This Week at a Glance
- U.S. banks embrace Bitcoin in major adoption shift
- Illicit crypto activity hits $158B, driven by AI scams
- USDC liquidity tightens as stablecoins face regulatory pressure
- Coinbase expands with regulated prediction markets across all U.S. states
- Ethereum trades at a discount amid weak U.S. institutional demand
This week, the crypto market saw major developments. 60% of top U.S. banks now offer Bitcoin services. USDC faces redemptions under looming GENIUS Act regulations, and crypto funds saw $1.73B in outflows. Ethereum is trading at a discount amid weak U.S. institutional demand, and Coinbase is expanding regulated prediction markets nationwide. Security risks remain high, with AI-driven scams driving $158B in illicit activity. Regulators are busy too: the SEC clarified tokenized securities rules, South Korea increased licensing scrutiny, and the White House is pushing the CLARITY Act forward.
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Lead Story of the Week:
60% of Top U.S. Banks Embrace Bitcoin Services in Major Shift Toward Crypto
More than half of the largest U.S. banks now offer or plan to launch Bitcoin-related services, signalling a major shift in Wall Street’s attitude toward digital assets, according to River. The report shows that 60% of the top 25 banks are involved in crypto through trading, custody, or lending. This trend reflects growing support among banking leaders, reinforced by pro-crypto sentiment at the World Economic Forum in Davos. While major institutions like JPMorgan, Wells Fargo, and Citigroup are moving forward, some banks remain cautious, particularly around stablecoins and systemic risk concerns. Read the full story.
Other News Making Waves
Markets & Trading
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USDC Shrinks as Stablecoin Liquidity Tightens (More)
Stablecoin supply is contracting as USDC’s market cap fell from nearly $78 billion to $71.5 billion, driven by $6.5 billion in recent redemptions. While Tether’s USDT continues expanding, regulatory pressure from the expected GENIUS Act is reducing incentives to hold regulated stablecoins. Investors are shifting toward yield-bearing alternatives and traditional safe havens, prompting Circle to refocus on real-world payments and transaction-based adoption.
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Arthur Hayes Cuts Bitcoin Risk Amid Strong Yen and Fed Uncertainty (More)
Bitcoin weakened as the Japanese yen strengthened, leading Arthur Hayes to reduce exposure and exit leveraged crypto-linked positions. He argues that tightening global liquidity, rather than market fundamentals, is driving the pullback. Hayes is watching the Federal Reserve’s balance sheet for signs of intervention, which he believes would inject fresh liquidity and reignite bullish momentum for Bitcoin and selected DeFi assets.
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Crypto Funds See $1.73B Weekly Outflows as Sentiment Weakens (More)
Digital asset investment products recorded $1.73 billion in weekly outflows, the biggest since November 2025. This shows that investors are becoming more cautious. Most withdrawals happened in the U.S., while Europe and Canada had small inflows. Bitcoin and Ethereum had the largest declines, but Solana attracted new investments, suggesting that investors are being selective rather than leaving the market entirely.
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Ethereum Trades at U.S. Discount as Institutional Demand Slumps (More)
Ethereum’s Coinbase Premium fell to −0.08, its lowest level since 2023, signalling weak U.S. institutional participation. The negative premium shows ETH trading at a discount on Coinbase compared to Binance, reflecting reduced “smart money” activity. Analysts warn that without strong institutional inflows, Ethereum’s near-term upside may remain limited despite continued global and retail support.
Institutional Adoption & Traditional Finance Integration
- Coinbase launched regulated prediction markets across all 50 U.S. states with Kalshi. (More)
- Coinbase is considering an equity stake in South Korean exchange Coinone. (More)
Security, Crime & Compliance
- Illicit crypto activity hit $158 billion in 2025, fueled by AI-driven scams and sanctions evasion. (More)
- A U.S. court jailed Jingliang Su for 46 months over a $36.9 million crypto laundering scam. (More)
- Australia’s court fined BPS Financial $9.3 million for operating the unlicensed Qoin Wallet. (More)
- A SwapNet exploit drained $16.8 million from Matcha Meta users who disabled security approvals. (More)
Regulation & Policy Watch
- The SEC ruled that tokenized securities must follow federal laws and clarified issuer and synthetic models. (More)
- South Korea expanded crypto licensing checks to include major shareholders and stricter oversight. (More)
- The White House planned a February 2 meeting to break the CLARITY Act deadlock. (More)
- South Korea proposed capping major shareholders’ stakes in crypto exchanges at 15–20%. (More)
- An SEC public comment argued that crypto speculation alone should not trigger securities laws. (More)
Market Movers: Winners and Losers
Top 5 Gainers 📈
- Nietzschean Penguin +183.20%, from $0.02971458 to $0.084151
- BULLA +219.22%, from $0.02799538 to $0.089368
- BankrCoin +53.13%, from $0.00024202 to $0.00037060
- The White Whale +132.37%, from $0.03860507 to $0.089706
- Bitlayer +102.98%, from $0.067809 to $0.137641
Top 5 Losers 📉
- Yei Finance -56.38%, from $0.506391 to $0.220870
- Seeker -44.61%, from $0.03111366 to $0.01723432
- Merlin Chain -41.62%, from $0.115197 to $0.067255
- Cysic -44.95%, from $0.357476 to $0.196790
- FIGHT -21.75%, from $0.02064898 to $0.01615785
Data source: CoinGecko
Project Spotlight
Tether Launches USAT, a GENIUS Act-Compliant Stablecoin for U.S. Institutions
Tether has launched USAT, a new stablecoin for the U.S. that follows the federal GENIUS Act rules. USAT is issued by Anchorage Digital Bank, the first federally chartered crypto bank, and is fully backed 1:1 by short-term U.S. Treasuries. Unlike USDT, which is used worldwide, USAT is meant for American institutions and businesses, providing a transparent digital dollar for payments and trading in the U.S. The token uses Tether’s Hadron platform and is designed for large transactions with built-in compliance and oversight.
Why It Matters:
USAT signals Tether’s shift toward regulated markets, helping bridge crypto and traditional finance while strengthening trust in stablecoins for U.S. institutional adoption.
Disclaimer: This roundup is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.
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