Bitcoin (BTC.CC) rose by 1.78%, trading at $71,115.58. Ethereum (ETH.CC) rose 1.64%, trading at $2,170.09. Bitcoin spot ETFs saw net inflows of approximately $2.5 billion this month, with IBIT ranking among the top 2% of ETFs. According to Bloomberg analyst Eric Balchunas, Bitcoin spot ETFs have seen cumulative net inflows of approximately $2.5 billion this month, nearly offsetting the year-to-date outflows.
BlackRock’s Robbie Mitchnick, head of digital assets, stated that institutional investors are increasingly concentrating on Bitcoin and Ethereum, believing that most other tokens have short life cycles and lack long-term value. He added that artificial intelligence represents a more significant long-term driver than the expansion of new tokens, as crypto, being a “computer-native currency,” shares a natural symbiotic relationship with AI’s computer-native data and intelligence. Mitchnick also noted that clients have shifted from broadly allocating small assets to focusing on a few key targets, with Bitcoin and Ethereum dominating allocations while showing limited interest in other tokens. He further noted that Bitcoin miners are transitioning to AI-related computing businesses, seeking more stable revenue streams, while Bitcoin remains an option for diversification amid AI-driven transformations.
The U.S. CFTC established an Innovation Task Force to regulate cryptocurrencies and prediction markets. The task force will coordinate with the SEC and other agencies to advance innovation agendas. The Financial Stability Board warned that dollar stablecoins exacerbate financial risks for emerging economies. The Financial Stability Board noted that cross-border circulating dollar-denominated stablecoins pose “sharper” financial stability and macroeconomic risks to emerging markets and developing economies.
Lombard partnered with Bitwise to activate $500 billion in institutionally custodied Bitcoin for yield generation and collateralized lending. Bitwise will develop yield strategies combining DeFi lending with tokenized real-world assets, while Morpho will provide infrastructure for BTC-collateralized loans. The platform uses native Bitcoin tools such as partially signed transactions and timelocks to verify collateral, allowing positions to be represented on-chain without transferring or re-pledging underlying assets. Phillips stated that Bitcoin Smart Accounts can simultaneously reduce custodial, cross-chain bridge, and counterparty risks.
The solution is set to launch in the second quarter of 2026 and will expand coverage by adding more custodians and protocols. Lombard estimates that approximately $500 billion worth of BTC is held in institutional custody; DefiLlama data shows that total value locked (TVL) for BTC in DeFi is around $2.93 billion, with a market capitalization of approximately $1.4 trillion; as of press time, Babylon Protocol’s TVL is approximately $2.8 billion, while Lombard’s is about $744 million. BNY Mellon CEO Robin Vince stated that the next phase of crypto adoption will depend on large financial institutions, as banks can bridge traditional finance with the digital asset ecosystem.
Vince noted that tokenization is a key focus, including creating new digital share classes for money market funds and issuing existing products in tokenized form. He added that sectors such as lending and real estate may benefit first from tokenization. Vince stressed that trust and regulation will influence the pace of industry development and highlighted the need for clear regulatory frameworks and well-defined rules.
The U.S. GENIUS Act has been passed, while the revised Digital Asset Market Clarity Act is still progressing. The draft remains controversial regarding the treatment of stablecoin yields, with the latest compromise allowing rewards tied to user activity but prohibiting interest payments on stablecoin balances. Morgan Stanley’s Amy Oldenburg noted that banks’ expansion into crypto is not driven by hype but follows years of infrastructure development.
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