Banking Customers

Recovery Efforts And Current Position

MANTRA subsequently burned 300 million OM tokens, including 150 million from Mullin's personal allocation, in an attempt to restore community trust and reduce circulating supply.

Last week, the platform launched mantraUSD, a stablecoin backed by short-term U.S. Treasury bills designed as the required currency for accessing real-world asset products within MANTRA's ecosystem.

The company also reminded users that the ERC-20 version of OM must be migrated to the native MANTRA Chain token before January 15, 2026.

Mullin stated the restructuring aims to align operations with near-term realities while maintaining focus on the platform's position as a regulatory-compliant Layer 1 blockchain for real-world asset tokenization.

Read next: High Roller Teams With Crypto.com For Prediction Markets: Why The $1 Trillion Opportunity Matters

DZ Bank Markets in Crypto-Assets Regulation authorization from Germany's financial regulator BaFin in late December 2025, clearing the path for approximately 700 cooperative banks to offer cryptocurrency trading services.

The approval allows Germany's second-largest bank by assets to operate its meinKrypto platform, which will integrate directly into the VR Banking App used by customers across the cooperative banking network.

Individual Volksbanken and Raiffeisenbanken must now submit their own MiCAR notifications to BaFin before activating the service for retail customers.

Rollout Structure And Initial Offerings

The meinKrypto platform will initially support Bitcoin, Ethereum, Litecoin, and Cardano for self-directed investors rather than traditional advisory channels.

DZ Bank developed the infrastructure with Atruvia, the IT service provider for Germany's cooperative financial group, while custody services will be handled by Boerse Stuttgart Digital and trade execution managed through EUWAX AG.

Each cooperative bank retains individual authority to determine whether to implement the cryptocurrency service, creating a voluntary adoption framework across the network.

Read also: High Roller Teams With Crypto.com For Prediction Markets: Why The $1 Trillion Opportunity Matters

Market Readiness And Regulatory Context

A September 2025 survey by the German Cooperative Banking Association showed 71% of Germany's 670 Volksbanken and Raiffeisenbanken exploring cryptocurrency offerings, up from 54% the previous year.

More than one-third of banks considering cryptocurrency services indicated plans to launch within five months of the survey date.

MiCAR establishes unified regulatory standards for cryptocurrency asset services across the European Union, requiring financial institutions to obtain specific authorizations for different cryptocurrency business activities.

The cooperative banking network serves approximately 30 million customers through over 7,200 branch offices, positioning the potential cryptocurrency service rollout as one of Europe's largest regulated retail cryptocurrency initiatives.

Read next: Ethereum Targets $4,000 After Pattern Breakout But Short-Term Holders Pose Risk

High Roller Technologies signed a binding letter of intent with Crypto.com Derivatives North America to launch event-based prediction markets in the United States, targeting a first-quarter 2026 launch.

The online casino operator will offer prediction market contracts through its HighRoller.com platform, with contracts covering sports, entertainment, and finance events.

Crypto.com Derivatives North America operates as a CFTC-registered exchange and clearinghouse, providing federal regulatory compliance for the partnership.

What Happened

High Roller will serve as an exclusive distribution channel for Crypto.com's prediction contracts, allowing users to trade on real-world event outcomes across multiple categories.

The agreement remains subject to definitive documentation including representations, warranties, and other standard contractual provisions, and the companies acknowledged no assurance exists that final agreements will be reached.

High Roller shares gained 17% Tuesday following the announcement, trading at $3.52 on the New York Stock Exchange.

Read also: Ethereum Targets $4,000 After Pattern Breakout But Short-Term Holders Pose Risk

Why It Matters

Research firm Eilers & Krejcik Gaming projects U.S. prediction markets could reach $1 trillion in annual trading volume when fully mature, with sports-related contracts accounting for approximately $435 billion.

The sector generated approximately $10 billion in trading volume currently, according to Citizens Financial Group analysis, positioning it as an early-stage but rapidly scaling market.

Crypto.com holds CFTC-designated contract market and derivatives clearing organization registrations, distinguishing its prediction offerings from unregulated competitors by operating under federal derivatives frameworks rather than state-by-state gambling regulations.

The partnership marks High Roller's second major expansion announcement in a week, following a sports betting platform agreement with Altenar on January 8.

Read next: Spain's Bankinter Joins €30M Bit2Me Funding Round, Signaling Banking's Crypto Shift

Ethereum gained approximately 7% over 24 hours to $3,328, completing a cup-and-handle breakout that technical analysts say could push the second-largest cryptocurrency toward $4,000.

The breakout occurred on January 13 with expanding volume, a key confirmation signal that distinguishes sustained moves from false breakouts.

The pattern's measured move projects a target around $4,010, though several momentum and on-chain indicators suggest the rally may face resistance before reaching that level.

Technical Structure Confirms Breakout

Ethereum's 12-hour chart shows a completed cup-and-handle formation with a downward-sloping neckline, which required buyers to absorb selling pressure across multiple price levels rather than clearing a single resistance point.

The cryptocurrency pushed through the neckline with strong volume on January 13, validating the pattern according to technical analysis standards.

However, the Relative Strength Index shows a potential bearish divergence where price makes higher highs while RSI makes lower highs, typically signaling weakening momentum.

Between January 6 and January 14, Ethereum's price advanced but RSI failed to confirm that strength, creating conditional downside risk if the divergence completes.

Read also: Spain's Bankinter Joins €30M Bit2Me Funding Round, Signaling Banking's Crypto Shift

On-Chain Metrics Signal Caution

Short-term holder Net Unrealized Profit/Loss has risen to its highest level in approximately two months, indicating more recent buyers are sitting on profits and may be tempted to sell.

The last time this metric peaked in early January, Ethereum declined roughly 6% from $3,295 to $3,090 within days.

However, spent coins activity tracking recently acquired tokens being moved or sold dropped nearly 80% from recent peaks over the past 24 hours, suggesting holders aren't yet distributing despite unrealized profits.

Key Levels To Watch

Holding above $3,250-$3,270 keeps the breakout structure intact, while a sustained move above $3,360-$3,380 would likely nullify the RSI divergence risk and allow momentum to rebuild.

A clean close above this zone would strengthen the case for continuation toward $3,580, then $3,910, and eventually the $4,000-$4,010 target area.

If momentum risk materializes instead, losing $3,250 would weaken the short-term structure with $3,180 and $3,050 becoming relevant as potential support zones.

Read next: Monero Eyes $1,000 Milestone As Privacy Narrative Dominates $3.2T Crypto Market

Bankinter has acquired a minority stake in Bit2Me, joining a €30 million funding round that stablecoin issuer Tether led in August 2025.

The Spanish bank's investment strengthens a growing alliance between traditional finance and regulated cryptocurrency platforms in Europe.

Bankinter now joins fellow Spanish banks BBVA, Unicaja, and Cecabank as shareholders in the Madrid-based exchange.

The partnership aims to explore technological synergies around distributed ledger technology solutions, according to Bit2Me.

What Happened

Bankinter finalized its investment this week, becoming the fourth Spanish banking institution to hold equity in Bit2Me.

The funding round, which Tether led last summer, also included participation from Telefónica, Investcorp, and Inveready.

Bit2Me secured authorization from Spain's securities regulator CNMV on July 29, 2025, becoming the first Spanish-speaking fintech approved as a Crypto-Asset Service Provider under the European Union's Markets in Crypto-Assets regulation.

MiCA, which took full effect in December 2024, establishes harmonized rules for cryptocurrency services across all 27 EU member states.

Read also: Monero Eyes $1,000 Milestone As Privacy Narrative Dominates $3.2T Crypto Market

Why It Matters

The investment reflects traditional banking's calculated approach to cryptocurrency infrastructure under clear regulatory frameworks.

Pablo Casadío, Bit2Me's CFO, said banks can leverage the platform's regulatory expertise rather than compete directly.

"Spain and Europe present an unbeatable scenario, and thanks to our technological and regulatory solidity, Bit2Me is the ideal partner for financial institutions to capitalize on this environment," Casadío stated.

Bankinter's move follows similar strategic positioning by European banks seeking exposure to digital assets through licensed partners.

The exchange now plans to accelerate expansion across the European Union while reinforcing operations in Argentina and other Latin American markets.

With backing from both major Spanish financial institutions and cryptocurrency-native companies like Tether, Bit2Me represents a bridge between traditional finance and digital asset infrastructure operating under EU supervision.

Read next: Why Galaxy Digital Fears the New Senate Crypto Bill Marks a "Historic" Surveillance Leap

The privacy-centric cryptocurrency Monero has broken through a psychological barrier of $700 as traders pivot toward anonymity-focused assets.

This rally coincides with a broader market recovery that pushed the total cryptocurrency capitalization back above the $3.2 trillion mark.

Bitcoin and Ethereum have also reclaimed key levels following a period of high volatility characterized by massive liquidations.

Market data indicates that investors are aggressively buying the dip, fueling a narrative of renewed bullish sentiment for the first quarter of 2026.

Privacy Coins Steal the Spotlight

While major assets typically lead market recoveries, Monero has outshined the top ten cryptocurrencies with a 60% gain over the past week.

Trading volume for the token reached $500 million in the last 24 hours, a fivefold increase compared to December 2025 averages.

This sudden interest in privacy protocols suggests a shift in investor priorities toward decentralized and non-traceable transaction rails.

Analysts note that while Zcash saw initial gains, liquidity is now concentrating heavily within the Monero ecosystem as it targets the $1,000 milestone.

Leverage Flush Primes the Rally

The recent upward movement was accelerated by a massive short squeeze that wiped out over $500 million in leveraged positions.

On-chain data shows that the forced closure of these bearish bets provided the necessary liquidity to propel Bitcoin toward the $95,000 resistance zone.

Ethereum has similarly benefited from this momentum, clearing local obstacles to trade firmly above $3,300.

Derivative markets currently show a steady rise in open interest, signaling that traders are re-entering the market with fresh capital and high confidence.

Why It Matters: The $100K Path

The current reset has effectively removed excess froth from the system, allowing for a more sustainable price discovery phase.

If Bitcoin successfully converts the $95,000 level into support, the path toward the psychological $100,000 target remains the primary focus for the first half of the year.

The surge in Monero's open interest indicates that speculators are increasingly using leverage to maximize gains in high-alpha privacy assets.

Until this speculative demand cools, the "OG" privacy coin appears positioned to lead the altcoin market in the coming weeks.

The U.S. Senate Banking Committee’s draft for a new crypto market structure bill has ignited a firestorm within the digital asset industry.

Galaxy Digital warns that the proposal would grant the Treasury Department the most significant expansion of financial surveillance authority since the 2001 USA Patriot Act.

Released earlier this week by Chairman Tim Scott (R-S.C.), the 278-page text aims to establish a comprehensive regulatory framework for digital assets.

However, analysts argue that the inclusion of aggressive illicit finance provisions could fundamentally alter the privacy landscape for American users and decentralized protocols.

Patriot Act 2.0 for Digital Assets?

At the heart of the controversy is a "special measures" authority that would allow the Treasury to designate specific crypto transactions or jurisdictions as money-laundering concerns.

Unlike traditional banking rules, this framework would enable the government to freeze digital asset transfers for up to 30 days without first obtaining a court order.

Galaxy Digital’s research head, Alex Thorn, noted that these powers extend far beyond existing House-passed legislation.

The bill also targets "distributed ledger application layers," effectively requiring web-based DeFi interfaces to screen wallets and block sanctioned activity as if they were traditional financial institutions.

Read also: The First Bitcoin Treasury Merger Is Here And It Creates A $1.2B BTC Holder

The Battle for Bipartisan Consensus

While the Senate Banking Committee plans to mark up the bill on January 15, the Senate Agriculture Committee has delayed its own session until the end of the month.

Chairman John Boozman (R-Ark.) cited the need for additional time to secure broad bipartisan support, as Democrats push for even stricter ethics and consumer protection clauses.

The Crypto Council for Innovation stated it is reviewing the draft to ensure the final law supports "responsible competition."

However, with provisions that could impose Bank Secrecy Act obligations on DeFi developers, the industry remains wary of a legislative "Trojan Horse" that could stifle innovation.

Read next: CoinGecko Eyes $500M Sale As Crypto M&A Hits Record Levels

Cryptocurrency trading in 2025 was increasingly driven by institutional behavior rather than retail speculation, according to data released by Bitget, highlighting a broader structural change in how centralized exchanges are being used.

Bitget reported $8.17 trillion in derivatives trading volume for the year.

More revealing than headline volume, however, was the change in participation.

Institutional spot trading accounted for 82% of volume by December, up from 39.4% at the start of the year, suggesting professional capital now dominates activity on the exchange.

Institutional Capital Reshapes Liquidity Dynamics

The growing institutional share coincided with deeper order books, tighter spreads, and more consistent liquidity during periods of volatility, according to the exchange’s disclosures.

These characteristics align with broader market trends seen in 2025, as crypto markets became more concentrated and increasingly derivatives-led.

Options and futures activity reflected a shift away from purely directional trading toward risk-managed strategies such as hedging, yield generation, and structured exposure.

That evolution mirrors behavior in traditional capital markets and indicates that crypto trading is increasingly being treated as part of broader portfolio management rather than a standalone speculative activity.

Tokenized Assets Move From Experiment To Usage

Tokenized traditional assets emerged as a material contributor to trading activity.

Bitget reported more than $15 billion in cumulative trading volume for tokenized stock futures in 2025, with daily trading in tokenized equities and other TradFi instruments exceeding $2 billion shortly after launch.

Demand was driven largely by synthetic exposure to U.S. equities during non-market hours and from jurisdictions with limited direct market access.

The scale of activity suggests tokenization is shifting from proof-of-concept toward functional use, particularly during periods of heightened macro sensitivity.

Also Read: CFTC Takes Control As Senate Committee Fast-Tracks Landmark Bitcoin Regulation Framework

On-chain Access And Reserve Flows Signal Trust Shift

On-chain trading also gained traction.

Since launching its on-chain access layer in April, Bitget generated more than $2.4 billion in cumulative on-chain trading volume by year-end, enabling users to trade assets across multiple blockchains from a single account.

Rather than displacing centralized trading, on-chain access appears to be operating as a complementary liquidity layer.

Reserve data referenced by the exchange, drawing on third-party analytics from CryptoQuant and Lookonchain, showed Bitget’s Bitcoin (BTC) reserves increased during 2025, even as total BTC balances across centralized exchanges declined industry-wide.

At several points, the platform ranked among exchanges with the highest net bitcoin inflows, a signal often associated with custodial trust during volatile markets.

Retail behavior also evolved.

While trading volumes skewed institutional, consumer usage increasingly centered on payments and yield products, with the exchange reporting a sharp rise in card spending and stablecoin-based earning activity.

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Ripple has secured preliminary approval for an Electronic Money Institution license from Luxembourg's financial regulator, moving the blockchain payments company closer to offering regulated digital asset services across the European Union under passporting rules.

What Happened: Luxembourg EMI Preliminary Approval

The Commission de Surveillance du Secteur Financier (CSSF) issued Ripple a "green light letter" on Wednesday, signaling conditional authorization to pursue full EMI licensing.

The approval would allow the company to provide payment services in stablecoins and other digital assets throughout the EU, pending final regulatory conditions.

"Gaining our preliminary approval is a pivotal step, enabling Ripple to provide essential digital asset infrastructure to our clients across Europe," said Cassie Craddock, Ripple's managing director for the UK and Europe.

The Luxembourg approval follows by less than a week the company's receipt of EMI and crypto asset business authorizations from the UK's Financial Conduct Authority for its subsidiary Ripple Markets UK.

Also Read: Pakistan Signs Deal With Trump-Linked World Liberty Financial To Explore USD1 Stablecoin Payments

Why It Matters: EU Regulatory Expansion

Ripple is simultaneously pursuing a crypto asset service provider license under the EU's Markets in Crypto-Assets framework, aiming for full MiCA compliance in the coming months.

The Luxembourg and UK approvals add to more than 75 regulatory authorizations the company holds globally, including money transmitter licenses in 43 U.S. states and territories.

"Regulatory clarity is the bedrock of institutional adoption," Craddock said, noting that Luxembourg's approach is positioning the country as a hub for financial innovation.

It’s happening just a week after Ripple got a full EMI license and cryptoasset registration from the UK’s Financial Conduct Authority, so the company is lining up approvals quickly on both sides of the Channel.

Luxembourg may be small, with about 677,717 people, but it matters because so many big companies and banks run important eurozone operations through the country. That’s why an EMI license there can carry real weight, especially if it eventually lets Ripple “passport” services across the EU.

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Pakistan's government announced it has signed a memorandum of understanding with SC Financial Technologies, an entity affiliated with World Liberty Financial — the cryptocurrency venture tied to U.S. President Donald Trump's family — to explore integrating the firm's dollar-pegged USD1 stablecoin into the country's digital payments infrastructure for cross-border transactions.

What Happened: Stablecoin Partnership Deal

The Pakistan Virtual Asset Regulatory Authority disclosed the agreement on Wednesday, describing SC Financial Technologies as an "affiliated entity" of World Liberty.

The deal will enable "dialogue and technical understanding around emerging digital payment architectures," the regulator said.

Zach Witkoff, co-founder and chief executive of World Liberty, traveled to Pakistan for the signing.

He is also CEO of SC Financial Technologies, a Delaware-registered company that co-owns the USD1 stablecoin brand with World Liberty, according to documentation on the stablecoin's reserves from July 2025.

Under the agreement, SC Financial Technologies will work with Pakistan's central bank to integrate USD1 into a regulated digital payments structure. The stablecoin would operate alongside Pakistan's own digital currency infrastructure, according to a source involved in the negotiations.

Also Read: CFTC Takes Control As Senate Committee Fast-Tracks Landmark Bitcoin Regulation Framework

Why It Matters: Sovereign State Adoption

This represents one of the first publicly announced partnerships between World Liberty, which launched in September 2024, and a national government.

"Our focus is to stay ahead of the curve by engaging with credible global players, understanding new financial models, and ensuring that innovation, where explored, is aligned with regulation, stability, and national interest," said Finance Minister Muhammad Aurangzeb.

Pakistan has been pursuing digital currency initiatives to reduce cash usage and improve remittance flows, a critical source of foreign exchange.

The central bank governor said in July the country was preparing to launch a digital currency pilot and is finalizing legislation to regulate virtual assets.

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Large holders of Zcash have quietly accumulated nearly 13% more of the privacy-focused cryptocurrency over the past week as the token attempts to recover from a 30% decline triggered by developer departures and eroding investor confidence in late December.

What Happened: Whale Buying Signals Shift

On-chain data shows addresses holding more than $1 million in crypto assets increased their ZEC balances by approximately 13% over the past week.

These wallets now collectively hold around 9,962 ZEC.

The accumulation coincided with ZEC reclaiming the $403 price level.

Whale buying activity has helped absorb selling pressure from smaller holders during what has been a volatile stretch for the token.

Technical indicators point to potential further gains. The Moving Average Convergence Divergence indicator is approaching a bullish crossover, with the histogram compressing as red bars shrink steadily.

Also Read: Bitcoin Surges Past $95K After U.S. CPI Data Fuels Rate Cut Hopes

Why It Matters: Recovery Path Remains Uncertain

ZEC has climbed roughly 13% over the past three days and trades around $421. The Parabolic SAR indicator has flipped below the candlesticks, suggesting an uptrend may be forming.

If buying pressure continues, ZEC could challenge resistance at $443.

Breaking that level would open a path toward the psychologically significant $500 mark.

Failure to clear $443 would leave the token range-bound between that resistance and the $403 support level. A breakdown below $403 could push prices toward $363 and invalidate the current bullish structure.

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Bitcoin surged past $95,000 on Jan. 13 after U.S. inflation data showed the Consumer Price Index holding at 2.7% annually, reinforcing expectations that the Federal Reserve could pivot toward interest rate cuts later in 2026 while President Donald Trump publicly urged Jerome Powell to lower rates "meaningfully."

What Happened: CPI Data Sparks Rally

The Bureau of Labor Statistics reported that CPI rose 0.3% in December, with annual inflation holding steady at 2.7%. Core CPI, which excludes food and energy, increased 0.2% for the month and 2.6% year-over-year.

Bitcoin climbed to $95,222 at press time.

The broader crypto market capitalization rose to approximately $3.12 trillion, adding roughly $27 billion in value.

Trump responded on Truth Social shortly after the release, writing: "Great (LOW!) Inflation numbers for the USA. That means that Jerome 'Too Late' Powell should cut interest rates, MEANINGFULLY!!!"

Also Read: CFTC Takes Control As Senate Committee Fast-Tracks Landmark Bitcoin Regulation Framework

Why It Matters: Policy Expectations Shift

The data suggests price pressures have stabilized near the Fed's long-term target, creating conditions that could allow policymakers to ease monetary policy if economic growth slows.

Shelter costs remained the largest contributor to monthly inflation, rising 0.4% in December and 3.2% year-over-year.

Services inflation continued to outpace goods, reflecting persistent wage and rent pressures.

As institutional participation has expanded through ETFs and derivatives, Bitcoin has grown increasingly sensitive to U.S. inflation readings; stable inflation near the Fed's target typically allows bond yields to ease and risk assets to attract capital.

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