Venezuela's renewed aluminum exports to the US could reshape global commodity flows, contingent on stable power and regulatory conditions.

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Coinbase's limit-only mode for BLUECHIP-USD may impact liquidity and price discovery, affecting traders' strategies and market dynamics.

The post Coinbase switches BLUECHIP-USD trading pair to limit-only mode appeared first on Crypto Briefing.

Goldman Sachs' AWM growth surpassing targets signals a robust strategic pivot, enhancing its competitive edge and long-term profitability.

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Binance's proactive upgrade notice minimizes user disruption, ensuring operational continuity and maintaining trust in its platform stability.

The post Binance schedules system upgrade for September 22, 2026 appeared first on Crypto Briefing.

Rising Treasury yields and persistent inflation could strain portfolios, challenge Fed policies, and heighten economic instability.

The post JPMorgan’s Bob Michele warns bond market faces maximum pain appeared first on Crypto Briefing.

Bitcoin Magazine

CFTC Chairman Says Agency Will Write Crypto Rules After Clarity Act Vote Fails

Commodity Futures Trading Commission Chair Mike Selig has said that the top regulator will go ahead and use its powers to advance crypto legislation despite the Clarity Act being blocked. 

In a Wednesday statement released on X, Selig said that the regulator would still help U.S. President Trump “get the job done.” 

Lawmakers blocked the Clarity Act on Tuesday in a procedural vote, with the long-awaited legislation missing the 60 votes needed to advance it. The bill aims to formally divide oversight between regulators, distinguishing which digital assets are securities, commodities or stablecoins. 

“Americans deserve regulatory clarity, legal certainty, and consumer protections in crypto asset markets,” Selig wrote. 

“President Trump promised to deliver a future-proof crypto asset regulatory market structure one way or the other, and we will help him get the job done using our existing statutory authorities.

“The U.S. is and will remain the crypto capital of the world. The CFTC is locked in and ready to ship its rules for the new frontier of finance.”

President Donald Trump last month urged lawmakers to pass the Clarity Act, calling the legislation “very powerful” — but Republicans said that Democrats were deliberately holding it back.  

Regulators are now more crypto-friendly since President Trump appointed them and took the White House and are widely expected to continue pushing rules that help the crypto space. 

The Securities and Exchange Commission last month proposed its own framework for crypto asset offerings, pressing ahead despite a vote on the Clarity Act stalling. 

Despite being passed by the House of Representatives last year, the Clarity Act was in a deadlock for most of this year after the banking lobby clashed with lawmakers and crypto businesses over whether platforms like Coinbase should be able to pay customers yield. 

Some lawmakers have sought to change wording in the bill regarding ethics, and a new bill started circulating in July. The draft bans government officials from promoting and making money from crypto. 

But other Democratic lawmakers said it still fell short; a number of pro-crypto Republicans accused Democrats of deliberately playing politics and delaying the bill. 

This post CFTC Chairman Says Agency Will Write Crypto Rules After Clarity Act Vote Fails first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

Bitcoin Magazine

Bitcoin Is on Sale and Should Be Accumulated, Says Morgan Creek Capital CEO

Morgan Creek Capital CEO Mark Yusko has said that bitcoin’s fair value is $105,000 based on Metcalfe’s Law. 

Speaking on Bitcoin Magazine TV on Wednesday, the investment management firm said that now was the best time to buy the leading cryptocurrency as it is “on sale.” 

Metcalfe’s Law, an observation by Internet entrepreneur Robert Metcalfe, states that the value of a network is proportional to the square of the number of users. Bitcoin touched a high in October 2025 of $126,080 but was recently trading 40% lower than that, at $75,701. 

“So the fair value of bitcoin today, based on Metcalf’s law — Tim Peterson runs a model that tracks this really nicely — it’s about $105,000, but it’s $75,000,” Yusko said.  

“Okay, so it’s on sale — you should accumulate things that are on sale.”

Yusko went on to say that bitcoin was the best way to protect one’s value and that investing in companies wasn’t good for the long-term. 

“The problem is over a 30-year period, equity, 85% of companies disappear over 30 years. It’s amazing stat,” he said. 

“What you really need is something to protect your value — and historically, for 5,000 years, there was one asset: gold.”

“Now we’ve got gold and bitcoin,” he added. 

Bitcoin started rallying in August following news that the U.S. Treasury would at least double the size of its liquidity-support buyback operations. The announcement hurt the dollar but non-yielding assets have benefited.  

Since then, some experts have said that the so-called debasement trade — when investors buy an asset as a way to hedge against a currency losing value — is back and will benefit bitcoin. 

The trade was hot last year, and helped bitcoin’s run, but the digital asset lost steam after October as traders turned their attention to stocks related to artificial intelligence. 

This post Bitcoin Is on Sale and Should Be Accumulated, Says Morgan Creek Capital CEO first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

Bitcoin Magazine

The Quantum Issue: To Freeze Coins Or Not

Bitcoin’s quantum debate is quite a quagmire. This is not merely a technical debate regarding the trade-offs of different types of cryptography and their strengths against a theoretical quantum computer. It is a debate about which properties of Bitcoin’s ethos are strongest when it is faced with a difficult dilemma: uphold the promise that valid coins remain spendable by their owners, or favor supporting the security of the system by not allowing a significant portion of its monetary supply to be raided via a vulnerability that was well known for many years.

The conundrum at the crux of this controversy is that every serious option violates a principle that Bitcoin users care about. Doing nothing may preserve today’s consensus rules while allowing future quantum-capable actors to take coins whose owners never consented. Freezing vulnerable coins may prevent that theft, but it retroactively invalidates long-standing spending conditions. A forced migration to quantum-resistant signatures may be prudent engineering, but it can also look like a deadline-backed confiscation regime. The debate is ugly because there is no clean path that perfectly preserves property rights, economic predictability, censorship resistance, backward compatibility, and user sovereignty all at once.

This is why I consider the problem to be fascinating. It’s multifaceted: simultaneously technical, sociological, philosophical, and economic in nature. Thus any serious discussion of the problem must consider every angle.

Throughout this essay I’ll be making the case that the quantum migration debate is far more nuanced than just a question between freezing or not freezing vulnerable bitcoin. Rather, it’s a question of how to minimize total property-rights violations once elliptic curve signatures no longer reliably authenticate rightful ownership.

The Quantum Threat

Bitcoin’s current authorization scheme to ensure that funds are only spent by their rightful owners depends on elliptic-curve cryptography. Legacy ECDSA signatures and Schnorr signatures both use the secp256k1 elliptic curve. Under ordinary classical computing assumptions, deriving a private key from a public key is computationally infeasible. A cryptographically relevant quantum computer running Shor’s algorithm changes that assumption: once a public key is available, a sufficiently capable quantum attacker could derive the corresponding private key and sign a transaction to spend the funds that would be accepted as valid by the network. Quantum computers threaten to break the public-key-to-private-key hardness assumption behind ECDSA and Schnorr.

That distinction matters because not all Bitcoin outputs expose the same information at the same time. Some output types reveal a public key immediately and remain vulnerable indefinitely. Others hide the public key behind a hash until the owner spends. This creates two broad attack classes. A long-range attack targets outputs whose public keys are already visible on-chain, such as old pay-to-public-key outputs and Taproot outputs. A short-range attack targets coins at the moment of spending: the owner broadcasts a transaction, the public key becomes visible, and a fast quantum attacker attempts to derive the private key quickly enough to replace or front-run the transaction.

The mining threat is different. Grover’s algorithm can in theory speed up brute-force searching for a valid block hash, but it only provides a quadratic speedup while Shor’s algorithm provides a superpolynomial speedup. Thus the competitive advantage is far less practical to bother using a quantum computer for mining.

The Quantum Quantum Threat

Amusingly, the threat of quantum computers is itself in a quantum state of superposition. A quantum computer worth worrying about may or may not be built and no one can prove or disprove that it will happen. Quantum skeptics don’t dispute that Shor’s algorithm could break ECC. They claim there is no good reason to believe we will ever build the kind of powerful, fault-tolerant quantum computer needed to run Shor’s algorithm at a cryptographically relevant scale.

Everyone agrees that breaking ECC isn’t possible with today’s noisy quantum processors. It requires many reliable logical qubits, extremely low error rates, lengthy computations with high coherence, and quantum error correction running successfully at scale.

A strong skeptical argument is that the quantum fault-tolerance threshold theorem depends on assumptions that may not be physically satisfiable with the required precision. Such assumptions include sufficiently independent noise, sufficiently accurate gates, limited unwanted interactions, and the ability to keep errors below an acceptable threshold across a huge system. Mikhail Dyakonov argues that the theorem assumes idealized conditions and does not tell us the real engineering precision needed to satisfy every assumption in an actual device.

Gil Kalai’s criticism is more structural. His argument is that realistic quantum systems may suffer from correlated noise and noise accumulation that prevent the formation of high-quality quantum error-correcting codes. In his 2011 paper, he proposes that physical realizations of quantum codes, correlations in stochastic systems, and accumulated noise could lead to failure of scalable quantum computers.

This may be the strongest skeptic argument: quantum error correction works only if the noise is tameable. If real high-qubit systems generate adversarially correlated errors, then adding more qubits may very well make the computer more fragile and unreliable.

Quantum scalability is a major unknown. Skeptics argue that progress from 50, 100, or 1,000 physical qubits does not automatically extrapolate to millions of physical qubits or thousands of logical qubits. Quantum systems are analog, delicate, and coupled to their environment. The engineering challenge is not just “make more qubits”; it is “make more qubits while suppressing crosstalk, leakage, correlated errors, calibration drift, thermal effects, measurement errors, fabrication variation, and control noise.” This is why critics reject simple timeline extrapolations. They view “we increased qubit count by X this decade, so we will break ECC by year Y” as weak reasoning.

Finally, quantum computer demonstrations have shown that current devices can only outperform classical simulations on carefully selected sampling tasks. Critics have a good point that this says little about executing long, structured algorithms like Shor’s algorithm with enough reliability to recover a 256-bit ECC private key.

Why Post-Quantum Migration Matters

Assuming that a cryptographically relevant quantum computer appears, merely adding the option for Bitcoiners to use post-quantum cryptography won’t be sufficient to stop a quantum attack. The total set of quantum-vulnerable bitcoin includes early pay-to-public-key coins, coins controlled by reused public keys, Taproot outputs, and cases where public keys or extended public keys have been revealed outside the chain. One striking figure is the concentration of BTC in old P2PK outputs, which are a tiny fraction of UTXOs by count but represent a much larger share of value, about 1.7 million BTC. Broader estimates via on-chain analysis of output types, activity patterns, and known ownership lead us to believe that at least 2.6 million BTC would remain vulnerable even if all active Bitcoin users migrated their wallets to post-quantum cryptography.

As such, even with opt-in post-quantum (PQ) cryptography, we should expect there to be a systemic risk sized pool of vulnerable coins lingering indefinitely. These coins could be employed by a quantum attacker to harm the system in a wide variety of ways – not just via selling them and dropping the spot price of BTC. Thus, protecting those vulnerable coins from a quantum threat requires some sort of rule changes that would effectively “lock out” a quantum attacker.

The rhetoric around this issue often uses terms like “confiscation,” “burning,” “freezing,” “stealing,” or “recovery,” but these describe different mechanisms. A freeze would not transfer coins to the state, miners, developers, or some recovery fund. In its most basic form, it would mean changing consensus rules so that certain outputs can no longer be spent using vulnerable ECDSA or Schnorr signatures. That is why advocates sometimes say “burn” rather than “confiscate”: the coins are not reassigned; they become unspendable via their private key. But for a rightful owner who still has the original key, the practical effect can still feel confiscatory: a spend that used to be valid is no longer valid.

BIP-361 divides the migration concept into phases. First, once a quantum-resistant address type exists, the Bitcoin network would stop allowing new coins to be sent to quantum-vulnerable addresses. Later, after a multi-year window, legacy ECDSA and Schnorr spends would become invalid. Finally, there remains the question of recovery options for users who can prove, without solely relying upon broken ECC, that they are the legitimate owner – such as through a zero-knowledge proof derived from a seed phrase or HD wallet structure. The proposal’s primary purpose is not to pick a post-quantum signature algorithm; rather the goal is to create incentives and deadlines so that users, exchanges, custodians, wallets, and institutions actually migrate in a timely fashion and thus allow us to deprecate ECC in order to prevent a quantum attack.

The Case for Freezing

The strongest pro-freeze argument starts from a simple claim: a quantum attacker who derives a private key from a public key is not the legitimate owner in any morally meaningful sense. Under this view, “just let vulnerable coins be taken” is not neutrality; it is allowing a new class of actors to loot old outputs because the protocol failed to strengthen a lock that is known to be weak. Freeze advocates argue that the resulting harm from allowing quantum theft is not just to negligent owners but to all holders, because a successful quantum sweep would redistribute wealth to whoever possesses early quantum capability. This is problematic because that amount of bitcoin in a single actor’s hands who spent relatively little resources to obtain them can be quite dangerous for the ecosystem’s security. Bitcoin’s security model assumes economically rational participants that are incentivized to protect the value of their coins, but a quantum-capable actor has the potential to break that assumption. The pro-freeze position is that Bitcoin should not reward the first entities to break ECC with ammunition that could be leveraged to harm the system.

This argument is especially true for coins believed to be lost. If lost coins are suddenly recoverable by quantum attackers, the circulating supply effectively increases. That does not violate the formal 21 million cap, but it does change the economic landscape: coins that the market may have treated as inert can re-enter circulation, possibly rapidly and in concentrated hands.

The pro-freeze side also argues that the threat is not limited to ordinary profit-seeking. A quantum-capable adversary could attack Bitcoin politically, destabilize markets, undermine public confidence, grief the network for many years, or even acquire enough hashrate to 51% attack the network. Analysis of the game theory in play shows that we can’t simply assume an attacker sweeps vulnerable BTC to sell it and ride off into the sunset; there is a far wider range of strategies and undesirable outcomes.

A related argument is about market panic. Pieter Wuille’s comments in the mailing-list debate sharpen this point: the medium-term danger may be not only an actual cryptographically relevant quantum computer, but the credible belief that one may exist soon. If markets come to believe that a large share of Bitcoin’s supply can be seized at any moment, merely offering voluntary post-quantum outputs may not be enough to restore confidence. A credible plan to disable vulnerable spends could itself be a sufficient reassurance mechanism.

The pro-freeze camp also sees deadlines as necessary because voluntary migration is likely to be slow. People procrastinate; institutions move slowly; hardware wallets, exchanges, custodians, estate plans, multisig coordinators, and cold-storage procedures all need time to implement changes and plan for migrations. Matt Corallo has argued that Bitcoin should add a simple post-quantum capability well in advance of it being necessary, because wallets need to start embedding or committing to quantum-resistant public keys long before any later emergency decision about freezing vulnerable UTXOs becomes credible.

There is also a fiduciary responsibility argument. Public companies, ETFs, custodians, and exchanges will be unable to ignore a known migration deadline. A locked-in consensus change gives compliance departments and risk committees something concrete to act on. It also turns an abstract future threat into a project plan: upgrade software, generate new addresses, move funds, verify backups, communicate with customers, and complete migrations before a known date. BIP-361 explicitly argues that exchanges and custodians would face fiduciary and legal pressure to act once a deadline exists.

It’s also worth noting that all of this migration planning is applicable to more situations than just the emergence of a cryptographically relevant quantum computer. Most of the arguments in this debate apply to ANY situation where ECC is known to have been weakened. Generally speaking, cryptography tends not to withstand the test of time and any given cryptographic algorithm tends to be weakened over long time frames (decades) as researchers find flaws and develop new techniques that break prior assumptions.

Finally, freezing advocates argue that Bitcoin has always depended on users enforcing rules that protect the system as a whole. A soft fork that objectively disables a known-insecure spend path is not the same as arbitrary political confiscation, in their view. The proposed line is not “these people are disfavored” but “these script types require cryptography that no longer meets the bar for Bitcoin’s security assumptions.” If the rule is mechanical, objective, announced years in advance, and paired with a viable migration path, proponents argue that it is more akin to replacing a broken lock than blacklisting an owner.

Anti-freeze Arguments

The strongest anti-freeze argument starts with the opposite premise: Bitcoin’s social contract is that a valid coin remains spendable by the holder of the corresponding key under the consensus rules accepted when the coin was received. Retroactively invalidating that spend path crosses an inviolable line. It turns “not your keys, not your coins” into “not your upgraded-by-deadline, not your coins.” Even if no one else receives the frozen coins, the original owner loses practical control. That is why critics describe forced freezing as confiscatory, not merely protective.

This objection is not just sentimental. Bitcoin’s credibility depends heavily on the expectation that developers and node operators will not pick winners and losers among UTXO owners. A freeze aimed at “vulnerable coins” may be technically objective, but it still targets a subset of owners based on past address choices, wallet design, dormancy, or inability to act. Critics worry that once the network accepts retroactive invalidation for one reason, future coalitions may find other reasons: sanctions, theft recovery, inheritance disputes, state pressure, “obviously” lost coins, or other emergencies.

A second objection is that freezing cannot distinguish between lost coins, careless owners, dormant owners, imprisoned owners, dead owners with heirs, users in hostile jurisdictions, timelocked arrangements, forgotten cold storage, and deliberately long-term savers. Bitcoin has many users whose goal is to avoid being forced to stay online and responsive to policy changes. A person who stored coins safely for decades should not necessarily lose them because the rest of the network later declared their storage method obsolete. It’s worth noting that there is an incentive conflict between active current holders who benefit from reducing the effective supply and inactive rightful owners who may be unable to take action to defend themselves.

A third objection is uncertainty. A cryptographically relevant quantum computer may arrive later than expected, may not arrive in the form feared, may remain secret for some time, or may be countered by less drastic tools. If Bitcoin permanently burns millions of coins and the threat does not materialize on the assumed timeline, the network will have committed an irreversible self-inflicted property-rights violation. Critics therefore argue that premature freezing is worse than measured preparation.

A fourth objection is governance and legitimacy. Freezing vulnerable coins would be one of the most controversial consensus changes in Bitcoin’s history. Some have warned that announcing a freeze of old UTXOs could damage Bitcoin’s image more than a quantum attack itself and could produce a major fork in which one side accepts the freeze and another preserves old spendability. In that scenario, the “solution” creates a new political attack surface: exchanges, custodians, miners, and users must choose which chain’s property-rights model they prefer.

A fifth objection is legal risk. Some participants in the mailing-list debate warned that developers, companies, or miners involved in consciously changing code to freeze funds could face liability claims from owners whose coins become unspendable. Even if those claims ultimately fail, the legal process itself could chill development, divide institutions, and make consensus coordination harder.

A sixth objection is technical humility. Post-quantum cryptography is real, but not free. NIST has standardized ML-DSA, SLH-DSA, and ML-KEM, with more work continuing, yet Bitcoin has unusual constraints: every byte matters, verification cost matters, wallet compatibility matters, and consensus failures are catastrophic. Chaincode’s comparison of candidate schemes in their quantum deep dive report shows why the choice is not trivial: post-quantum signatures and keys can be much larger than Schnorr or ECDSA, and schemes differ sharply in maturity, signature size, public-key size, signing cost, verification cost, and assumptions.

That makes critics wary of forcing migration before the destination is mature. A bad post-quantum migration could reduce throughput, raise fees, bloat the UTXO or witness data burden, introduce new cryptographic assumptions, or force another migration later if the chosen algorithm weakens. Conventional Schnorr signatures are tiny compared with many hash-based post-quantum signatures, while lattice based cryptography has other trade-offs and maturity questions. On a related note, given the larger data sizes of signatures, this will increase the cost of transacting on chain and could price out less wealthy users.

Doing Nothing vs Doing Something

As I stated over a year ago in my first essay on this topic: if quantum computing becomes a threat to Bitcoin’s elliptic curve cryptography (ECC), an inviolable property of Bitcoin will be violated one way or another.

You’re probably familiar with the fundamental principle coined by Andreas Antonopoulos:

“Not your keys, not your coins.”

I posit that the corollary to this principle is:

“Your keys, only your coins.”

The point is that keys don’t merely authorize spending, but that signatures are supposed to be unforgeable evidence of control by the legitimate keyholder. A quantum-capable entity breaks the corollary of this foundational principle. We secure our bitcoin with the mathematical probabilities related to extremely large random numbers. Your funds are only secure because truly random large numbers are safe from being discovered by anyone else in the world.

The do-nothing position is often caricatured as “let quantum thieves steal everything.” Taking a noninterventionist stance against quantum theft is certainly principled: Bitcoin is a voluntary bearer asset governed by rules, and users are responsible for managing known risks. If a coin is encumbered by a script that becomes weak over decades, perhaps that is no different from losing a seed phrase, using weak entropy, trusting an insecure custodian, or failing to follow any number of other best practices. Under this view, the network’s job is not to guarantee the security of every historical locking script forever; rather it’s to enforce the rules as written.

This camp can also state that total supply is the only guarantee of the network, not effective circulating supply. The 21 million cap does not say “21 million minus coins assumed lost.” It says no more than 21 million coins will be issued. If a lost-looking coin later moves because its key is found, inherited, cracked through poor entropy, or recovered through quantum attack, the total issued supply has not changed. That argument is unsatisfying to people who see quantum funds sweeping as theft, but it is internally consistent: protocol rules define validity, not subjective moral beliefs about rightful ownership.

The do-nothing side also values operational simplicity. Any freezing rule requires defining what constitutes a vulnerable bitcoin redeem script, choosing activation dates, coordinating wallets and miners, communicating to users, handling edge cases, and absorbing political fallout. Doing nothing avoids a contentious consensus change. If post-quantum tools become available, users who care can migrate voluntarily, while users who do not migrate bear their own risk.

But the weakness of the “pure do-nothing” perspective is that it treats quantum theft as an individual-risk problem when it may actually become a system-risk problem. If enough coins are exposed, and if the market believes a capable attacker can use them to harm the ecosystem, the damage is not confined to owners who failed to migrate. It affects public confidence in the system which then cascades into negative pressure on the exchange rate, thermodynamic security (miner revenue,) and the revenue of many Bitcoin businesses. That is why even many people uncomfortable with freezing still support early preparation.

Apathetic “code is law” Bitcoiners are free to do nothing, but they should not delude themselves into thinking that they can stop others from trying to do something.

Alternative Proposals

Because “freeze all vulnerable UTXOs” and “do nothing” are both brutal in their own ways, much of the interesting work is in alternative proposals that would help users retain their property rights in the face of a quantum threat.

1. We could prevent new vulnerable outputs while not yet freezing old ones. This is the least coercive part of forced migration. Once a safer output type exists, consensus or policy rules could discourage or even disallow sending bitcoin into vulnerable locking scripts. That reduces future damage without immediately invalidating old property claims. BIP-361 includes this as Phase A, and several critics are more open to this kind of forward-looking restriction than to permanent retroactive burns.
2. Alternatively, the network could enforce a temporary lock rather than permanent burn. Boris Nagaev suggested that if old EC spends must be disabled, the lock could include a future re-enable height or some other mechanism that gives the community time to build recovery paths. Conduition explored how such a phase might interact with P2QRH/P2MR-like outputs and warned that simply banning all EC checks could accidentally affect hybrid constructions unless the rule is designed carefully. The appeal of a temporary lock is political as much as technical: it signals emergency containment rather than permanent confiscation.
3. Another option is rate-limiting, represented by the Hourglass proposal. Hourglass V2 focuses on old P2PK coins and would restrict spending so that only one P2PK input could be spent per block, with a net limit of one BTC per block from those outputs. Its authors present it as a way to avoid both immediate burning and unconstrained quantum liquidation: coins are not destroyed, but their ability to flood the market is throttled. The proposal estimates that unconstrained P2PK sweeping could be extremely fast, while the one-BTC-per-block design would stretch full P2PK movement over decades.
   
   Hourglass has its own critics. Opponents argue that it still violates permissionless spending by imposing special restrictions on a class of otherwise valid coins. It may also create a long-running race between legitimate owners and quantum attackers rather than resolving ownership. Some critics say that if the quantum threat is real, taking decades to clear exposed P2PK outputs gives attackers plenty of time; if the threat is not real, the rule is needless interference.
4. There is the concept of commit-delay-reveal, sometimes discussed through Guy Fawkes-style constructions. The basic idea is that a user first commits to a future spend in a way that a quantum attacker cannot exploit immediately, waits for the commitment to become deeply confirmed, and later reveals the secret needed to validate the spend. This can prevent a short-exposure quantum attacker from seeing a public key and instantly stealing the coin before confirmation. Chaincode describes commit-delay-reveal as opt-in and potentially useful, while the Optech summary notes that these schemes can let safely spendable bitcoins avoid destruction and reduce migration urgency.
5. Quantum safe funds recovery without EC signatures, especially for HD wallets, should be feasible. Or Sattath and others discussed “signature lifting” ideas where the owner proves knowledge of a seed or derivation path rather than proving control through the vulnerable public key. Olaoluwa Osuntokun built a proof-of-concept using zk-STARKs to prove that a Taproot BIP-86 output key was generated from a BIP-32 seed path. This would certainly be a last resort scenario for procrastinators to recover funds, given that the latest optimized version of the scheme requires a 200 KB proof. It would certainly price out recovery of small UTXOs, because a best case scenario would likely cost several hundred dollars in transaction fees but could easily run into the thousands or tens of thousands at higher transaction fee rates.
   
   This recovery path is attractive because it changes the moral shape of the debate. If rightful owners can later recover frozen coins through non-EC proofs, freezing no longer has to mean permanent destruction. But the costs are serious: large proofs, complex verification, privacy leakage, wallet-derivation assumptions, inability to cover every historical wallet type, and the danger of adding novel cryptography to Bitcoin consensus. Critics of the zk-STARK approach emphasized that megabyte-scale proofs and multi-second verification times are difficult to reconcile with Bitcoin’s conservative design.Though further research is already finding optimizations that are more efficient.
6. Dual-signature or market-driven migration. Marc Johnson and others suggested enabling quantum-resistant outputs, allowing optional dual signatures, giving fee or policy incentives, and letting users choose their own risk instead of imposing a hard loss deadline. This approach preserves property rights better than forced freezing, but it won’t solve the systemic-risk problem if too many high-value coins remain exposed.

Tricky Technical Trade-offs

The migration debate cannot be fully separated from the choice of quantum-resistant signatures because the size of signatures will affect the system throughput. NIST’s post-quantum standards provide a serious foundation: FIPS 204 standardizes ML-DSA, FIPS 205 standardizes SLH-DSA, and FIPS 203 covers ML-KEM for key establishment. But Bitcoin needs digital signatures and script-compatible ownership proofs, not just general-purpose cryptographic standards. A scheme suitable for TLS or government communications is not automatically ideal for a blockchain with limited block space and global verification requirements.

Hash-based signatures are conservative and appealing because their assumptions are simple, but they are large. Lamport-style signatures can be enabled in some form with script upgrades such as OP_CAT, but the Taproot key-path problem remains: if a Taproot output has a quantum-vulnerable key path, placing a Lamport signature in the script path does not make the whole output quantum safe unless the vulnerable key path is removed or disabled. BIP-347’s OP_CAT discussion explicitly notes this problem.

Lattice signatures such as ML-DSA offer more compact signatures than many hash-based options, but they bring different assumptions and implementation risks. Falcon-style signatures are compact but historically more delicate to implement. SPHINCS+/SLH-DSA is conservative but large. Experimental schemes may be attractive on paper but too immature for Bitcoin consensus. This is why a credible migration plan likely needs algorithm agility, test deployments, wallet experiments, careful fee modeling, and perhaps multiple acceptable post-quantum paths rather than a single rushed winner.

The block space problem is severe but not intractable. Chaincode estimates that migrating all UTXOs would take roughly 76 to 142 days if migration consumed all block space, and 305 to 568 days if it consumed 25% of block space. That is just raw migration throughput; it does not include human coordination, wallet upgrades, institutional approvals, support for air-gapped signing, hardware replacement, accounting workflows, etc.

A full timeline for UTXO set migration is measured in years, not weeks. Chaincode’s high-level estimate sketches a best case of roughly five years and a worst case closer to fifteen years for research, BIP work, implementation, deployment, and migration. The same report notes that in an emergency the timeframe could potentially be accelerated to 2 years, but historical emergency protocol fixes are not really analogous because the quantum migration problem touches every layer of the ecosystem.

The Ethics of Property Rights

The moral disagreement comes from two competing definitions of ownership.

The anti-freeze side supports a “code is law” perspective: ownership means control under the consensus rules. If an output is spendable by an ECDSA or Schnorr signature, then disabling that spend path violates the owner’s property rights. The network does not know whether a coin is lost, abandoned, inherited, intentionally dormant, or inaccessible for temporary reasons. Therefore, freezing is collective punishment imposed on a subset of users for failing to follow a new migration demand.

The pro-freeze side says ownership cannot mean “anyone who can break the cryptography gets the coin.” Bitcoin’s signatures are intended to authenticate the legitimate keyholder, not to create a prize for whoever first builds a machine that defeats the authentication scheme. If quantum capability turns public keys into private keys, then an EC signature no longer carries the same moral information it carried before. Under this view, refusing to freeze is not neutrality; it is a security failure to knowingly allow a compromised authentication mechanism to transfer wealth.

Both positions are coherent. The first protects rule stability and bearer-asset finality. The second protects the deeper intent of the locking script. The painful point is that Bitcoin’s consensus rules are the only practical arbiter. The protocol cannot read intent. It can only accept or reject transactions according to rules. Any attempt to encode “rightful ownership” after ECC breaks either becomes overly broad, relies on new proofs, or leaves some victims behind.

I submit that property rights have been violated on Bitcoin before. Allow me to introduce you to the Value Overflow Incident as it is commonly known.

On August 15 2010, it was discovered that block 74,638 contained a transaction that created 184,467,440,737.09551616 bitcoin for three different addresses. Two addresses received 92.2 billion bitcoins each, and whoever solved the block got an extra 0.01 BTC that did not exist prior to the transaction. This was possible because the code used for checking transactions before including them in a block didn’t account for the case of outputs so large that they overflowed when summed.

A new version of the client was published within five hours of the discovery that contained a soft-forking change to the consensus rules that rejected output value overflow transactions. The blockchain was forked. Although many unpatched nodes continued to build on the “bad” blockchain, the “good” blockchain overtook it at a block height of 74,691 at which point all nodes accepted the “good” blockchain as the authoritative source of Bitcoin transaction history.

The bad transaction no longer exists for people using the chain with the greatest cumulative proof of work. Therefore, the bitcoins created by it do not exist either.

Thus, from a pure property rights perspective, the person who followed the rules of the network at the time had their property confiscated from them because the overwhelming majority of other actors on the network considered their action to be undesirable and a threat to the network.

Anti-freeze folks will likely say that this is not a problem because the INTENT of protocol rules is what matters, and the intent was for the network to guarantee a maximum supply of 21 million BTC. I would tend to agree, and make the counter-claim that the INTENT of using ECC to secure BTC is to ensure that it’s infeasible for anyone to guess your private key.

Economic Stakes

A sudden sweep of funds by a quantum-capable entity could affect Bitcoin through several channels.

1. Coins thought dormant would re-enter circulation, increasing the effective bitcoin supply.
2. Markets could panic before any actual sweep if credible evidence appears that a CRQC exists or is near.
3. Miners could be affected if price falls sharply, because their budget is tied to block subsidies and fees in BTC terms converted into operating revenue.
4. Exchanges and other businesses could face operational stress and massive drops in revenue if customer deposits are exposed or if market structure breaks under uncertainty.

“Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone.” – Satoshi Nakamoto

If true, the corollary is:

“Quantum recovered coins only make everyone else’s coins worth less. Think of it as a theft from everyone.”

If a large amount of BTC is permanently lost, remaining holders benefit from a lower effective circulating supply. If quantum attackers revive those coins, remaining holders lose that benefit. Critics of freezing respond that this is exactly why active holders have a conflict of interest: they may prefer burning dormant coins because it makes their own coins scarcer. That is not a trivial objection. A freeze can be framed as protecting the network, but it can also be framed as enriching active holders at the expense of inactive ones.

That conflict is why the specific definition of vulnerable coins matters greatly. Freezing only ancient P2PK outputs with already exposed public keys is easier to justify than freezing every vulnerable output, because the funds are far more likely to be lost. Freezing Taproot outputs is more complicated politically because Taproot is recent and intentionally adopted by users who were following modern wallet guidance. Freezing reused outputs raises another problem: the vulnerability may come from user behavior rather than address type. Freezing based on on-chain public key leakage is also a half measure because the chain can not know what was leaked off-chain; many wallets share their xpubs with third parties, for example.

A broad freeze could therefore be both underinclusive and overinclusive. It could miss off-chain exposed keys while capturing dormant but legitimate owners. A narrow freeze could reduce the worst risk but leave enough vulnerable value to sustain panic. This is why I believe the optimal solution is complex and requires a multi-phased approach, rescue proofs, and objective script rules rather than discretionary address lists.

Herding Cats

Bitcoin is an anarchic system of rules without rulers. It has no authority that can dictate changes to consensus rules. A rule to deprecate ECC would need broad agreement among node operators, miners, exchanges, wallets, custodians, merchants, and users. In formal terms, many proposals are soft forks: they make previously valid spends invalid under stricter rules. But in social terms, a soft fork that disables old coins is much heavier than an ordinary tightening rule. It directly affects property expectations.

This governance problem gets worse under emergency conditions. If Bitcoin waits until there is credible proof of a CRQC, the community may have to act during panic, misinformation, market stress, and adversarial pressure. But if Bitcoin acts too early, it risks freezing coins before the threat is real enough to justify it. Chaincode explicitly warns that planning and communication should happen before the threat becomes acute, while also acknowledging that stakeholder coordination, regulation, taxation, and user communication are major obstacles.

This creates a paradox. The best time to design a quantum migration is before it is urgently needed. The hardest time to persuade people to accept controversial measures is also before they are urgently needed. Once the emergency is obvious, technical and social options narrow dramatically. In short, because: Bitcoin moves slowly, some action must happen before the relevant computer arrives if we want a non-chaotic outcome.

A credible process therefore matters almost as much as the final rule. The community would need clear definitions, simulations, reference implementations, wallet support, testnet deployments, activation thresholds, recovery research, and communication to nontechnical users. Without that, an ECC deprecation proposal would look like coordination against dormant holders. With it, even opponents could at least evaluate concrete trade-offs instead of reacting to abstractions.

Governance Game Theory

The threat of a quantum attacker is similar to The DAO incident that Ethereum had to deal with in 2016. In other words: the ecosystem had time (about a month) to take action to stop an attacker from getting away with taking ownership of 5% of all ETH at the time. For 5% of all ETH to go into the hands of a malicious actor was considered to be a systemic risk.

To put this in context, from my own analysis of the blockchain I think a reasonable estimate for the number of lost coins with exposed public keys is roughly 2,600,000 BTC, or 13% of the current total supply. In other words, this is about how much BTC I expect would be unable to migrate to a quantum safe locking script if we come to consensus on implementing a post-quantum signature scheme.

However, note a crucial difference between the DAO situation and this one. With the DAO, the Ethereum community had to hard fork in order to regain control of stolen tokens. With a BIP-361 style change, it would be a soft fork. Which is to say:

Opposing the DAO fork was relatively easy: needed not to do anything and stayed on the chain with the original set of rules. That chain is now known as Ethereum Classic.

Opposing a quantum migration soft fork, assuming it has a supermajority of hashrate, would require dissenting users to coordinate a User Rejected Soft Fork, which has never been done before.

The Slippery Slope of Centralization

Some have stated that a forced migration proposal like BIP-361 is untenable because it would set precedent for “centralized planning” over who gets to use Bitcoin. In other words, this could lead to similar types of freezing to stop anyone who is considered a “bad actor” from using the system, such as in response to major thefts and hacks.

We already know that nothing about Bitcoin’s rules is truly immutable. It’s not possible to create a protocol that is impossible to change – the best you can do is to align incentives that make it unlikely to change. In the case of proposing changes as controversial as altering ownership / the money supply, you should expect that such proposals only have the slightest glimmer of being accepted if the alternative is expected to be detrimental to nearly all Bitcoiners.

As for the claim that it will lead to protocol-level confiscation in response to hacks and such, it’s simply not possible for an ecosystem as distributed as Bitcoin to coordinate a response fast enough to outpace an individual actor. To be more precise: trying to blacklist a specific address / set of addresses is infeasible because the “target” of such a protocol-level blacklist would simply move their funds faster than the ecosystem could coordinate freezing them.

Prior Precedents

The DAO was a special case in which a decentralized community actually had time to react to a massive theft, because The DAO’s smart contract essentially had a “cooldown rule” that made them have to wait for a month after initially redirecting funds into their own control before they could send them anywhere else, such as to “cash out.” As such, there was time to gather consensus from the wider ecosystem (they even conducted coin voting) in order to pass a pretty controversial hard fork.

What was the end result? We can actually observe how the market reacted. Despite all of the controversy, the economic reality was clear. Ethereum Classic, which abided by “code is law” and “do nothing” perspective, allowing the attacker to retain control of 5% of the network’s tokens, struggled to even reach 10% of the market value of interventionist Ethereum, which changed the rules of the network in order to return funds to their rightful owners.

As previously mentioned, Bitcoin also had the Value Overflow Incident in which bitcoin created by someone who was just “following the rules of the protocol” had them taken away by a coordinated consensus change.

These are stark examples of why I believe that economic incentives can and will trump moral and philosophical principles. Some will surely say that Ethereum and Bitcoin have little in common, and it’s certainly true that these different networks tend to have very different ethos and driving factors. But from an economic perspective, they share the same incentive structures with regard to a malicious entity controlling a substantial portion of the market cap. Bitcoin in 2026 is a very different ecosystem from Bitcoin in 2016. Consider all of the new entrants, many of which did not adopt BTC as a result of the libertarian standpoint.

It’s a pretty tough sell to get mainstream audiences to believe that bad actors should not be stopped if there is a means to do so. It’s an even tougher sell to tell companies and institutions that are making millions if not billions of dollars off of managing an asset that they should stand idly by and watch an existential threat to their business line carry out an attack that can be prepared for not just months, but potentially years or decades ahead of time.

Framing Matters

I think the worst possible framing of this debate is “quantum safety versus irresponsible users.” That trivializes the property-rights objection. Another terrible framing in my mind is “freezing is always theft, therefore no preparation is needed.” That trivializes the systemic-risk problem and overlooks the options we have to help protect property rights.

Matt Corallo has astutely pointed out that the debate over deprecating the use of vulnerable signatures is interesting because it can be framed in very different ways that sound the same on the surface.

1. “Protect people’s property rights to the greatest extent possible.”
2. “Don’t freeze anyone’s coins.”

The first perspective supports freezing ECC spends while also adding the maximum number of ways to safely recover funds (BIP-32 proofs, pre-Q-day commitments for non-BIP-32 wallets and timelocked coin wallets, etc).

The second stance actually minimizes the number of people who get to keep their coins and maximizes theft exposure. But it’s far simpler and avoids a controversial fork.

Thus I think this is not a binary debate of “to freeze or not to freeze.” Rather, a superior framing of the problem is: what is the optimal set of rules that minimizes property rights violations under conditions where the original cryptographic authentication mechanism is no longer reliable to authenticate rightful ownership?

Under that framing, deprecation of ECDSA signatures becomes more defensible if several conditions are met.

1. There must be a widely reviewed quantum-resistant destination. Users cannot be coerced to migrate into a half-baked or experimental mechanism. The destination may be P2MR plus future PQ script paths, a standardized and well-vetted PQ signature type, a commit-reveal construction, or a hybrid. But it must be usable by ordinary wallets and institutions, not just technically imaginable.
2. The migration window must be long enough for real-world users. Our block space throughput estimates show that raw transaction capacity is only one bottleneck. A serious deadline must account for wallet upgrades, hardware devices, multisig coordination, inheritance, institutional controls, cold storage logistics, and fee spikes. A five-year window may sound long in software terms but may be short for global bearer-asset migration.
3. The deprecation rule should be as objective and narrow as possible. Freezing by named addresses or presumed identity would be poisonous. Freezing by clearly vulnerable spend conditions is more defensible, though still controversial. Even then, designers must avoid accidentally disabling hybrid or recovery constructions that still use EC operations in non-dangerous ways.
4. Frozen funds rescue options are mandatory. A permanent burn maximizes clarity but also maximizes moral injury. Temporary locks, seed-knowledge proofs, commit-reveal paths, or other non-EC ownership proofs may preserve more of Bitcoin’s property-rights ethos. The current recovery ideas are not mature enough to rely on, but they are critical because they change a binary burn-versus-steal choice into a more humane migration path.
5. The community should define warning criteria in advance while accepting that perfect evidence may never arrive. A public CRQC demonstration against secp256k1 would be too late for some attack classes. But vague fear is not enough to justify burning coins. Reasonable criteria might include credible advances in fault-tolerant quantum error correction, government migration deadlines, expert cryptanalytic consensus, observed market stress, or other public signals. The NSA and NIST transitions show that major institutions already consider post-quantum migration a serious planning problem, but institutional caution is not the same as proof that Bitcoin must freeze coins now.

A Goldilocks Problem

A common critique of BIP-361 (other than “quantum computers aren’t real”) is that it is “rushed.” I think this is due to people making incorrect assumptions around activation. No one is claiming that BIP-361 should be activated today or even soon… it’s not even possible until a PQC scheme is activated. Rather, the point of BIP-361 is to have a contingency plan in place in case it looks like the threat is real and a migration becomes desirable.

We settled on a five year migration timeframe for BIP-361 because there are cons to migrating too early and to migrating too late. Migrate too early and we may be imposing great costs upon the ecosystem when it’s not necessary. Also, since post-quantum schemes and quantum safe funds rescue schemes are under active research, migrating too soon could lock us into a suboptimal solution. Migrate too late and we leave the ecosystem open to a systemic threat that could cause massive harm and loss of confidence in the network. We also know it needs to be a multi-year approach because of how long it takes for protocol changes to propagate throughout the ecosystem.

I don’t expect anyone to seriously suggest BIP-361 for activation unless it looks highly likely that a cryptographically relevant quantum computer is less than 10 years away.

Deprecation of ECC could eventually become defensible, but only as a last-resort consensus choice after a viable migration path exists, after objective rules are specified, after a long public deadline is published, and after rough consensus is achieved that allowing vulnerable coins to remain spendable via ECC would create greater rights violations than disabling it.

The most intellectually honest conclusion is that both sides of this debate are defending Bitcoin’s principles, just with slightly different interpretations. The ECC deprecation side defends protocol security, system survival, and property rights against quantum attacks. The do-nothing side defends protocol rule stability, censorship resistance, and the rights of inactive users.

The Path Forward

Bitcoin’s quantum problem is not urgent in the sense that users should panic today. It is urgent in the sense that decentralized systems must solve hard coordination problems before they become emergencies. Waiting until a quantum attacker is visible will leave us with the worst set of possible choices.

The next steps for the foreseeable future do not include BIP-361. Rather, we should focus on preparation:

1. reduce address reuse
2. research recovery proofs
3. reduce reliance on xpub sharing
4. research more optimized PQ schemes
5. activate opt-in quantum safe locking scripts
6. develop multiple contingency plans to prepare for various scenarios

Bitcoin’s quantum migration debate is not a choice between respecting property rights and violating them. It is a choice between competing kinds of property-rights failure. We should treat the quantum threat as a realistic but unquantifiable systemic risk, but not use uncertainty as a premise for premature controversial changes.

Even if a cryptographically relevant quantum computer fails to emerge, showing that Bitcoin takes tail risks seriously will boost confidence in the network and reduce uncertainty about its future.

This piece is featured in the latest Print edition of Bitcoin Magazine, The Quantum Issue. We’re sharing it here as an early look at the ideas explored throughout the full issue.

This post The Quantum Issue: To Freeze Coins Or Not first appeared on Bitcoin Magazine and is written by Shinobi.

Bitcoin Magazine

Deutsche Bank To Debut Bitcoin Custody for Institutional Clients

Deutsche Bank said Wednesday that it would debut a bitcoin custody service for European corporate and institutional clients this year. 

The German multinational said that the service was subject to the completion of the applicable regulatory timeline.

Deutsche Bank’s announcement comes as top banks worldwide launch crypto custody services. BNY Mellon, State Street, Standard Chartered, U.S. Bank, and Citigroup have all either launched or committed to direct crypto custody over the past 18 months.

“Digital assets are not a replacement for the traditional financial system but an important complement to it,” Gerald Podobnik, Co-Head Corporate Bank, Deutsche Bank, said in a statement. 

“We see them as new rails that can coexist with existing market infrastructures while benefiting from the trust, security and safeguards that regulated financial institutions provide. Our aim is to offer clients a secure and regulated gateway to this evolving market. The service will be further developed in line with client demand, regulatory requirements and the bank’s risk appetite.” 

Germany’s biggest lender added it would support a “selected range of digital assets,” other than bitcoin — including stablecoins. 

“The range of supported assets may be expanded over time, subject to client demand and the bank’s product-approval, risk management and regulatory processes,” a statement added. “Tokenized financial instruments are also included in the roadmap.”

News first dropped of the bank working on debuting bitcoin custody services in 2025. A report said that the German banking giant would integrate Bitpanda’s custody infrastructure while working with Taurus to build the solution for corporate and institutional clients.

Just last month, Citi said it would this year debut a bitcoin custody service, allowing institutional investors to custody both traditional assets and bitcoin within one framework, rather than needing separate systems. 

This post Deutsche Bank To Debut Bitcoin Custody for Institutional Clients first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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How MSCI Shifted from Objective Benchmark to Defacto Market Regulator

For decades, the mechanics of global equity indexing were treated as plumbing—hidden, technical, and resolutely administrative. Providers like Morgan Stanley Capital International (MSCI) designed benchmarks to reflect the economic reality of public markets, not to shape it. Their mandate was descriptive, serving as a transparent mirror of global capital flows, sector weightings, and free-float market capitalizations.

That architectural assumption has quietly fractured. Today, the sheer scale of passive index-tracking capital has transformed benchmark administrators from passive cartographers into de facto market regulators. When an index provider determines the eligibility criteria for inclusion in indexes such as the MSCI Global Investable Market Indexes (GIMI), it is no longer merely measuring a company’s market value; it is dictating its access to institutional capital, influencing its cost of borrowing, shaping its shareholder register, and driving its liquidity profile.

Nowhere is this transformation more evident—or more contentious—than in MSCI’s ongoing confrontation with public Bitcoin treasury companies. Following a failed attempt in late 2025 to explicitly target digital-asset holding vehicles, MSCI launched a sweeping consultation on August 3, 2026, aimed at redefining and restricting the index eligibility of “non-operating companies.” While the proposal is drafted in neutral financial terminology, its practical architecture threatens to eject major corporate Bitcoin adopters, most notably Strategy (formerly MicroStrategy), from global benchmarks.

This clash is much more than a corporate dispute over index weighting. It raises a profound structural question for contemporary capital markets: What happens when a private, for-profit index provider acquires the power to penalize corporate balance-sheet innovation, and by extension, exercise private market governance without regulatory accountability?

From Direct Exclusion to Structural Filters

To understand the current crisis, one must trace MSCI’s regulatory maneuvers over the past twelve months. In late 2025, MSCI opened a consultation specifically addressing “Digital Asset Treasury Companies,” proposing to strip index eligibility from any corporate issuer whose digital asset holdings represented 50 percent or more of its total assets. Market participants quickly recognized the measure as an explicit screen against companies that had pivoted their corporate treasuries into Bitcoin.

Facing intense pushback from issuers and institutional investors who pointed out the arbitrary nature of singling out a specific asset class, MSCI shelved that direct approach on January 6, 2026. Rather than dropping the inquiry, however, the index provider retreated to draft a more sophisticated mechanism.

On August 3, 2026, MSCI announced a broader, ostensibly asset-agnostic consultation regarding the eligibility of “non-operating companies” for the GIMI framework. Rather than naming Bitcoin directly, the new proposal establishes a two-step quantitative sieve designed to catch companies deemed to be operating primarily as holding vehicles or investment funds rather than traditional operating businesses.

The methodology proceeds in two distinct stages:

1. The Core Screen: MSCI applies a primary balance-sheet test to determine whether an issuer maintains substantial operating assets. A company clears this initial hurdle if its operating assets exceed 50 percent of its total assets.
2. The Exclusion Screen: For any issuer failing the core screen, MSCI applies five non-industry-specific financial ratios: operating asset intensity, expense intensity, operating cash flow, fair value intensity, and capital dependence. If a company triggers failing thresholds on at least four of these five metrics, it is classified as a non-operating company and rendered ineligible for index inclusion.

While existing constituents receive modest procedural protections—such as a more lenient 10 percent operating asset floor rather than 20 percent and a requirement to fail the screen in two consecutive annual filings before removal—the structural intent is clear. The simulation accompanying the August 2026 consultation revealed that applying the screen to the MSCI ACWI IMI universe using mid-2026 data would immediately flag and delete major public Bitcoin treasuries, including Strategy and Japan’s Metaplanet, alongside UK-based uranium holding vehicle Yellow Cake plc, while placing firms like SharpLink, Center Laboratories, and Lydia Holding onto a public watchlist.

The Targets and the Quantitative Realities

The primary focal point of this methodology is Strategy. Following its multi-year pivot into accumulating Bitcoin as its primary treasury reserve asset, Strategy has amassed over 845,050 bitcoin, making it the largest corporate holder of the asset globally. In the simulation data released by MSCI, Strategy—boasting a float-adjusted market capitalization exceeding $23.9 billion among the flagged entities—accounts for the vast majority of the affected market value.

The financial stakes of index inclusion for a company of this scale are frequently misunderstood. Critics of corporate Bitcoin strategies often assume that index exclusion triggers a terminal liquidity catastrophe. Yet empirical analysis of trading volumes reveals a more nuanced picture. Industry estimates indicate that passive funds tracking MSCI GIMI indexes hold roughly 3.1 percent of Strategy’s basic shares outstanding, amounting to approximately 13 million shares. When measured against Strategy’s robust trading velocity—where daily volume regularly absorbs hundreds of millions of dollars—that passive exposure represents less than a single average trading day.

Consequently, the true threat of MSCI’s proposal is not a mechanical liquidity shock, but rather a structural and narrative penalty. Index exclusion closes doors to specific institutional mandates, benchmark-restricted pension pools, and broad-market ETFs that are legally or contractually bound to replicate MSCI indexes. It penalizes a company not for operational failure, but for balance-sheet structure.

The Accounting and Legal Clash: GAAP versus Index Discretion

Strategy launched an aggressive counter-offensive in late August 2026, led by founder Michael Saylor and CEO Phong Le. In formal communications to MSCI and public filings, the company blasted the consultation as a “misguided,” “flawed,” and “discriminatory” pretext designed to achieve through backdoor ratio screens what MSCI failed to accomplish with its direct digital asset proposal in 2025.

The core of Strategy’s legal and accounting argument hinges on the definition of an operating business. Strategy noted that its terminology—dividing issuers into “operating” and “non-operating”—has no formal grounding in U.S. Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS), or any recognized statutory securities framework.

Furthermore, Strategy underscored that it reports its Bitcoin activities as an official operating segment under U.S. GAAP, a classification arrived at through extensive engagement and alignment with staff at the U.S. Securities and Exchange Commission (SEC). By treating Bitcoin treasury operations, capital markets issuance, and asset management as core segments of an enterprise that employs over 1,500 people globally and generates hundreds of millions in software revenue, Strategy argues that MSCI is substituting its own arbitrary policy judgments for established regulatory and accounting standards.

In a particularly sharp rhetorical turn, Strategy’s pushback weaponized MSCI’s own historical regulatory positions. The company highlighted a 2022 SEC concept release examining whether information providers and index administrators exercise sufficient market power to bring them within the purview of the Investment Advisers Act. By forcing index providers to judge whether an asset class like Bitcoin belongs inside an operating business, MSCI risks undermining its foundational claim to absolute neutrality—the bedrock principle that index providers merely reflect market reality rather than passing moral or strategic judgment on corporate balance sheets.

The Double Standard of Asset Concentration

Beyond technical accounting definitions, the institutional debate centers on consistency. Critics of MSCI’s methodology argue that the proposed financial ratios are applied unevenly across asset classes.

Consider the treatment of real estate investment trusts (REITs) and mortgage REITs (mREITs). MSCI benchmarks routinely include entities whose balance sheets are overwhelmingly concentrated in a single asset class—commercial real estate, residential mortgages, or physical property portfolios—and whose revenues and valuations are driven entirely by external market cycles, rental yields, and continuous capital raises via debt and equity markets. These entities rely heavily on external capital dependence to scale their portfolios, mirroring the capital-raising mechanics utilized by Bitcoin treasury companies.

Yet under MSCI’s proposed framework, asset concentration and capital dependence in real estate are deemed fully compatible with index inclusion, whereas identical structural strategies executed in digital assets are classified as disqualifying non-operating traits. This disparity exposes the fundamental vulnerability of MSCI’s criteria: they rely on subjective definitions of “operations” that can easily be tailored to exclude disfavored asset classes while sheltering traditional ones.

The Structural Crisis of Private Governance

The confrontation between MSCI and Bitcoin treasury companies transcends the crypto asset ecosystem. It illuminates a broader institutional crisis concerning the unaccountable power of private index providers.

Over the past two decades, the migration of capital from active management to passive index-tracking funds has concentrated immense economic leverage in the hands of a small oligopoly of index administrators, dominated by MSCI, FTSE Russell, and S&P Dow Jones. These firms operate as private, for-profit entities, yet their methodology documents function with the force of public law for corporate issuers.

When an index provider unilaterally alters its inclusion rules to penalize specific corporate treasury models, it engages in private market governance. Unlike regulated public exchanges or statutory securities regulators, index committees operate behind closed doors, subject to limited public transparency, no formal administrative procedure acts, and virtually no recourse for aggrieved issuers other than public lobbying.

If MSCI succeeds in establishing the precedent that holding non-traditional reserve assets on a corporate balance sheet strips a public company of its operating status, it creates a dangerous chilling effect. Today, the target is Bitcoin; tomorrow, it could be corporate holdings of physical commodities, strategic technology stakes, gold, real estate, data centers or alternative monetary reserves that conflict with the prevailing preferences of institutional ESG or benchmark committees. Corporate directors lose the sovereign right to optimize their balance sheets for shareholder value if doing so risks excommunication from the passive capital ecosystem.

The Timeline, the Stakes, and the Regulatory Reckoning

The immediate resolution of this conflict is rapidly approaching. The public consultation period for MSCI’s non-operating company proposal closes on September 30, 2026, with a final determination expected by October 16, 2026. If adopted in its current form, constituent reclassifications will be published on November 11, 2026, and implemented on December 1, 2026.

Yet for institutional investors, asset managers, and corporate executives, the stakes extend far beyond the ticker symbol MSTR. The outcome will test whether public companies retain the autonomy to innovate their balance sheets in an era dominated by passive gatekeepers, or whether benchmark administrators have officially crossed the line from measuring markets to regulating them.

The solution does not lie in government micromanagement of index design, but in statutory accountability. The U.S. Securities and Exchange Commission and global securities regulators must stop treating index providers as invisible software plumbing. When an index committee’s discretionary classifications can dictate corporate access to capital, distort price discovery, and bypass standard administrative notice-and-comment safeguards, that committee is acting as a de facto market regulator.

Regulators must revisit the framework governing dominant index providers under the Investment Advisers Act, demanding transparent due process, strict standards against arbitrary discrimination, and formal accountability for decisions that alter capital formation.

Until market authorities recognize that index providers have become systemic gatekeepers, the free market for corporate control will no longer be governed by shareholders, boards, and public statutes—it will remain at the mercy of unelected private arbiters in New York and London.

Take Action to Protect Index Neutrality

The boundary between measuring market value and regulating corporate behavior is being erased. MSCI’s proposed “non-operating company” screen threatens to penalize balance-sheet innovation, misclassify legitimate operating businesses, and set a dangerous precedent for private governance in capital markets.

Don’t let private index administrators dictate corporate treasury strategy behind closed doors. The public consultation window closes on September 30, 2026.

Join business leaders, institutional investors, and advocates for open capital markets:

• Sign the Open Letter: Add your voice or your organization’s signature to demand that MSCI withdraw the proposed screen and publish all market feedback at msci.bitcoinforcorporations.com.

Disclaimer: This content was prepared on behalf of Bitcoin For Corporations for informational purposes only. It reflects the author’s own analysis and opinion and should not be relied upon as investment advice. Nothing in this article constitutes an offer, invitation, or solicitation to purchase, sell, or subscribe for any security or financial product.

This post How MSCI Shifted from Objective Benchmark to Defacto Market Regulator first appeared on Bitcoin Magazine and is written by Nick Ward.

Two Robinhood engineers were charged with using confidential token-listing information to place profitable crypto derivatives trades on Hyperliquid.

On Sept. 15, the Federal prosecutors accused Hefu Chai and Huaisong “Jerry” Xiang of trading perpetual futures tied to tokens they allegedly knew Robinhood Crypto planned to list, earning more than $50,000 each.

These charges extend insider-information enforcement into a part of crypto markets where confidential information held at one company can be monetized through derivatives traded on a separate decentralized platform.

Both men face one count of commodities fraud and one count of wire fraud. The charges carry statutory maximum sentences of 10 years and 20 years, respectively.

Chai worked at Robinhood from about 2021 until May 2026 and served as a technical lead involved in new digital-asset listings, prosecutors said. Xiang worked as a software engineer from about 2024 through September 2026.

Their positions allegedly gave them access to a private Slack channel containing upcoming listing plans. Both were designated “Coin Aware Individuals,” employees permitted to receive information about whether and when Robinhood Crypto would make new tokens available.

Robinhood’s policies barred those employees from trading while holding material nonpublic information and restricted them from trading affected assets on any platform before an announcement and for 24 hours afterward.

US Attorney Jamie McDonald said:

“Misappropriating confidential information to trade in the derivatives markets for personal benefit is illegal. Today’s charges make clear that corporate insiders cannot evade the securities and commodities laws by trading based on misappropriated information in derivatives like perpetual futures, tokenized securities, or other similar financial instruments.”

Prosecutors said Chai traded on at least 10 occasions between 2025 and January 2026. Xiang allegedly traded around a March 2025 POPCAT listing and on at least 10 other occasions through February 2026.

Prosecutors focus on the window before Robinhood's public announcements

The government’s case centers on the gap between when a token became tradable on Robinhood and when the company publicly announced the listing.

Robinhood tokens could begin trading as much as an hour before an announcement, prosecutors said, creating a window in which employees with advance knowledge could potentially exit positions before the broader market received the news.

In one example, Xiang allegedly learned around Jan. 23, 2026, that Robinhood planned to list RENDER on Jan. 29. Prosecutors said he opened long RENDER perpetual-futures positions around the listing date and closed them at a profit after the token became available on Robinhood but before the public announcement.

Chai allegedly used a similar strategy involving HYPE. Prosecutors said he learned around Oct. 16, 2025, that Robinhood planned to list the token the following week, then opened HYPE perpetual positions around Oct. 23 and exited profitably after trading began on Robinhood but before the announcement.

Those trades were placed on Hyperliquid, a decentralized derivatives venue where perpetual futures allow traders to speculate on token prices without holding the underlying assets.

The case now puts the alleged use of confidential listing information in decentralized derivatives markets before a federal court, potentially testing how prosecutors apply commodities-fraud statutes when the information source and trading venue are separate.

Robinhood cooperated with the investigation, the Justice Department said. The company may also face pressure to reassess how it segments listing information internally and monitors employee trading restrictions across external crypto venues as prosecutors pursue the case.

The post Robinhood engineers face up to 30 years over $50,000 alleged Hyperliquid profits appeared first on CryptoSlate.

Solana treasury company DeFi Development Corp. has opened an at-the-market program for up to 30 million CHAD preferred shares, creating an optional financing channel that could support further SOL purchases alongside other corporate uses.

CHAD is variable-rate perpetual preferred stock. Its $10 stated amount is the base used to calculate dividends; the security's market price and eventual sale prices can differ. Multiplying that stated amount by the program's 30 million-share limit gives $300 million of aggregate stated amount. Cash proceeds will depend on actual issuance volume and market prices.

The September 11 prospectus sets no minimum offering amount and gives no assurance that any or all shares will be sold. DeFi Development is not obligated to issue shares, while R.F. Lafferty is not required to sell a specific number or dollar amount. The agent can receive up to 0.75% of gross proceeds, and the company must cover specified offering expenses.

The larger continuing cost comes from CHAD's cumulative dividend. Regular dividends initially accrue at 13% a year on the $10 stated amount, equivalent to $1.30 per share annually. Cash payment remains subject to board declaration and legally available funds.

If all 30 million ATM shares were outstanding for a full year and the initial rate did not change, they would accumulate $39 million in dividends on an annualized basis. The scenario assumes full issuance for a full year at an unchanged rate; actual accumulation will vary with the number and timing of sales and subsequent rate decisions.

The board determines the regular annual rate at least monthly. Any monthly reduction is limited to 50 basis points and subject to timing, prior-dividend and market-price conditions. The 13% figure applies initially, and later rates can change.

DeFi Development Corp. says a portion of net proceeds will acquire SOL. Working capital and strategic initiatives are also permitted uses, leaving management broad discretion and no fixed allocation to the token.

The company reported 2,388,923 SOL and SOL equivalents as of September 11, up 55,491 from August 27. It attributed the increase to purchases and organic treasury growth without splitting the two. Separately, establishing the ATM created future financing capacity. The disclosed causes of the treasury increase do not include ATM proceeds.

The program follows a separate CHAD offering that closed September 8 at $8 per share and generated approximately $11 million gross. It also adds a preferred-share route alongside the common-share financing and cost reductions CryptoSlate covered in August.

The new ATM currently represents optional financing capacity. Its eventual economics will depend on issuance volume and price, the dividend rate over time and management's allocation of proceeds.

The post Solana treasury giant DeFi Development opens $300M CHAD offering backed by a massive 13% dividend catch appeared first on CryptoSlate.

The XRP Ledger (XRPL) validated 3,254 transactions in ledger 106,965,249 on Sept. 13, giving the network a high-count mainnet result with a highly concentrated workload.

The ledger closed at 20:51:50 UTC, with 20 submitting accounts supplying 2,000 successful one-drop XRP payments, with each account submitting exactly 100 payments. The batch delivered 0.002 XRP.

Vet, an XRPL community figure posting as @Vet_X0, described the ledger as a new record and said the pattern probably reflected throughput testing.

The immediate result is that XRPL reached consensus on an unusually large set of included transactions. The composition of that set limits conclusions about sustained throughput, adoption, and XRP demand.

A closer look at the 3,254 transactions

The ledger recorded 2,295 successful results and 959 unsuccessful results. Its 2,000 one-drop payments made up most of the successful group, while several other transaction types added different forms of activity.

The complete transaction list contains 2,467 Payment transactions, 458 OfferCreate transactions, 229 TicketCreate transactions, 74 CheckCash transactions, 22 TrustSet transactions, three AccountSet transactions, and one NFTokenCancelOffer.

Successful native-XRP Payment transactions delivered 323.641509 XRP, while 3 successful CheckCash transactions delivered another 1,950 XRP, bringing the sum across native delivered_amount entries to 2,273.641509 XRP.

Both figures exclude issued-currency value and fall short of a total economic-volume measure because XRP and issued assets use different units, while order fields describe proposed exchanges rather than a single settled-value total.

Of 458 OfferCreate transactions, 440 returned non-success codes: 379 tecKILLED and 61 tecUNFUNDED_OFFER. Those 440 are a subset of the ledger's 959 non-success results.

The ledger combined a large stream of successful micro-payments with unsuccessful activity and a smaller set of other operations. The 20-account pattern establishes concentration at the submitting-account level.

All Fee fields summed to 111,136 drops, equal to 0.111136 XRP, creating a second measurable connection to XRP. XRPL's transaction-cost documentation explains that included transactions destroy their specified fees, including transactions that finish with certain failure codes.

The XRPL capacity signal and the demand question

The official Payment reference distinguishes direct transfers from cross-currency and path-based payments. Cross-currency transactions can traverse intermediary steps and consume decentralized exchange offers.

These mechanics make raw transaction counts an incomplete basis for comparing workloads.

Official documentation says the soft transaction limit rises when a ledger exceeds it and falls when consensus takes more than five seconds. The open-ledger cost can increase exponentially after that threshold. Ledger 106,965,249 shows that consensus included this particular transaction mix.

As of Sept. 15, XRP price registered an intraday high of $1.50, with $4.5 billion in 24-hour trading volume. Its Trading Activity indicator was 84 out of 100, and its Market Signal was Bullish at 65 out of 100.

For holders, the on-chain evidence supports delivered XRP and destroyed fees as measurable quantities. Durable token demand would require broader evidence, such as users acquiring and retaining XRP or economically significant activity consistently routing through the asset.

Recent reports pointed out to concentrated automated XRPL activity, stablecoin and DEX liquidity, and infrastructure for a future lending protocol.

Comparable scale from path payments, exchange activity, tokens, and future lending, paired with successful settlement and measurable value, would provide a more consequential capacity test.

The post XRPL proved it can handle over 3,000 transactions, but the traffic was entirely synthetic appeared first on CryptoSlate.

Cardano collected 3.3 million ADA in transaction fees while recording 493.7 million ADA in staking rewards across the 73 epochs ending Sept. 1, 2026, according to Bitquery's full-chain count. Fees covered about 0.668% of rewards, leaving the reward total roughly 149.6 times larger than fee revenue.

The figures turn Cardano's fee-replacement question into a measured economic gap. Planned upgrades may give the network enough throughput to process far more activity, while sustainable staking rewards still depend on applications and users generating substantially more fee revenue.

Cardano's fee-reward gap spans two measurement windows

The Bitquery analysis counted Cardano transactions from the network's first block and grouped the latest reward comparison into 73 five-day epochs from Sept. 1, 2025, through Sept. 1, 2026.

Its 3.3 million ADA fee total amounted to about one ADA for every 150 ADA in staking rewards. Reserve emissions supplied the dominant share of the reward economy during the period.

Cardano's epoch 655 supply page offers a shorter official snapshot. It attributed 108,500 transactions and 33,855 ADA in fees to completed epoch 654. Spread across five days, that was about 21,700 transactions per day, or 0.251 transactions per second. Fees equaled about 0.339% of roughly 9.998 million ADA in distributed rewards for the epoch.

The one-epoch snapshot uses a different reward denominator from Bitquery's 12-month staker total, so the percentages are not directly interchangeable. Each window nevertheless places transaction fees at well below 1% of its respective reward measure.

The long-window transaction count also points to weaker demand. Cardano averaged 90,294 transactions per day in 2022. From January through August 2026, the average was 24,869, a decline of 72.46%.

Activity composition changed at the same time. Bitquery classified wallets sending at least 3,000 transactions in a month as bots unless their behavior resembled an exchange. Under that method, bots' share of transactions rose from 11.5% in 2022 to 32.8% in 2026, with batchers forming the largest identified bot subgroup.

Those counts describe on-chain actions rather than unique people. One bot can submit thousands of transactions, while a decentralized exchange batcher can process orders for many customers. A modern Cardano wallet can use multiple addresses tied to one stake key, and a holder who stakes ADA without moving it remains absent from a count of sending wallets.

The transaction decline still matters for fee revenue because every action creates an opportunity to pay a fee. It cannot reveal how many people left, remained active or delegated their coins.

Bitquery also measured a decline in the share of circulating ADA staked, from 75.6% at the end of 2022 to 58.3% in the last epoch of its study period. That is a participation measure. The cited evidence contains no direct security-outcome metric, so it cannot support a claim that network security has already deteriorated.

The reserve creates runway as its contribution declines

Cardano's epoch 655 data showed 6,126,859,027 ADA left in reserves, equal to 13.62% of the network's 45 billion ADA maximum supply.

The reserve is designed to shrink. Under Cardano's monetary policy, transaction fees and 0.3% of the remaining reserve enter a virtual pot each epoch. The treasury receives 20% of that pot, and the balance is available for stake rewards, subject to pool performance. Unclaimed rewards remain in the reserve.

Applying a fixed percentage to the remaining balance produces exponential decay. Cardano's documentation describes a reserve half-life of roughly four to five years, without setting a definitive exhaustion date.

That declining reserve contribution changes the reward side of the equation. Nominal reward outlays can fall as emissions decline, which would reduce the fee revenue needed to match them. A lower target would still leave the network dependent on real economic activity if fees are to replace a larger share of rewards.

Cardano's fee structure provides another variable. Current minimum fees combine a fixed component with a charge based on transaction size, and protocol governance can change those parameters. Higher revenue per transaction would narrow the gap with less traffic, although the price of block space can also influence demand.

Holding average fees constant shifts the calculation toward activity. Scaling the 2026 average of 24,869 daily transactions by the current 149.6 reward-to-fee ratio produces about 3.72 million transactions per day, or roughly 43.1 transactions per second.

That is a simplified gross scenario calculated before the 20% treasury allocation. It is a translation of the measured gap, rather than a forecast or a precise break-even point.

The 43.1 TPS illustration broadly aligns with CryptoSlate's Sept. 8 model, which estimated that replacing reserve-funded rewards could require roughly 36 to 50 sustained transactions per second. That model placed a central estimate near 45 TPS after the treasury cut.

Linear Leios is designed for throughput above that range. The proposed CIP-164 specification models sustained capacity above the simplified 43 TPS scenario, giving Cardano a plausible technical path to process the necessary volume.

Leios test results leave the demand question open

Test results address only the capacity side. Cardano reported roughly sixfold Leios performance in an August public testnet update, using synthetic traffic. The result showed that the design could process more load under test conditions. It supplied no evidence that mainnet users would generate enough activity to multiply fee revenue by roughly 150.

Deployment also remains ahead. Intersect's Dijkstra planning document targets code completion in the fourth quarter of 2026, excluding Preview and pre-production testing and governance time from that schedule. The mainnet hard-fork date remains undetermined.

The economic equation has several moving parts. More transactions and higher average fees increase the revenue side. Declining reserve emissions and lower reward outlays reduce the amount that fees would need to replace. Leios enlarges Cardano's processing capacity, but adoption decides how much of that capacity generates revenue.

For now, the measured distance is stark: 3.3 million ADA in fees against 493.7 million ADA in rewards. Leios may remove a technical ceiling, while Cardano's larger test is attracting enough paid activity to turn capacity into durable network income.

The post Cardano fees covered just 0.7% of staking rewards as transactions fall 72% appeared first on CryptoSlate.

HM Treasury has laid the final draft of the Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026, which would narrow parts of the UK’s forthcoming crypto regulatory perimeter for UK qualifying stablecoin payments.

The draft instrument, laid before Parliament on Sept. 15, would remove qualifying transfers from the rules for dealing as principal, dealing as agent and arranging deals. It has not been made and is not in force.

The relief is narrower than a blanket exemption for sterling stablecoins. A UK qualifying stablecoin must be issued through the regulated article 9M activity by a firm holding the relevant permission. An overseas-issued token, or a coin that merely tracks sterling, would not qualify on that basis alone.

Sending a UK qualifying stablecoin to another person could fall outside the dealer perimeter. So could exchanging it for money or another UK qualifying stablecoin.

The boundary changes when the transaction resembles financing or crypto trading. If the recipient has a right or obligation to return the stablecoin later, the transfer does not receive the basic exclusion, leaving ordinary lending or borrowing potentially regulated when the underlying activity tests are met. Swapping the stablecoin for another kind of qualifying cryptoasset, such as Bitcoin, also remains outside the payment carve-out.

The final text adds a separate wholesale-style exception for some title-transfer collateral and repo arrangements involving qualifying stablecoins. It can apply when the original holder is neither a consumer nor a person in a category specified by the Financial Conduct Authority.

Temporary UK qualifying stablecoin holding gets custody relief

A new safeguarding provision would exclude temporary holding of a UK qualifying stablecoin when that holding is connected with executing a payment. Longer-term custody, such as maintaining a customer wallet, receives no equivalent payment exception and can remain within the safeguarding activity.

That differs from HM Treasury’s April proposal, which said payment firms would still need safeguarding permission and proposed limiting the temporary-settlement exclusion to holding ancillary to other crypto activities. The final draft instead distinguishes brief payment execution from continuing custody.

The financial-promotion rules, which govern marketing, broadly align with the transfer, exchange, collateral and repo exclusions. Their coverage is not identical, and arrangements requiring the stablecoin to be returned do not receive the basic promotion exemption.

The dealing, arranging and financial-promotion amendments are drafted to begin on Oct. 25, 2027, when the FCA says the new regime for crypto firms starts. Amendments made through regulation 4 would begin after the instrument is made. Parliament must approve the draft first, and HM Treasury’s separate payments reform still has to define the longer-term rules for stablecoins used in payments.

The post UK opens a major loophole for stablecoin payments while clamping down on crypto lending appeared first on CryptoSlate.

When you move XRP from a wallet to an exchange, one small numeric field decides whether your balance lands in your account within seconds or sits with support for weeks. That field is the destination tag. It is neither an optional extra nor a payment reference of the kind you add to a bank transfer. It is the only piece of information an exchange has to work out which customer the money belongs to.

The short answer first: if the tag is missing, your money is usually not lost, but it has not arrived either. It sits in the exchange pooled account, and whether you get it back depends on how well that exchange runs its support desk and whether it assigns the transaction manually at all.

What is a destination tag on XRP, and why does almost every exchange require one?

A destination tag is a number that assigns an XRP payment to a specific customer account inside a shared receiving address. Technically it is an unsigned 32-bit integer, according to the XRP Ledger documentation. The permitted range therefore runs from 0 to 4,294,967,295.

The reason for this design lies in how the XRP Ledger is built. Every address on the network has to hold a minimum amount of XRP permanently in order to exist at all. That base reserve currently stands at 1 XRP, and each additional entry in the account ties up a further 0.2 XRP. We queried these values directly from the network on September 16, 2026, against validated ledger number 107,024,932.

For an exchange with millions of customers, a separate address per customer would therefore be expensive and would inflate the network permanently. The exchange uses a single deposit address for everyone instead and separates customers through the tag. The address is identical for thousands of users. Only your number belongs to you.

The practical rule follows directly from that. For a transfer to an exchange you have to carry over two details correctly, the address and the tag. For a transfer to your own wallet you generally need no tag, because only one recipient exists there.

How to spot a destination tag in the deposit dialogue

The labels differ from provider to provider. Destination tag, target tag, XRP tag or simply tag are all common. Some interfaces show the number in a separate field directly below the address, others only reveal it once you have selected XRP as the coin. If you are shown a bare address with no further field at all, that does not automatically mean no tag is needed. It can also mean you are in the wrong dialogue, for example in a view meant for a different cryptocurrency.

Why an XRP deposit without a destination tag is not credited automatically

A common misconception holds that a payment without a tag goes nowhere. That is not the case. The transaction is executed normally on the XRP Ledger and validly confirmed, the balance does change hands and then sits at the exchange pooled address. On the ledger, everything looks like a successful transaction.

The problem arises one level up, in the exchange accounting system. That system looks for a tag, finds none and cannot allocate the incoming funds to any of its many accounts. The amount is left in an intermediate state: genuinely present, yet without an owner in the internal database.

What happens next is no longer a technical question but one of internal process. Large regulated providers have a documented procedure for such cases and allocate the deposit manually after a review, often against a processing fee and with a waiting time of several weeks. Smaller platforms sometimes point out that a subsequent allocation is technically not provided for.

Keep this case clearly apart from a payment sent to the wrong address. There the balance has landed with a stranger, and the outlook is considerably worse. What can still be done in that situation is covered in our separate article on crypto sent to the wrong address.

The Require Destination Tag flag: when the XRP Ledger rejects your payment on its own

The XRP Ledger has a safeguard against precisely this error. An account holder can set an option on their address that the protocol calls asfRequireDest. While it is active, the network rejects every incoming payment that carries no destination tag.

The rejection code is tecDST_TAG_NEEDED. The official reference for the tec error codes describes it as the case in which a payment omits the destination tag even though the receiving account has set the flag.

For you as the sender, that is the friendliest form of failure. With a tec code the transaction is still recorded in the ledger and the transaction fee is spent, but the transferred amount is not delivered. Fees on the XRP Ledger sit in the range of fractions of a cent. You lose practically nothing and get immediate, clear feedback instead of waiting weeks for a credit.

That raises a question nobody has asked systematically so far: how many of the exchanges that German investors actually use have this protection switched on?

Our own survey: 114 exchange accounts on the XRP Ledger checked

cryptoticker.io compiled this analysis itself on September 16, 2026. We wanted to know at which trading venues the network catches a missing tag on its own, and at which the error runs through unchecked.

The method in one sentence: we pulled the publicly attributed XRP Ledger accounts of 25 exchanges from the open name directory at XRPScan and, for every single account, queried the network directly to read whether the requireDestinationTag flag is set.

We checked 114 accounts across 25 trading venues, each against the validated ledger of September 16, 2026. The result: at 21 of the 25 exchanges, at least one publicly attributed account carries the protective flag. At four houses we found no flag set at all among the accounts we checked.

The spread within individual houses is striking. At one provider all ten accounts checked carried the flag, at others it was one out of seven or one out of ten. That is to be expected and unremarkable in itself, because alongside its deposit address an exchange runs further accounts for internal settlement, for withdrawals and for cold storage. Those accounts do not need the protection.

What these figures expressly do not mean

The limits of this survey belong with it, otherwise a measurement reads as a verdict. Three things we could not check.

First, the attribution of accounts to exchanges comes from a third party public directory. We did not have the houses themselves confirm which address is genuinely the active deposit address. Second, from the outside we cannot see which address your provider shows you in its deposit dialogue, and that is the one that matters to you. Third, a missing flag says nothing about the quality of a provider: some platforms hold XRP on a purely custodial basis and give their customers no ledger deposit address of their own, while others catch the error at a different technical level.

Only the general reading is therefore robust, and it is enough for your decision. At some of the common trading venues the protocol safeguard applies, at others it demonstrably does not. You cannot rely on it. Anyone switching account or choosing a new one right now will find the venues available in Germany, fees included, in our comparison of the best crypto exchanges.

XRP sent without a tag: which steps actually help now

If it has already happened, speed and complete details are what count. Support can only allocate your deposit if you identify it unambiguously.

Secure the transaction hash from your sending wallet first. That is the long string which names every transfer on the ledger uniquely, and it is the most important piece of evidence. Note the sending address, the receiving address, the exact amount and the timestamp alongside it.

Then open a ticket with your exchange support desk and describe the transaction in plain words: deposit without a destination tag, with a request for manual allocation. Stay on the official channel of your account. Expect a processing time of several weeks and the possibility of a fee.

What you should not do matters just as much. Never respond to offers of help that reach you by direct message or email afterwards, and never hand over your seed or private keys. A separate scam has grown up around lost deposits, in which criminals pose as support staff. An exchange will never ask you for your seed.

Destination tag, memo and note: which coins besides XRP are affected

The pattern is not confined to XRP. It turns up wherever a network provides no low-cost individual addresses and exchanges therefore work with pooled accounts.

On Stellar the field is called memo, on Cosmos likewise memo, and on Hedera a note is used. The label changes, the mechanics stay the same: one shared address, one additional field to tell payments apart. The consequences of a missing entry match each other too.

Remember the broader rule, then. If a deposit dialogue shows you a second mandatory field alongside the address, that field is exactly as binding as the address itself. An additional field left empty is the most common avoidable error in transfers between a wallet and a trading venue.

Check in two minutes whether your XRP transfer needs a tag

This order costs you little time and covers the realistic sources of error.

Always open the deposit dialogue only after selecting XRP as the cryptocurrency, and read the page in full. Take the address and the tag across by copy function or QR code alone, never by typing them out. A transposed digit in the tag means your payment is credited to someone else's account, and that case is considerably harder to cure than a missing tag.

With a larger amount, send a small test transfer first and wait for the credit before the rest follows. The network fee on the XRP Ledger is so small that this test is effectively free. Afterwards check that the amount credited matches the amount sent exactly.

For the return leg, meaning withdrawals from the exchange to your own wallet, a withdrawal whitelist is worth adding. It limits withdrawals to addresses you have registered in advance and takes the option of a transfer away from an attacker even once they are inside your account.

Why so many XRP transfers are going wrong right now

The subject is pressing for a concrete reason. Deadlines forcing customers to act are running out at several trading venues in these weeks: cryptoticker.io reported on the closure of CoinEx on September 15 and on the withdrawal deadline at KuCoin on September 8, alongside ongoing delistings of individual tokens at further exchanges.

Deadlines like these set holdings in motion. Balances move from one platform to the next or into self-custody, and they move under time pressure. Experience shows that transfer errors cluster precisely when users operate an interface for the first time while watching a deadline.

If you are pulling XRP off a platform in the coming weeks, do not plan the transfer for the final day. If something goes wrong and support has to step in manually, you need a buffer. Once a withdrawal deadline has passed, a solvable allocation problem quickly turns into an unsolvable one.

Self-custody instead of a pooled account: when your own XRP wallet is worth it

The tag issue affects payments to pooled addresses alone. Transfer to your own wallet and it falls away, because only one recipient exists there and the address belongs to you alone.

That is an argument for self-custody, though not a free pass. Your own wallet shifts responsibility entirely to you: the protection of your recovery words then decides over your balance, and nobody can reverse a mistake on your behalf. For larger holdings you intend to keep for a while anyway, a hardware wallet is the established route. How the devices differ and what to look for when buying is set out in our hardware wallet comparison.

Note one peculiarity of self-custody with XRP: your own address also has to hold the base reserve of 1 XRP permanently before the account is activated on the ledger at all. A freshly created XRP wallet is not a valid account until the first sufficient deposit, so a first transfer that is too small can fail. Plan the opening deposit accordingly.

Checking the destination tag: what to take away

1. Treat the tag like the address. On every transfer to an exchange, copy both details out of the deposit dialogue and type neither of them. If you are considering a change of trading venue anyway, compare the providers available in Germany beforehand in our crypto exchange comparison.
2. Test before you send the whole amount. A small advance transfer costs fractions of a cent on the XRP Ledger and shows you within seconds whether the address and the tag are right. Secure the return leg as well with a withdrawal whitelist.
3. Do not rely on the network to protect you. Our survey of September 16, 2026 shows that the protective flag was not set on the checked accounts of four of the 25 houses. Anyone holding larger amounts long term bypasses the pooled account entirely and uses their own wallet, for instance a device from our hardware wallet comparison.

(As of September 16, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)

Putting Bitcoin up as collateral for a loan is not a sale. That is exactly why no tax arises at that moment: a private disposal transaction requires you to transfer an asset to a third party for consideration. When you borrow against your coins, the Bitcoin stays attributed to you for tax purposes, the one-year clock keeps running undisturbed, and the loan proceeds are not income. The expensive part sits in one single place, namely when the lender liquidates your collateral. That creates a sale you did not trigger, at a price you did not choose, possibly in the middle of your holding period.

This article sets out the position under German law: the Income Tax Act, the Fiscal Code and the current circular of the Federal Ministry of Finance on crypto assets. It also shows where those sources stay silent, because the expensive misunderstandings grow in exactly those gaps.

Why pledging Bitcoin as loan collateral is not a sale

For tax purposes, crypto assets are other assets within the meaning of section 23(1) sentence 1 number 2 of the German Income Tax Act. The Federal Fiscal Court confirmed this in its ruling of February 14, 2023, case reference IX R 3/22, and the Federal Ministry of Finance adopted it in margin number 53 of its circular of March 6, 2025. The basic rule follows from that. Sell within one year of buying and the gain is taxable. Where more than twelve months lie between acquisition and disposal, it stays tax free.

A private disposal transaction is a transaction in which an acquired asset is passed on for consideration within that period. Margin number 54 of the circular puts it the other way round: an acquisition is the purchase from third parties for consideration, a disposal the transfer to third parties for consideration. Both require an exchange of performance.

A classic crypto loan lacks that exchange. You hand over Bitcoin as security and receive a loan you have to repay. No consideration flows to you, and your claim to the coins remains intact. In economic terms you have given nothing away, you have pledged something. No gain and no loss therefore arises at the moment the collateral is posted, and there is nothing to report on your tax return.

Section 39 of the Fiscal Code: who owns the coins for tax purposes under a security transfer

The decisive provision sits in the Fiscal Code rather than the Income Tax Act. Section 39(1) attributes assets to their owner. Subsection 2 number 1 sentence 2 makes an express exception and names three cases: under a trust arrangement the asset is attributed to the settlor, under a security transfer to the party providing the security, and under proprietary possession to the proprietary possessor.

A security transfer describes the arrangement in which you transfer legal title to an item to the creditor so that the creditor is covered, while you remain the owner in economic terms. For this precise case the legislator decided that tax follows the economic position, not the register or the wording of the contract. Applied to a Bitcoin-backed loan, that means the following. Even if your lender formally becomes the owner of the pledged coins and moves them to an address of its own, they remain yours for tax purposes. No disposal, no fresh acquisition, no new holding period.

That attribution is the reason borrowing against Bitcoin works as a tool in Germany at all. Anyone who needs liquidity without triggering a taxable disposal can raise it through a secured loan instead of selling coins before the one-year period expires. The price is interest and a liquidation risk, which we come to shortly.

What the contract has to deliver

Attribution under section 39 of the Fiscal Code does not apply automatically because a provider calls its product a loan. What matters is whether a genuine security arrangement exists: with a claim to the return of the same quantity of the same crypto assets, with a clearly defined liquidation event, and without a free right of disposal for the lender over your coins in day-to-day operation. Read your terms and conditions closely on those three points and keep a copy of the version that applied when the loan was signed.

Security transfer or right of use: how a Bitcoin-backed loan differs from crypto lending

Some providers allow the lender to on-lend the pledged coins, putting them to work to generate a return. In tax terms that moves the arrangement close to lending, the transfer of crypto assets for a limited period in exchange for a fee. For lending held as private assets the legal position is settled: margin number 65 of the circular assigns the income to section 22 number 3 of the Income Tax Act, because granting the use of an asset for a period is a service rendered by the taxpayer.

What matters just as much is what does not follow from that. Even with lending, the tax authorities treat the handing over of coins as a transfer for a period rather than a sale. What is taxed is the fee you receive, not the holdings you transferred. For you as a borrower that means a great deal speaks for the view that posting collateral does not trigger a sale, even in the variant that permits on-lending. The picture changes if the lender pays you a fee for the use of your coins, because you then hold a separate source of income under section 22 number 3 alongside the loan, and that belongs on your tax return.

What the March 6, 2025 ministry circular covers on collateral, and what it does not

The Federal Ministry of Finance circular with the reference IV C 1 - S 2256/00042/064/043 runs to 34 pages and is the authoritative administrative guidance on crypto assets in Germany. It replaces the earlier version of May 10, 2022 and deals with mining, staking, lending, hard forks, airdrops, the order in which holdings are deemed used, and, since the rewrite, the duties to cooperate and keep records.

On the use of crypto assets as loan collateral it contains not a single paragraph. We searched the full text for the term on September 16, 2026: the German word for security appears once in the entire document, in margin number 92 on the estimation of tax bases under section 162 of the Fiscal Code. That passage has nothing to do with borrowing against Bitcoin.

You have to plan around that gap. While Austria now offers its investors comparatively detailed statements on the subject, German practice works from general principles: section 39 of the Fiscal Code for attribution, section 23 of the Income Tax Act for the holding period, and margin numbers 53 to 63 of the circular for calculating the gain. Anyone looking for an explicit administrative statement on crypto-backed loans will not find one at present. For larger amounts, a binding ruling from the tax office under section 89(2) of the Fiscal Code is therefore the cleaner route than a forum post.

Forced liquidation: why selling the collateral triggers a taxable disposal

The real tax event in a Bitcoin-backed loan arises when the price falls and the lender liquidates the collateral. In legal terms the security turns into money at that moment: the coins are transferred to a third party for consideration, which is precisely the transaction margin number 54 of the circular describes as a disposal. The fact that you did not want the liquidation and did not consent to it makes no difference. Section 23 of the Income Tax Act looks at the economic transaction, not at whether it was voluntary.

The decisive date is the day of liquidation. If no more than one year has passed between your original acquisition and that day, the gain is taxable. If the purchase lies further back, the liquidation stays tax free, however painful it is in economic terms. That is why liquidation risk on recently bought coins cuts twice: you lose the position, and you pay income tax on the paper gain even though all you are left with is the loan amount.

How close a liquidation sits depends on the loan-to-value ratio. For our overview of the liquidation thresholds at eleven providers we pulled the published terms on September 8, 2026 and worked out the price at which each lender steps in. Once you know that threshold, you can set it against your own acquisition date and see immediately whether a liquidation would fall inside the holding period.

Worked example: how to calculate the gain on liquidated Bitcoin collateral

Margin number 57 of the circular sets the formula: disposal proceeds less acquisition costs less deductible expenses. An example with round numbers, deliberately simplified:

• In February you buy 0.5 BTC for a total of 40,000 euros.
• In June you post those 0.5 BTC as collateral and take out a loan of 20,000 euros. Nothing happens for tax purposes.
• In October the price falls, the lender liquidates the collateral and realises 46,000 euros. The transaction fee is 200 euros.

The taxable gain is 46,000 euros minus 40,000 euros minus 200 euros, so 5,800 euros. Because less than a year lies between February and October, that amount is taxed at your personal income tax rate. It arises even though you never wanted to sell the coins and even though the price has fallen. What you hold in your hand is the loan, and the liquidation has repaid it.

Two levers soften the result. First, the de minimis limit under section 23(3) sentence 5 of the Income Tax Act applies: if your total gain from all private disposal transactions in a calendar year stays below 1,000 euros, it is tax free. For assessment periods up to 2023 the limit was 600 euros. This is an exemption limit rather than an allowance, so one euro above it makes the entire gain taxable. Second, you may offset losses from other private disposal transactions in the same year. Section 23(3) sentence 7 restricts that offset to gains from the same category of income, which means a crypto loss cannot be set against gains on shares in Germany, as those fall under section 20.

Holding period and FIFO: which coins the lender disposes of for tax purposes

If you bought Bitcoin at different points in time, the order in which holdings are deemed used decides whether the liquidated coins were still inside the period. Margin number 61 of the circular puts the principle of individual identification first: anyone able to prove which specific units were transferred calculates with those. Only where that is impossible are the crypto assets acquired first deemed to be the ones disposed of, the familiar first-in-first-out method.

Margin number 62 adds a rule that is often overlooked in practice: the assessment is made per wallet. Once chosen, the method must be retained within a wallet until all coins of that trading designation there have been disposed of. For a Bitcoin-backed loan this matters directly, because you almost always fund the collateral from a dedicated address. The wallet you post the security from therefore influences which acquisition dates apply if the collateral is liquidated.

In practice that means posting collateral from holdings that have already passed the one-year mark wherever you can. Even a forced liquidation then stays tax free. A tax tool with portfolio tracking helps here, because it keeps acquisition dates per wallet and shows you which tranche leaves the holding period and when.

No ten-year rule: why a Bitcoin-backed loan does not extend the holding period

One of the most persistent misconceptions concerns section 23(1) sentence 1 number 2 sentence 4 of the Income Tax Act. That provision extends the holding period to ten years where income is generated from the use of an asset in at least one calendar year. On that logic, anyone who borrows against their coins or lends them out would have to wait ten years before a sale became tax free.

The tax authorities take a different view. Under the heading stating that the holding period is not extended to ten years, margin number 63 of the circular says in a single sentence that the provision does not apply to currency or payment tokens. Bitcoin falls into that category. For you that means posting collateral, running a lending position or earning staking rewards does not extend your holding period. It stays at one year.

The earlier 2022 version already said as much, and the rewrite of March 6, 2025 carried it over unchanged. Even so, do not rely on older guides that still claim a ten-year period. When in doubt, check the margin number itself; it sits on page 21 of the circular.

Loan interest, transaction fees and deductible expenses under section 23 of the Income Tax Act

Deductible expenses reduce the taxable gain. Margin number 57 of the circular does require them to be allocated between taxable and non-taxable disposals, and margin number 59 names only one item explicitly: the transaction fees incurred in connection with the disposal. In a liquidation that covers the network fee for the transfer and the fee the lender charges for selling the collateral.

On loan interest the circular says nothing. That is awkward, because under general principles interest on debt is deductible only where it relates directly to the disposal transaction. Where you used the loan proceeds to buy a house, to fund consumption or for another investment, that connection is usually absent. Anyone who still wants to claim the interest should be able to document the use of the loan amount without gaps and settle the question with a tax adviser before the return goes out.

Stablecoin payouts: when the loan proceeds themselves become a taxable swap

Many providers pay the loan out in a stablecoin rather than in euros. A stablecoin is a crypto asset whose price is pegged to a currency. That leaves you holding a second crypto asset, and the same rules apply to it. The inflow is an acquisition, valued at the market price at the time you receive it. If you then swap the stablecoins into euros, margin number 54 treats that as a disposal.

In most cases almost nothing sticks, because only hours pass between receipt and swap. The result is zero on paper only if the price has not moved. A stablecoin pegged to the US dollar fluctuates against the euro with the exchange rate, and over several weeks that can add up to noticeable amounts. The same applies to repayment: if you buy stablecoins to repay the loan and a price gain arises between purchase and repayment, that gain also belongs in the section 23 calculation. Record the time, quantity and euro price for every stablecoin transaction.

Which records you need to keep for the loan and the liquidation

The rewritten circular set out the duties to cooperate and keep records in detail for the first time, and margin number 92 contains a sentence worth taking seriously: if the tax authority cannot establish the tax bases, it estimates them under section 162 of the Fiscal Code. That applies expressly where information is missing or insufficiently clarified. The circular does at least state that an estimate must not serve to penalise taxpayers, and that documents submitted have to be taken into account.

The documents that count in a liquidation

• The purchase receipt for the coins later pledged, with date, quantity and euro value, because it determines the acquisition costs and the holding period.
• The loan agreement together with the terms in force at signing, in particular on the return claim and the right of liquidation.
• The account statement or the provider transaction overview for the liquidation date, showing proceeds, timing and fees withheld.
• The transaction IDs for the transfer to the collateral address and for the later liquidation, so the chain stays traceable on the blockchain.
• Evidence of the wallet the collateral was posted from, because the order of use has to be assessed per wallet.

One point deserves particular attention. Many tax reports automatically book an outflow to an external address as a sale. If your report treats the posting of collateral that way, it shows a gain that does not exist under section 39 of the Fiscal Code. Check that entry and correct it with a note on the transaction before you take the figures over. In the other direction, the later liquidation must not get lost, because that is the transaction which actually counts.

Bitcoin-backed loans: what to take away

1. Check which holdings you post the collateral from before you sign the loan. Coins that have passed the one-year mark keep even a forced liquidation tax free. Which providers allow which loan-to-value ratios is set out in our comparison of crypto lending platforms.
2. Document acquisition, collateralisation and liquidation separately. Posting collateral is not a sale, liquidating it is, and a tax report does not draw that line on its own. A tool from our comparison of crypto tax software carries the acquisition dates through per wallet.
3. Set the liquidation threshold against your acquisition date. Where the threshold falls inside the one-year period, a planned partial sale is often cheaper than a forced liquidation. Venues and terms for that are covered in our overview of how to sell Bitcoin.

Sources and legal basis

The statements in this article rest on the Federal Ministry of Finance circular of March 6, 2025 on individual questions of the income tax treatment of certain crypto assets and on the wording of section 39 of the German Fiscal Code. The rules on the one-year period, the de minimis limit and loss offsetting follow from section 23 of the Income Tax Act.

(As of September 16, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)

$XRP is having the kind of day that makes traders close the app and go for a walk. Ripple's token has slid below $1.30 and is down roughly 8% to 9% over 24 hours, the worst performance in the entire top ten. Bitcoin lost about 1.4% in the same window. Ethereum lost around 3%. XRP lost six times what Bitcoin did.

That gap is the whole story. This was not a crypto-wide flush that happened to catch XRP. This was a regulatory event, and XRP was standing closest to the blast radius.

Why Did the XRP Price Crash Today?

Two things hit within 24 hours of each other, and both of them are American.

The first was Tuesday's Senate vote on the CLARITY Act. The second is the Federal Reserve, which announces its rate decision this afternoon with a hike widely expected. $XRP is unusually sensitive to both, and it got them back to back.

The mechanical damage came from leverage. Crypto exchanges liquidated roughly $571 million in long positions over the 24 hours following the vote. Bitcoin and Ether longs absorbed around $190 million each, XRP longs around $30 million, and Solana longs roughly $22 million. Traders had been positioned for the bill to pass. Bitcoin had pushed toward $80,000 earlier in the week on exactly that assumption.

When the assumption broke, the positions broke with it.

What Happened With the CLARITY Act Vote?

The Senate failed to invoke cloture on the motion to proceed to H.R. 3633 on Tuesday afternoon. The official floor tally was 49 yeas to 50 nays. That is not just short of the 60 votes needed, it is short of a simple majority.

Worth being precise here, because a lot of coverage will blur it: this was a procedural vote to begin formal debate, not a vote on the bill itself. A win would only have opened the floor to amendments, with a separate passage vote still ahead. Losing it means the chamber never opens that debate at all.

The bill died on the fight that had stalled it for months. Democrats wanted an enforceable ban on the president and senior officials profiting from crypto while writing its rules, a demand that hardened after President Trump disclosed more than $1.4 billion in crypto income for 2025. Republicans released a finalized 630-page text on September 14 containing 126 Democratic-requested changes, including ethics language enforceable by state attorneys general. It was not enough. Senator Elizabeth Warren, ranking Democrat on the Banking Committee, led the opposition and dismissed the revised ethics provision as a weak fig leaf.

Three Republicans crossed the aisle to vote no: Susan Collins of Maine, Josh Hawley of Missouri and Jerry Moran of Kansas. Several Democrats who had spent months at the negotiating table, including Gillibrand, Warner, Booker, Warnock and Gallego, also voted no.

The market repriced instantly. Polymarket odds of the CLARITY Act becoming law in 2026 collapsed to about 7%, down from 82% in February. Ripple CEO Brad Garlinghouse, who had spent the better part of a year publicly handicapping the bill's chances at 80% or better, summed it up in three words: "This one stings."

Given the compressed calendar before the November midterms, this effectively ends US crypto market structure legislation for 2026.

Why Is the Fed Rate Hike Making the XRP Crash Worse?

Bad timing does not begin to cover it.

The Fed announces at 2 p.m. ET today, September 16, and futures traders are pricing roughly a 90% chance of a 25 basis point increase, which would lift the target range to 3.75% to 4.00%. That would be the first Fed hike since 2023, under new Chair Kevin Warsh, who spent his Jackson Hole debut making it very clear that inflation is his predominant focus.

Rate hikes are structurally hostile to crypto. Higher yields mean investors get a guaranteed return from government bonds without absorbing crypto's volatility. Treasury yields and the dollar have both risen as investors brace for tighter policy.

Here is the subtlety that matters for traders: because a hike is so heavily priced in, the decision itself is unlikely to be the story. The vote count, the updated dot plot and Warsh's tone in the press conference thirty minutes later are what actually move the dollar and risk assets. A hawkish dot plot pointing to more hikes in 2027 would be considerably worse for XRP than the hike itself.

Why Did XRP Fall Harder Than Bitcoin, Ethereum and Solana?

Look at the damage across the top of the market:

XRP is the worst 24-hour performer and the worst year-to-date performer on this list by a wide margin. BNB, notably, barely moved at all, which tells you something: BNB has almost no exposure to US legislative outcomes.

The reason XRP moved the most is that XRP had the most riding on the vote. The CLARITY Act named XRP among 16 tokens that would have been classified as digital commodities, moving them under CFTC spot-market rules rather than the SEC's. For an asset whose entire price history is scarred by a five-year securities fight with the SEC, permanent statutory classification was not a nice-to-have. It was the last box to check.

Bitcoin's regulatory status was never in question. XRP's was, and the bill that would have settled it just died.

Why Is Ripple So Closely Tied to US Macro and Policy News?

Ripple is arguably the most Washington-dependent company in crypto, and XRP trades like it.

Ripple's core business is cross-border payments for regulated financial institutions. Banks do not integrate settlement rails that sit in legal grey zones. Every piece of Ripple's growth story, from institutional adoption of the XRP Ledger to the RLUSD stablecoin to its pursuit of a US banking license, runs through American regulators.

Ripple has also leaned into that dependency. Garlinghouse took a seat on the CFTC's Innovation Advisory Committee, publicly backed Trump's push to get the bill passed, and made the CLARITY Act a recurring theme in nearly every interview he gave this year. When you tie your narrative that tightly to a single piece of legislation, you inherit the downside when it fails.

There is a second channel, too. US spot XRP ETFs now exist, and they transmit American macro sentiment directly into XRP's order book. Those funds recorded $60 million in net inflows in one week earlier this month, their best weekly showing of 2026. That bid can reverse just as fast. Spot Bitcoin ETFs shed $450 million after the Senate vote, the heaviest single-day outflow since June.

Institutional money is not an unconditional buyer. It is a buyer that reads the Federal Register.

XRP Price Prediction: What Are the Downside Targets?

Honest framing first: nobody can separate from a chart how much of this 8% to 9% drop is CLARITY Act, how much is Fed positioning and how much is generic risk-off. All three are live simultaneously. What follows are levels traders are watching, not forecasts.

The $1.26 to $1.28 structural range that held through March and April has already been broken, and XRP is now trading right at it.

• Immediate support: $1.10. This is the level most cited as the next real test. From roughly $1.28, a move there is another 14% down.
• On-chain support: $1.06. Over 830 million tokens changed hands at this level, meaning a large cohort of buyers has cost basis here and tends to defend it.
• Deeper bear case: $0.87 to $0.80. The $0.80 zone saw 923 million tokens transacted. Reaching $0.87 would require a further decline of around 31% from current prices.
• Cycle floor scenario: $0.70 to $0.62. The 2-week Gaussian Channel lower band, which caught the bottom of every XRP bear market since 2017, currently sits between $0.70 and $0.90. The $0.62 level had 1.16 billion tokens transacted.

A weekly close below $1.06 is the line that shifts the conversation from correction to cycle-bottom hunting.

XRP Price Prediction: What Are the Upside Targets?

The recovery path is narrower than the downside path, and it has a ceiling problem.

• First reclaim: $1.38 to $1.45. XRP needs to close back above this zone to stop the bleeding. Until it does, every bounce is a lower high.
• Next resistance: $1.50 to $1.60. This was the pre-vote target if the bill had advanced. It is now overhead supply instead.
• Major resistance: $1.67 to $1.81. The first genuine trend-change confirmation. Reclaiming $1.67 is what would put the bullish 2026 case back on the table.
• The supply wall at $2.00. Roughly 75% of XRP's realized cap sits at a loss near the $2 level. That is an enormous band of underwater holders who become sellers into any rally that reaches them.

For context on scale, base-case models put XRP between $1.36 and $1.93 by the end of 2026, with a midpoint near $1.60. That would be a recovery, not a new cycle.

What Should XRP Holders Watch Next?

Three things, in order of how fast they matter.

1. Today at 2 p.m. ET. Not the hike, which is priced. The dot plot and Warsh's press conference. A signal of further tightening into 2027 pressures every risk asset including XRP.
2. XRP ETF flow data this week. The institutional bid was the one genuinely constructive thing in XRP's chart. If those flows go negative and stay negative, the $1.10 test comes quickly.
3. The regulators, not Congress. With the bill dead, attention shifts to the SEC and CFTC, both of which are already writing crypto rules independently. Grayscale called the vote not the outcome it hoped for while pointing to exactly that ongoing regulatory work. It is slower and less durable than legislation, but it is not nothing. Some Republicans, including Senator Thom Tillis, still think the bill has life in it.

One more note on the calendar. The Senate's state work period begins in October and campaign season follows. With Congress likely under split control next year, the realistic next window for market structure legislation is 2027 at the earliest.

XRP spent 2026 pricing in a law that is not coming. It is now in the process of pricing that out.

Whether you can get your coins out of a provider depends neither on your balance nor on customer support, but on a technical question: does the provider offer a payout to an address you own yourself at all? cryptoticker.io checked this on September 16, 2026, for ten providers available in Germany. Seven of them have that route. Three do not, and by their own public statements this is not a temporary state of affairs.

The occasion is anything but theoretical. Within a few weeks two trading venues are winding down, and in both cases the clock is running for balances still sitting on the platform. Anyone who only realises at such a moment that their provider cannot release coins at all is left with nothing but a sale. For tax purposes that is something entirely different from a transfer, and it happens at whatever price prevails at the time. For Bitcoin that meant a level around 77,000 US dollars this week, well below the highs of the year.

Two exchanges are winding down: why the withdrawal question matters now

On September 15, 2026, the exchange CoinEx announced its own retreat and published a phased plan: no more new registrations, margin, lending, staking and the Earn products disappear from September 22, spot trading ends on September 29, and the withdrawal channel closes on December 22, 2026. Whatever remains after that moves, according to the exchange, into separate custody with a monthly fee. cryptoticker.io recorded the phases and the currencies affected in a measurement of its own on September 15, 2026.

The wind-down of BitMEX is running in parallel. Trading there ends on September 23, 2026; cryptoticker.io documented the deadlines on August 26, 2026. Two wind-downs in a single month are part of the normal picture of a market in which trading volume keeps shifting to fewer large venues. For you as an investor, one very concrete piece of homework follows: you need to know whether your own provider has an exit for coins if it comes to that.

The question is independent of whether your provider is reputable. All three providers that lack the route are regulated in Germany and have been operating for years. These firms have simply built their product so that the coins never leave the house.

Payout to your own wallet: what the term means technically

A crypto payout to your own wallet is an on-chain transaction in which your provider transfers coins out of its custody to a blockchain address whose private key you hold yourself. After that, your balance sits on your address in the network rather than in the provider's database.

Three things have to be distinguished from that, and marketing likes to make them sound similar. A euro payout to your bank account is a sale, not a transfer. An internal transfer between two accounts on the same platform never touches the blockchain. And a crypto security merely tracks the price; there is no coin behind it that you could receive.

Why this matters only ever becomes clear in the exceptional case: in a wind-down, in a frozen withdrawal, in a dispute over identity verification. Anyone holding their coins on an address of their own is unaffected by such events, but carries full responsibility for securing their keys. Which devices are up to the job and what they cost is set out in our hardware wallet comparison. Both routes have their price, and the honest answer is that the choice depends on the amount and on your willingness to keep a recovery phrase safe for years.

Method: how we checked ten providers on September 16, 2026

A single question was examined: does the provider name, on a publicly accessible page, a way to pay out crypto assets to an address you control yourself? For this we retrieved the product, fee and help pages of ten providers aimed at customers in Germany between 09:50 and 10:15 UTC on September 16, 2026, and logged every retrieval with its HTTP status code.

The ten providers: Trade Republic, BISON, Bitpanda, Kraken, Bitvavo, Coinbase, Revolut, Scalable Capital, justTRADE and N26 Krypto. Five of them served a page that answers the question in plain terms (HTTP 200). Four help centres rejected the automated retrieval with HTTP 403, although the pages are perfectly readable in a browser; there we cross-checked the content via search and flagged it in the text. At Trade Republic the product page did respond with HTTP 200, but the content is only loaded in the browser, so there we rely on reporting from several trade publications.

cryptoticker.io compiled this survey itself on September 16, 2026. The survey is a snapshot of public statements, not a test from inside a real account: we triggered no payout, timed no processing, and measured no fee at the checkout.

Three providers with no withdrawal route: Scalable Capital, justTRADE and N26 Krypto

At these three providers, no route leads from the platform to a blockchain address of your own:

• Scalable Capital: the broker's FAQ answers the question with a direct no. The reason lies in the product form, namely exchange-traded crypto securities instead of coins.
• justTRADE: the provider trades genuine crypto assets but explicitly excludes both inbound and outbound delivery.
• N26 Krypto: the product page names buying, selling and swapping more than 300 coins as well as custody by a partner. There is no mention there of a transfer to an external address.

This is no reproach to these firms. Anyone holding crypto purely as an admixture in a portfolio, with no intention of ever transferring, loses nothing through this design and is spared the pitfalls of self-custody. Anyone who assumes they can simply withdraw when it matters, on the other hand, is labouring under a misunderstanding.

Crypto ETP instead of coin: why Scalable Capital provides no wallet address

The broker's help page is unambiguous on this point. It states word for word that a direct payout of cryptocurrencies to a private wallet is technically not possible through the Scalable broker. The page gives the product form as the reason: what is traded are exchange-traded crypto securities, so-called crypto ETPs, and not the coins themselves. A wallet of your own is simply not part of this design.

A crypto ETP is an exchange-traded security that tracks the price of a cryptocurrency and is as a rule physically backed by coins held at the issuer. Some issuers permit a physical delivery of the backing coins in their product terms. That, however, is an application to the issuer with its own documentation, its own fees and extended identity checks, not a button in the broker app.

The product form also has a tax flip side that many overlook: a crypto ETP is a security, and gains on it run through the flat withholding tax, whereas a coin held directly in private assets remains tax-free after a one-year holding period. Anyone mixing the two should keep the portfolios cleanly separated.

Pooled custody at justTRADE: physical coins with no delivery in or out

justTRADE is the more interesting case, because here genuine coins really are bought. According to the provider, 73 physical crypto assets are tradable, custody is handled by Tangany GmbH of Munich in a pooled wallet, and trading runs as a commission business through a partner bank. Even so, the provider's FAQ states that delivery of crypto assets in and out is as a matter of principle not possible, and for the other direction, that transferring crypto assets to justTRADE is not possible.

Pooled custody means the coins of all customers sit bundled on a few addresses belonging to the custodian, while your claim is recorded in its books. Legally that is a claim for delivery against the custodian; technically you are visible in no block of the chain. For everyday purposes that makes no difference. For the exceptional case it does, because your claim is only as solid as the books and the supervision behind them.

The second half of the statement is the remarkable one: inbound delivery is ruled out as well. Anyone wanting to bring coins there from a wallet of their own in order to sell them more cheaply cannot do so. The platform is a closed circuit in which euros flow in and out again, but coins do not.

N26 Krypto: buying and selling in the banking app, keys held by the partner

Crypto trading in the N26 app is provided by Bitpanda Asset Management GmbH, which is licensed for it by BaFin. On the German product page the bank advertises more than 300 coins that can be bought, sold or swapped. On custody, the page states that the partner holds the balances in cold storage and manages the private keys. A function for sending to an external address does not appear on the page.

Caution is called for here, and we say so explicitly: the absence of a mention is not proof of the absence of the function. All that is solid at this point is that the public product page described no payout route to an address of your own on September 16, 2026. Anyone holding balances there and planning a transfer should ask support before the next purchase and get the answer in writing.

The same pattern shows up across bank offerings generally. On September 12, 2026, cryptoticker.io described how the crypto offering of the Sparkassen provides no key of your own; at the Volksbanken the picture looks similar according to our survey of September 13, 2026. The banking model deliberately sells convenience and familiarity, not self-custody.

Seven providers with a withdrawal route: from Trade Republic to Revolut

At the remaining seven providers the exit exists, in varying breadth:

• Trade Republic activated its crypto wallet on November 14, 2025. According to the consistent reporting of several trade publications, more than 50 cryptocurrencies can be sent and received since then with no platform fee of its own; only the network fee of the respective blockchain applies. Custody sits with a regulated custodian.
• BISON describes deposits and withdrawals on its own website and states that they are free of charge. The condition is stated there as well: the destination may only be an address of which you are the beneficial owner.
• Kraken maintains a help page of its own with minimum amounts and withdrawal fees per coin and network. Its note that the final fee is only fixed at confirmation is typical of exchanges with many chains.
• Bitpanda, Bitvavo, Coinbase and Revolut reject automated retrieval of their help centres (HTTP 403). The help articles of these four providers on sending to external addresses exist and are readable in a browser; we cross-checked their content via search. At Revolut the payout is expressly limited to certain coins and networks.

Anyone choosing between these firms should treat the withdrawal function as a criterion in its own right, not as a given that will be written somewhere in the small print. Which venues are available in Germany and how fees, spreads and selection differ is shown in our exchange comparison.

Minimum amount, network and fee: what makes a crypto payout fail in practice

The existence of an exit does not yet mean it fits your holdings. Three hurdles keep cropping up in practice, and all three can be checked beforehand.

The first is the minimum amount. Almost every exchange sets, per coin, the quantity below which it will not pay out at all. If your residual balance falls below it, the balance stays put even when the button is visible. That hits small positions above all, the odds and ends left over after years of a savings plan.

The second is the choice of network. Many tokens run on several chains, and the fee differs considerably between the main network and layer 2. Choose the wrong chain and you either pay unnecessarily much or send your balance to an address that cannot serve the format at all. A small test payout costs a few cents and settles the question for good.

The third is the form of the fee. Some providers pass on only the network fee, others set a fixed amount per coin that looks cheap when the network is busy and expensive when it is quiet. On a residual balance in the double-digit euro range, that difference decides whether the transfer is worth making at all.

Proof of ownership from 1,000 euros: what the Transfer of Funds Regulation requires of you

Since the European Transfer of Funds Regulation took full effect, the checking does not stop at the provider. From a value of 1,000 euros your provider must establish that the destination address genuinely belongs to you before executing a payout to a self-hosted wallet. cryptoticker.io described the permissible methods and the procedure in detail on August 19, 2026.

In practice that means: do not plan your first transfer for the evening the deadline expires. Depending on the provider, the proof runs through a signed message, through a small test transfer, or through a verification in the app. Each of these routes takes time, and each can get stuck on some small thing, such as a wallet that does not offer message signing at all.

The same regulation also explains why providers such as BISON expressly permit payouts only to your own addresses. A transfer to another person's wallet is not a technical problem but a regulatory one.

Is a transfer to your own wallet a taxable sale?

No. When you move coins from your account at a provider to an address whose key you hold yourself, the beneficial owner does not change. There is no disposal transaction, the one-year holding period keeps running, and the acquisition date remains that of the original purchase.

Two points deserve attention nonetheless. First, you need complete documentation: after a transfer, tax software sees two holdings if you do not link the addresses cleanly, and a relocation becomes a purchase without provenance on paper. Second, a forced conversion in a wind-down is a different matter from a voluntary transfer. If an exchange converts your balance into a stablecoin before closing, that is a swap and therefore a transaction with tax consequences, even though you did not trigger it.

That is precisely why it pays to make the transfer voluntarily and early rather than under the pressure of a deadline. Anyone whose holdings are spread across several providers should also keep a tool that holds addresses and accounts together.

Limits of the survey: what this snapshot does not show

Our check answers a binary question and nothing else. The survey does not say how quickly a payout is actually executed, whether a provider holds it up in an individual case pending a review, how high the fee turns out to be in the end, or which coins are excluded from the function. At most providers, those details appear only in the logged-in area or directly in the confirmation dialogue.

It also remains open whether the three providers without an exit will change their design in future. Trade Republic took exactly that step in November 2025, and several firms have retrofitted transfer functions once the regulatory requirements were settled. A no today is therefore no permanent no, and every one of these details can change without notice.

And finally: four of the ten help centres rejected our retrieval. That a page is blocked to automated access says nothing about its accuracy; it merely makes checking more laborious. We flagged those four cases rather than presenting them as verified.

Checking your crypto payout: what to take away

1. Ask the question before you buy. Search your provider's help centre for "withdrawal", "send" or "external wallet". If you find no clear answer there, ask support and have the information given to you in writing. Where the option exists at all is shown in our overview of crypto exchanges.
2. Make a test payout while there is no pressure. A small amount to an address of your own answers in ten minutes what every FAQ leaves open: minimum amount, choice of network, duration and proof of ownership. Where the transfer should go is settled by our hardware wallet comparison.
3. Document every transfer immediately. Address, date, quantity and fee belong in the same record as your purchases, or a tax-free relocation later becomes a gap in the chain of provenance. Suitable tools are listed among the crypto tax tools.

Sources for this survey, each retrieved on September 16, 2026: the Scalable Capital FAQ on payouts to a private wallet and the justTRADE information page on crypto trading.

(As of September 16, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)

A crypto loss carryforward is the part of your losses from crypto sales that the tax office has formally assessed at year-end because it could not be offset in the same year. It does not sit in your account or in your app but in a notice of its own, and it can only be set against one very particular kind of gain. If you have realised losses during the current year, you should therefore keep two things apart: how much loss arose, and what that loss may actually be set against later.

The question is gaining weight right now. In September 2026 the Federal Ministry of Finance circulated a draft bill that would assign gains from crypto assets to income from capital assets from 2027 onwards and tax them at a flat 25 percent. Existing holdings are to remain under the current system. It is precisely at that seam that the fate of an assessed loss carryforward is decided: whether it still finds a counterpart. The market provides the occasion: Bitcoin traded at 75,887 US dollars at around 07:00 UTC on September 16, 2026, roughly 1.7 percent below the previous day (source: CoinGecko price query, retrieved by us).

Crypto loss carryforward: what the term in your tax notice means

In Germany, gains and losses from selling crypto assets within a year of purchase fall under private disposal transactions in section 23 of the Income Tax Act. In its judgment of February 14, 2023 (case number IX R 3/22), the Federal Fiscal Court confirmed that Bitcoin, Ether and Monero are other economic assets within the meaning of that provision. The same logic therefore applies to them as to gold, collectibles or foreign currency balances.

A private disposal transaction is a sale in which no more than one year lies between acquisition and disposal. A loss carryforward is the amount of unrelieved negative income that the tax office assesses separately as at December 31 of a year so that it can still be used in later years. Together, the two produce the situation at issue here: you can hold a loss that exists for tax purposes without it doing anything for you the following year.

Why the carryforward does not arise automatically

The assessment does not happen by itself. It requires the losses to have been declared in your tax return, as a rule in Annex SO. Anyone who did not report their sales at all, because the bottom line was negative anyway, frequently has no assessed carryforward either. If you never declared your sales, you can make that good through Annex SO for the year in question, provided the year is still open under procedural rules.

Section 23 ITA: why crypto losses land in a ring-fenced pot

The decisive sentence sits in section 23(3) sentence 7 of the Income Tax Act and is short: losses may only be offset up to the amount of the gain the taxpayer realised in the same calendar year from private disposal transactions. In the same sentence, the statute explicitly rules out the general loss deduction under section 10d. Sentence 8 then opens a narrow door: the losses reduce the income you realise from private disposal transactions in the immediately preceding or in subsequent assessment periods.

In practice that means a crypto loss from 2026 may be carried back against a crypto gain from 2025 or carried forward against gains from 2027 and later, as long as those gains are also private disposal transactions. It does not run against your salary, your rental income or your dividends. This is not an innovation of crypto taxation but the basic mechanics of this category of income, and they have applied unchanged for decades.

The second pot sits in section 20(6) of the Income Tax Act and works as a mirror image. Losses from capital assets may not be offset against income from other categories; they only reduce income you realise from capital assets in subsequent assessment periods. Within that pot there are narrower compartments still, such as the familiar special pot for share disposals. There is no connection between the section 23 pot and the section 20 pot.

Checking your tax notice: where the remaining loss carryforward is shown

The assessment follows section 10d(4) of the Income Tax Act: the loss carryforward remaining at the end of an assessment period is to be assessed separately, by the tax office responsible for the taxation. In practice you receive a notice of its own for this, headed with the separate assessment of the remaining loss carryforward, or a corresponding section in your income tax notice.

What to look for when you check:

• Is an amount shown for losses from private disposal transactions, and does it match your own calculation?
• Is the assessment year the year in which you realised the losses?
• Is there a second assessment alongside it for losses from capital assets, from shares or certificates for instance? These two amounts do not belong together and must not be added up.
• Has the tax office cut amounts or applied different figures? Then the one-month objection period runs from notification.

Anyone who would rather not assemble the figures by hand usually works with a portfolio or tax tool that sorts disposals by holding period and maps the acquisition sequence. Which programs cover the German rules and what they cost is set out in our comparison of crypto tax tools and portfolio trackers. What matters in every case is reconciling with the notice: the tool calculates, the tax office assesses.

The 1,000 euro exemption limit: how it changes loss relief in the current year

Section 23(3) sentence 5 of the Income Tax Act provides that gains remain tax-free if the total gain realised from private disposal transactions in the calendar year came to less than 1,000 euros. The figure used to be 600 euros; the higher threshold has applied since the 2024 assessment period. It is an exemption limit and not an allowance: exceed it and the entire gain is taxable, not merely the excess.

For the loss side, what matters is that the exemption limit applies to the total gain for the year. If you realise gains and losses in the same year, you offset within the year first; only the result is measured against the threshold. A small gain pushed below the threshold by losses therefore stays tax-free, but it consumes the losses used. That is the point at which realising a loss shortly before year-end becomes an arithmetic exercise: the loss is spent and the tax saving is zero, because no tax would have fallen due on the gain in any case.

Flat withholding tax from 2027: what the draft bill proposes for crypto assets

The Federal Ministry of Finance's draft bill from September 2026 proposes to assign gains from crypto assets to income from capital assets irrespective of the holding period and to charge them at the special rate of 25 percent. Together with the solidarity surcharge that works out at 26.375 percent, with church tax on top where applicable. Income from lending and staking would also be treated as investment income under the draft.

A draft bill is a working document of the ministry. It passes through coordination within the federal government, then goes to the Bundesrat as a government bill, and only after that to the Bundestag. At the time of writing, no bill on this question is before the Bundestag. Everything set out here about the period after December 31, 2026, therefore describes a planned position and not the law in force.

What matters in the draft for holders of losses

There are two points. First, the assignment to section 20 ITA moves future gains into the capital assets pot, where an old section 23 carryforward achieves nothing. Second, under the draft the switch would apply only to crypto assets acquired after the cut-off date. Together, those two points determine how large your future counterpart still is.

Grandfathering at December 31, 2026: which coins stay in which system

Under the draft, the new rules would cover only crypto assets acquired after December 31, 2026. Whatever you bought before that would remain in the current system with its one-year holding period, and thus within the scope of section 23 ITA. That produces a situation many investors underestimate: from 2027, two groups of coins could sit side by side in your portfolio, treated under different tax rules, with their gains landing in different offset pots.

For the allocation, what counts is the acquisition date of the individual unit, not the date you opened the account. Anyone buying regularly, through a savings plan for example, accumulates tranches from both worlds across the turn of the year. How the cut-off date affects new purchases is covered in detail in our article on the holding period and grandfathering.

The bottleneck for the carryforward: when the offsetting pool shrinks

Here lies the actual finding, and it is milder than the widespread shorthand suggests. An assessed loss carryforward from private disposal transactions does not expire on a cut-off date. It has no time limit and remains in place until matching gains arise. What would change under the draft is not the shelf life of the carryforward but the pool of gains it can run against.

That pool shrinks more slowly than it first appears. Three sources remain:

• Existing holdings. Coins acquired before the cut-off date would stay in the old system. A sale within the one-year window still produces a gain under section 23 ITA, against which the carryforward runs.
• Other economic assets. Section 23 ITA covers more than crypto assets. Gains from selling physical gold, collectibles or foreign currency balances within the one-year window belong in the same pot.
• Real property. Gains from disposing of real estate within the ten-year window also fall under section 23 ITA.

Anyone who holds crypto assets exclusively, only buys more after the cut-off date and leaves existing holdings untouched beyond the one-year window does genuinely have a problem: hardly any gains then arise that fit the old pot, and the carryforward sits unused. It is not an expiry, it is an idle run.

Why realising gains for their own sake rarely pays

From this situation people readily derive the advice to realise gains in 2026 in order to use up the carryforward. The thought is arithmetically comprehensible and economically risky. A sale made purely for tax reasons changes your position in the market, costs fees and spread, and exposes you to the risk of having to buy back at a higher price. Whether it pays depends on your personal tax rate, the size of the carryforward and your provider's trading costs. The fee side can be checked beforehand, for instance through our comparison of the best crypto exchanges.

Claiming a loss assessment retrospectively: which deadlines apply to past years

Many investors never declared their losses from the years 2022 to 2025, because there was nothing to pay anyway. That carryforward then does not exist for tax purposes. Whether it can be assessed retrospectively depends on whether an assessment is still possible for the year in question. Section 10d(4) sentence 4 ITA ties the assessment to the tax bases of the income tax notice, and whether a notice can still be amended is governed by the Fiscal Code.

Put simply: as long as an income tax return can still be filed for a year, or a notice is still procedurally open, an assessment comes into consideration. Where the notice has become final and can no longer be amended, it is generally ruled out. This classification turns on the individual case, particularly on provisional clauses and on whether there was an obligation to file. It belongs in the hands of a tax adviser, and this article does not replace that.

One point matters on the evidence side: without solid records of the acquisition date, acquisition cost and disposal price, making a loss plausible becomes difficult. With worthless or delisted tokens there is the further problem that, as a rule, no loss arises under section 23 ITA without a disposal event. A token that has merely fallen in value and is still sitting in your wallet produces nothing at all for tax purposes.

Lending and staking: why this income sits in a third pot

Income from lending and staking is not a disposal gain. Under the law in force it is regularly captured as other income under section 22 no. 3 ITA and charged at your personal tax rate. On January 26, 2026, the Cologne Tax Court ruled that income from Bitcoin lending is not subject to the flat withholding tax but to the often higher personal rate; the classification is therefore not conclusively settled, and objections against such notices are a topic we took up in our article on the taxation of lending.

For your loss carryforward the consequence is this: a loss from a crypto sale does not reduce your lending income. That income sits in a different category. Should the draft bill become law in this form, lending and staking would move into investment income in future, leaving them just as far out of reach for the old carryforward as future disposal gains from new purchases.

Three figures you need for your own calculation

Before you decide anything, you need three values, documented rather than estimated:

1. The size of your assessed carryforward from the most recent assessment notice, split between private disposal transactions and capital assets.
2. The extent of your existing holdings, meaning which units were acquired before December 31, 2026, and how large the unrealised gains on them are.
3. The cost of realising at your provider, meaning the trading fee and spread on the amount you would move.

Without these three figures, any statement about whether a sale before the turn of the year is worthwhile is guesswork. With them it becomes a calculation that you or your tax adviser can set out in a few minutes.

Checking your crypto loss carryforward: what to take away

1. Dig out the notice and check whether a carryforward has been assessed at all. Make sure that losses from private disposal transactions and losses from capital assets are shown separately. If you lack the basis for the reconciliation, put your records in order first; the programs for that are in our comparison of crypto tax tools and portfolio trackers.
2. Sort your holdings by acquisition date. As long as the draft has not been passed, nothing changes; if the decision comes, December 31, 2026, determines which unit sits in which system. Savings plan investors should look especially closely, because there every execution is a tranche of its own with its own acquisition date; which providers document executions cleanly is set out in our comparison of Bitcoin savings plans.
3. Weigh the costs before every realisation. Fees and spread can eat up the tax advantage, especially on smaller amounts; you will find providers' terms in our comparison of the best crypto exchanges. A tax-driven transaction that does economic damage is a poor trade.

The sober summary: your loss carryforward does not run out. It only becomes worthless if you never again realise a gain that fits the same drawer. Whether that happens depends less on the legislator than on your own conduct over the coming years.

(As of September 16, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy. It is not tax advice either: legislative proposals change, so have individual tax questions clarified by a tax adviser.)

Sources: section 23 ITA and section 10d ITA as published on gesetze-im-internet.de, retrieved on September 16, 2026.

The Federal Reserve delivered the hike Wall Street had almost unanimously priced in.

Michael Selig and Paul Atkins pledged to use their agencies’ existing powers to provide crypto regulatory certainty after the Senate failed to advance the bill.

Attackers ran 108 malicious ads through the streaming service’s verified account, directing users to fake software downloads.

Meta’s CEO says competition and potential liability give AI developers reasons to prioritize safety, citing the company’s decision to delay Muse.

Bitcoin, Ethereum, and XRP ETFs shed roughly $593 million combined Tuesday, their heaviest single-day drawdown since June.

The Federal Reserve raised its benchmark interest rate by a quarter percentage point to a range of 3.75% to 4.00%.

CFTC Chair Selig urges to bypass the Senate's failed Clarity Act to launch a direct crypto regulation framework, securing the U.S. market agenda. .

That relative strength is particularly conspicuous on a day dominated by the fallout from the CLARITY Act vote.

Michael Saylor has reacted to the Senate's failure to pass the long-awaited crypto bill, calling on the SEC and CFTC to take action regardless of the Clarity Act setback.

Fresh XRP fiat corridors and Reddit stock collateral arrive on Binance as Quant exits alongside underperforming USDC pairs.

Key Highlights

• Q4 revenue reached $461.67 million, representing a 94.3% increase year-over-year, while EPS of $0.25 surpassed forecasts
• TD Cowen increased its price target to $76, suggesting potential upside of 141% from the current trading price of $31.45
• Management’s fiscal 2027 outlook projects EPS between $1.26–$1.40 and revenue of $2.4–$2.6 billion, significantly exceeding Wall Street consensus
• The company started fiscal 2027 with an unprecedented backlog approaching $3 billion, featuring initial contracts from Frontier AI Labs
• Despite strong growth, the stock’s P/E ratio exceeds 200 while net margin remains at 2.17%, prompting valuation concerns

Shares of Forgent Power Solutions (NYSE: FPS) began trading Wednesday at $31.45 following the release of impressive fourth-quarter fiscal 2026 earnings that exceeded expectations across key metrics. The company posted revenue of $461.67 million, marking a substantial 94.3% year-over-year increase. Earnings per share of $0.25 outpaced the consensus estimate of $0.24.

Forgent Power Solutions, Inc., FPS

The robust quarterly performance prompted several Wall Street analysts to revise their forecasts upward. TD Cowen elevated its price target from $73 to $76 while maintaining its “buy” recommendation, indicating potential gains exceeding 141% from present trading levels.

KeyBanc echoed this optimism, reaffirming its Overweight stance with a $60 target price. The investment firm highlighted expanding demand from data center and grid infrastructure sectors as primary catalysts supporting its bullish thesis.

Management’s fiscal 2027 outlook emerged as a standout element of the earnings report. The company forecasts EPS ranging from $1.26 to $1.40, comfortably above the Street consensus of $1.14. Similarly, projected revenue of $2.4 to $2.6 billion significantly outpaced analyst expectations of $2.1 billion.

The midpoint of the revenue projection suggests approximately 76% year-over-year growth. This ambitious forecast captured considerable attention from the investment community.

Unprecedented Order Book and Strategic Customer Additions

The company’s order backlog provided particularly encouraging signals for future performance. Forgent commenced fiscal 2027 with an order book approaching $3 billion, driven by a remarkable 53% sequential increase in new orders.

Additionally, Forgent announced its inaugural direct purchase orders and master service agreements with Frontier AI Labs alongside multiple hyperscale cloud providers. KeyBanc noted these contract wins demonstrate the company’s competitive strength in a challenging marketplace.

First-quarter fiscal 2027 revenue guidance of $445 to $465 million aligned closely with the analyst consensus of $456.7 million, indicating management expects acceleration in subsequent quarters.

The options market reflected heightened investor enthusiasm. Call option volume reached 21,324 contracts, approximately 286% above typical daily activity, signaling bullish sentiment among derivatives traders.

Stretched Valuation Presents Uncertainty

Despite positive momentum, the investment carries notable risks. FPS currently trades at a P/E multiple of 209.69, a valuation level requiring flawless operational performance.

The company’s net profit margin of 2.17% remains compressed for an equity commanding such a premium valuation. Any deviation from the aggressive growth trajectory could trigger substantial downside volatility.

Institutional ownership has been expanding. Multiple asset managers initiated positions during the second quarter, including Tidal Investments, Scholtz and Company, and WINTON GROUP.

The consensus view among Wall Street analysts leans positive. Among the 14 firms covering FPS, ten maintain buy recommendations, two rate it hold, and one has a sell rating. The mean price target stands at $57.00.

However, not all research firms share this optimism. Zacks downgraded the stock from strong buy to hold on September 8th, while Weiss Ratings moved to a sell rating in late July.

FPS has traded between $25.95 and $66.00 over the past 52 weeks, with current prices well below the annual peak. The 50-day moving average stands at $35.63, while the 200-day average sits at $40.19.

Following the earnings announcement, Oppenheimer reaffirmed its Outperform rating alongside a $60 price objective.

The post Forgent Power Solutions (FPS) Stock Surges as Analysts Hike Price Targets Following Stellar Q4 appeared first on Blockonomi.

Quick Summary

• Intel stock climbed as much as 5.5% following news of preliminary discussions with SK Hynix regarding U.S.-based chip production facilities
• Apple is working on next-generation AI server infrastructure featuring its M8 Ultra processors with possible integration of Nvidia’s NVLink Fusion connectivity
• Cryptocurrency markets took a hit after the Senate blocked the CLARITY Act from advancing, leaving Coinbase and the industry without regulatory certainty
• Mark Zuckerberg, Meta’s CEO, publicly rejected industry calls for slower AI advancement, distancing himself from positions held by leaders at Anthropic, OpenAI, and other firms
• SpaceX stock gained nearly 6% following announcement of an ambitious Starship test mission potentially scheduled for September 22

Wednesday brought significant developments across the technology and cryptocurrency sectors, with Intel, Apple, Coinbase, SpaceX, and Meta all capturing investor attention. Below is a detailed look at each major story.

Intel Stock Rallies on SK Hynix Manufacturing Discussions

Shares of [[LINK_START_0]]Intel[[LINK_END_0]] experienced a notable rally Wednesday, climbing up to 5.5% following a Reuters report detailing ongoing discussions between the chipmaker and SK Hynix about establishing U.S.-based semiconductor manufacturing operations.

According to the report, potential arrangements include SK Hynix leasing facilities at Intel’s semiconductor plant in Ohio. Another scenario under consideration involves forming a joint venture that would include Intel, SK Hynix, and major cloud computing companies seeking to diversify their memory chip sources.

Sources indicate these discussions remain preliminary, with no finalized agreements in place.

The artificial intelligence revolution has created unprecedented demand for sophisticated memory chips. Such a partnership would provide Intel with a strategic manufacturing ally while simultaneously giving SK Hynix its inaugural memory chip production footprint on U.S. soil.

Apple Explores Nvidia Partnership for AI Infrastructure

According to industry reports, Apple is developing artificial intelligence server systems built around its forthcoming M8 Ultra processors. The Cupertino-based company is reportedly evaluating Nvidia’s NVLink Fusion interconnect technology to link these chips together.

These servers would focus on AI inference operations—essentially running pre-trained artificial intelligence models. Such a move would represent Apple’s most significant entry into enterprise-grade AI infrastructure to date.

The timeline for this product extends beyond 2029, and plans could evolve or be abandoned entirely. However, if realized, the project would signal unprecedented collaboration between two technology titans.

Nvidia’s interconnect solutions are becoming increasingly critical in AI data center architecture. A formal partnership with Apple would significantly expand Nvidia’s influence in this rapidly growing market.

Senate Vote Delivers Blow to Coinbase and Cryptocurrency Sector

In a 49-50 vote, the U.S. Senate rejected a motion to advance the CLARITY Act. This legislation sought to establish definitive rules determining whether digital assets should be regulated as securities or commodities. The measure required 60 votes to proceed and fell significantly short of that threshold.

The result represents a significant disappointment for Coinbase, which has consistently advocated for regulatory clarity as essential to its long-term strategic objectives.

While the legislation could potentially be reintroduced, the current vote leaves the cryptocurrency industry facing continued regulatory ambiguity.

SpaceX Announces September 22 Target for Complex Starship Mission

SpaceX stock advanced nearly 6% after the aerospace company announced that its 14th Starship test flight could launch as early as September 22.

This mission represents the most ambitious Starship test to date. The flight profile includes achieving stable orbital insertion, completing approximately six Earth orbits spanning roughly 10 hours, and deploying Starlink V3 satellites in their first operational use.

Regulatory clearance is still pending. A successful execution would bring SpaceX significantly closer to achieving a fully reusable heavy-lift launch system capable of dramatically reducing costs while enabling deployment of larger Starlink satellite payloads.

In related technology news, Meta CEO Mark Zuckerberg made headlines Wednesday by pushing back against industry suggestions that AI development should be deliberately slowed. He contended that market competition and existing legal frameworks provide sufficient incentives for responsible development. This position contrasts sharply with views expressed by Anthropic’s Dario Amodei, OpenAI’s Sam Altman, and Elon Musk.

The post Wednesday’s Market Movers: Intel (INTC), Apple (AAPL), Coinbase (COIN), and SpaceX Lead the News appeared first on Blockonomi.

TLDR

• Lumentum stock surged 6.7% to $895.20, claiming the top spot among S&P 500 performers Wednesday
• Coherent advanced 5.6% to $286.42, rebounding from early-week AI sector weakness
• Corning underperformed with just a 1.6% increase, remaining 12% lower for the week
• Goldman Sachs equity distribution deal for up to $2 billion in Corning shares weighed on sentiment
• Strong ECOC 2026 presence and bullish analyst projections around $1,148 boosted Lumentum momentum

Optical networking companies staged a solid recovery Wednesday following a turbulent week start, with Lumentum (LITE) emerging as the S&P 500’s strongest performer.

Lumentum jumped 6.7% to reach $895.20 during midday sessions. Coherent (COHR) posted impressive gains as well, advancing 5.6% to $286.42. Both companies had experienced significant pressure during the week’s opening days amid broader AI sector weakness.

Lumentum Holdings Inc., LITE

Corning (GLW) managed a more modest advance, climbing 1.6% to $145.89, trailing considerably behind its optical networking counterparts.

The week began with sharp declines after prominent tech leaders including Elon Musk, OpenAI’s Sam Altman, and Anthropic’s Dario Amodei advocated for reduced AI development pace. This rhetoric sparked widespread selling pressure throughout AI-related equities.

Corning bore the brunt of Monday’s downturn, ending that session as the S&P 500’s worst performer. By Wednesday’s trading, shares remained depressed by 12% for the week, hovering near the 200-day moving average.

Lumentum broke a three-session slide Tuesday before extending gains Wednesday. Coherent similarly recovered with a 1.8% Tuesday advance followed by Wednesday’s stronger performance. Nevertheless, both stocks remain underwater for the week, with Lumentum down 2.5% and Coherent off 5.4%.

ECOC 2026 Presence Boosts Lumentum Confidence

A significant catalyst for Lumentum’s Wednesday rally stemmed from its prominent participation at ECOC 2026, Europe’s premier optical communications conference. The company demonstrated cutting-edge technology focused on AI-powered data center infrastructure and next-generation optical network solutions.

Wall Street analysts continue to express confidence in the stock through elevated price targets. Approximately two dozen analysts maintain a consensus Buy recommendation, with average 12-month projections around $1,148—significantly above current trading levels. Earlier this year, Lumentum reached a 52-week peak of $1,085.68.

A scheduled insider transaction involving Lumentum’s President of Global Business Units, totaling roughly $1.32 million under a Rule 10b5-1 trading plan established in May 2026, created minor selling pressure but failed to dampen overall market enthusiasm.

Goldman Sachs Equity Agreement Weighs on Corning

Corning’s relative underperformance extends beyond AI sentiment concerns. The company revealed late Friday its entry into an equity distribution arrangement with Goldman Sachs permitting up to $2 billion in new share issuance.

Mizuho Securities suggested Monday that this capital-raising initiative likely aims to fund substantial ongoing projects requiring additional financing.

This disclosure amplified downward pressure on Corning precisely when the optical networking sector faced broader headwinds.

Wednesday’s overall market tone proved constructive, with the Nasdaq Composite gaining 0.6%, providing tailwinds for technology and AI infrastructure stocks throughout the session.

Despite Wednesday’s strong performance, Lumentum’s stock continues trading substantially below its 52-week high of $1,085.68.

The post Lumentum (LITE) Stock Surges 6.7% as Optical Networking Sector Stages Midweek Recovery appeared first on Blockonomi.

Key Highlights

• Barclays shifted Alvotech’s rating from Underweight to Overweight while raising its price target from $4 to $8
• FDA completed inspection of Alvotech’s Reykjavik facility with a “Voluntary Action Indicated” status in July
• Three biosimilar candidates (AVT05, AVT06, AVT03) await FDA decisions by December 4, 2026
• Company maintained its fiscal 2026 revenue forecast between $650 million and $700 million
• Shares rallied approximately 8% on Wednesday, representing the strongest single-session performance since December

Shares of Alvotech surged roughly 8% during Wednesday’s trading session following a significant rating change from Barclays analyst Glen Santangelo, who elevated the stock from Underweight to Overweight while simultaneously doubling his price objective from $4 to $8. Trading activity pushed the stock to approximately $5.42, though it remains notably below its 52-week peak of $9.25.

Alvotech, ALVO

This represents one of the most significant daily advances for the biosimilar developer, establishing its strongest performance since the prior December according to data from Dow Jones Market Data.

The analyst’s upgrade comes on the heels of a critical regulatory milestone. In July, the FDA concluded its evaluation of Alvotech’s production facility located in Reykjavik, Iceland, assigning it a Voluntary Action Indicated designation—the agency’s most positive inspection classification.

The Icelandic manufacturing site had been a persistent concern among the investment community. Previous FDA examinations had identified shortcomings related to production standards and facility adherence, creating obstacles for product clearances. Importantly, the products themselves passed scrutiny; only the manufacturing location required remediation.

Following resolution of the facility concerns, Alvotech filed revised biologics license applications in June for three biosimilar candidates. The FDA has established December 4, 2026 as the target date for rendering decisions on all three submissions.

Biosimilar Candidates Awaiting Approval

The trio of products seeking regulatory clearance target therapeutic areas including chronic inflammatory diseases, eye care, and skeletal health.

AVT05 serves as a biosimilar candidate to Simponi, a Johnson and Johnson therapy designed to alleviate joint discomfort. AVT06 represents Alvotech’s biosimilar version of Eylea, jointly developed by Regeneron and Bayer for addressing retinal conditions and preserving vision. AVT03 mimics Prolia and Xgeva, both Amgen products focused on bone protection.

Additionally, the FDA has accepted a BLA submission for AVT16, a biosimilar to Entyvio, with an anticipated determination in the first quarter of 2027.

Santangelo highlighted that production operations at full capacity recommenced during the second quarter of 2026. Company leadership reiterated its revenue projection of $650 million to $700 million for the current fiscal year.

Geographic Diversification Strategy

Beyond its Icelandic operations, Alvotech has been pursuing additional manufacturing capabilities. The company established a collaborative arrangement with Fujifilm Biotechnologies in the United States, with enhanced production capacity anticipated to become operational in 2027.

Santangelo characterized the stock as a compelling investment opportunity, pointing to regulatory advancements and the defined timeline for potential approvals before the current year concludes.

Broader equity markets demonstrated positive momentum on Wednesday, with the S&P 500 advancing 0.2% and the Nasdaq climbing 0.4%, though Alvotech’s performance significantly exceeded these benchmark gains.

The stock continues trading substantially under its 52-week high of $9.25, with three critical FDA determinations scheduled for December 4, 2026.

The post Alvotech (ALVO) Stock Soars 8% Following Barclays Upgrade to Overweight appeared first on Blockonomi.

Key Takeaways

• ARK Invest’s Cathie Wood argues SpaceX’s $1.75 trillion valuation will appear drastically underpriced looking back, based on Starship economics
• ARK’s analysis suggests every Starship deployment could generate approximately $1 billion in yearly Starlink earnings
• Wood forecasts $10 trillion in yearly Starship-driven revenue by decade’s end assuming 10,000 annual missions
• Elon Musk responded to Wood’s analysis, stating the 10,000-flight ambition is “not impossible”
• SPCX debuted at $135 in June, peaked at $225.64, dropped to approximately $104.83, currently trading between $142-$152

Cathie Wood took to X recently to articulate a bullish thesis for SpaceX shares, characterizing the company’s $1.75 trillion initial public offering as a “deep value opportunity” driven by what she believes is enormous untapped Starship launch revenue.

Space Exploration Technologies Corp., SPCX

Wood’s thesis relies on calculations from ARK Invest analyst Sam Korus. His research indicates Starlink generates approximately $19 million annually for each terabit per second of infrastructure capacity. One Starship mission could theoretically launch up to 60 next-generation V3 satellites, contributing roughly 61 terabits per second of additional capacity. This translates to approximately $1 billion in steady annual revenue per mission.

Wood extrapolated this figure against Musk’s publicly stated ambition of achieving 10,000 Starship missions annually, calculating $10 trillion in prospective annual revenue by decade’s end. Elon Musk responded personally to her analysis with a brief comment: “It’s not impossible.”

SPCX shares debuted at $135 each in June, launched public trading at $150, and surged to $225.64. The stock subsequently fell beneath its offering price to approximately $104.83 before rebounding. During after-hours Tuesday trading, SPCX decreased 0.58% to $142.66.

Critical Assumptions Underlying the Forecast

The $10 trillion estimate carries significant qualifications. Korus acknowledged that revenue per terabit per second will probably decrease as network capacity grows. ARK’s research supports this trend: Starlink revenue per terabit per second has already fallen from $23 million in 2024 to $19 million in 2025.

Wood’s calculation additionally presumes all 10,000 yearly missions would carry Starlink infrastructure. Musk has independently promoted the identical mission frequency for point-to-point Earth transport, indicating not every launch would automatically expand Starlink capacity.

Achieving 10,000 missions annually would demand over 27 successful launches daily. Starship has executed only two missions since SpaceX became public in June, both suborbital tests.

Upcoming Milestones on the Horizon

SpaceX plans Starship Flight 14 for September 22, subject to regulatory clearance. This mission would mark Starship’s initial orbital flight and first “revenue-generating flight,” per CFO Bret Johnsen’s comments, carrying production V3 satellites.

Musk verified this week that V3 constellation rollout commences this month. He projects V3 will ultimately provide over 100 times the transmission capacity of the existing Starlink network comprising roughly 11,000 satellites.

For perspective, SpaceX recorded $18.67 billion in revenue during 2025. Musk stated in June the company “might be able to reach approximately $1T revenue in 2030,” significantly below Wood’s $10 trillion forecast.

Analysts currently assign SPCX a Moderate Buy rating consensus, with 26 Buy recommendations, 6 Hold ratings, and 2 Sell ratings. The consensus price target stands at $232.07, suggesting approximately 62% potential upside from present trading levels.

The post SpaceX (SPCX) Stock: Cathie Wood Declares Current Valuation a Bargain Opportunity appeared first on Blockonomi.

For the first time in three years, the United States Federal Reserve raised the benchmark interest rates by 25 bps.

In an unanimous decision 12-0, the Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, in support of its dual mandate.

This was quite expected given the recent developments, including the strong US labor report from a couple of weeks ago and the hawkish speech by Fed Chair Kevin Warsh. Moreover, the inflation data from last week gave the central bank even more reasoning to do so.

The price reaction from BTC was quite surprising as the asset actually surged by a grand and a half to $76,500 where it was stopped, for now.

The asset crashed hard yesterday after the Senate failure of the CLARITY Act but today’s move shows that the Fed hiked was priced in. All eyes are now on the next speech by Warsh.

The post Breaking: Fed Raises Interest Rates by 25 Bps, Bitcoin Price Reacts appeared first on CryptoPotato.

Four blue-chip layer-1 blockchains from the last market cycle have lost more than 99% of the value once locked on them, and a crypto researcher is asking if Robinhood Chain is next.

Stacy Muur pointed to steep TVL losses at Fantom, Aurora, Canto and Songbird, putting Robinhood Chain’s recent growth against a less forgiving history.

Four Blue-Chip L1s That Cratered

In a post on X, Muur called out the damage bluntly. “Blue-chip L1s from the last cycle got absolutely deleted,” she wrote before running through the numbers. Fantom peaked at $7.7 billion in locked value and now sits at $4.8 million, with daily decentralized exchange volume down to under $9,000 even though $318 million worth of stablecoins are still parked on the chain.

Aurora went from $2.6 billion to $3.1 million, and DefiLlama shows just 133 addresses touching the chain in the past day, despite the project having raised $102 million over its lifetime. Canto fell from $200 million to $3.6 million, with its token now trading at $0.0017 for a market cap of roughly $1 million.

On its part, Songbird dropped from $50 million to about $200,000, though it still pulled in over 2,500 daily active addresses even with chain fees sitting at just $77 for the day.

Current DefiLlama data shows Robinhood Chain itself holds about $928 million in DeFi TVL, several orders of magnitude above where any of the four chains Muur cited stand today, with a stablecoin market cap of $1.026 billion. Its 24-hour DEX volume was $1.552 billion, while perpetuals volume hit $577.58 million.

The chain recorded $524,989 in fees and $471,769 in revenue over the same period, although it also had net outflows of $11.11 million. Its DeFi TVL is up 3.35% over seven days and 71% across 30, and it ranks 10th among the biggest chains by that metric, behind more established networks like Ethereum, Solana, Base, BSC and Tron.

Despite the impressive performance, Muur closed her post by asking, flatly, whether Robinhood Chain’s own TVL will still be around in 2030.

Activity High, but TVL Durability Remains Untested

Robinhood Chain’s DEX volume hit a daily high above $1.3 billion in early September, with Arkham data at the time showing the chain generating more in fees than Solana, Base, or Ethereum, one of the drivers being the direct trading of meme coins against tokenized stocks.

It has since beaten that mark repeatedly, going as far as $2.61 billion in DEX volume on September 11, with yesterday’s coming in at over $1.6 billion.

But Muur’s comparison raises a different question: whether the current usage can translate into TVL that persists through another market cycle, and the four older chains have shown how dramatically liquidity can disappear after an L1 falls out of favor.

The post Robinhood Chain’s TVL Nears $1B, but Failed L1s Raise Sustainability Question appeared first on CryptoPotato.

Ethereum is still trading around $2.4K after a sharp recovery from the $1.5K area. The latest charts show ETH consolidating beneath the $2.5K resistance region, while supply continues to tighten. The technical structure remains constructive on the higher timeframe, although short-term momentum has weakened.

Ethereum Price Analysis: The Daily Chart

The daily chart shows a significant structural improvement compared with the June lows. ETH formed a base around the $1.5K-$1.6K region before beginning a sustained recovery that eventually pushed the price above the $2K area and into the $2.5K zone.

The most important near-term resistance is the $2.5K zone, where ETH has spent several weeks consolidating. The price has repeatedly struggled to confirm a breakout above this range, and the latest candles show another rejection at this level. A decisive daily close above $2.5K could open the way toward the next major psychological resistance around $3K.

On the downside, the first important support appears around $2.0K-$2.1K. This zone is particularly significant because it also closely overlaps with the 100-day and 200-day moving averages. The 200-day moving average is around $2.05K and is rising, while the 100-day moving average is also turning upward near the $1.95K area. Holding this region would help preserve the improving medium-term structure.

ETH/USDT 4-Hour Chart

The 4-hour chart demonstrates a more granular picture of the current consolidation. ETH experienced a powerful upside move around August 19-22, climbing from roughly $1.9K toward the $2.5K region. Since then, the market has largely remained inside a broad horizontal range.

The range currently appears to extend from approximately $2.35K to $2.6K, with the $2.5K zone acting as the central resistance area. ETH is now trading around $2.4K after recently falling from the upper half of the range.

The immediate technical concern is that the price has moved toward the lower boundary of the range. The $2.35K area is therefore an important short-term support. If buyers defend this region and reclaim $2.5K, the range could remain intact, and the upper boundary near $2.6K could come back into consideration.

Conversely, a breakdown below $2.35K would weaken the range structure. In that scenario, the next visible support is the $2.25K order block. A loss of that region would expose the broader $1.9K support area.

The 4-hour RSI has fallen toward the 30 region, indicating that short-term momentum has become significantly weaker following the rejection from the $2.5K area. This leaves room for a technical rebound, but the RSI alone does not confirm that a durable bottom has formed. Price’s reaction around $2.3K-$2.35K should therefore be important for determining whether this is simply a pullback within the range or the beginning of a deeper correction.

On-Chain Analysis

The exchange-reserve chart shows a clear long-term decline in ETH held on exchanges. The visible reserve level has fallen from above 21M ETH during the first half of 2025 to approximately 14.6M ETH currently.

Notably, the decline in exchange reserves has continued even as ETH recovered toward $2.4K. This indicates that the amount of ETH tracked on exchanges has been trending lower rather than expanding alongside the recent price recovery.

A continued reduction in exchange balances can mean that fewer coins are immediately available on exchanges for potential selling, which can reduce readily available exchange supply. However, the metric by itself does not establish future price direction, since ETH can move between exchanges, wallets, custodians, and other entities for numerous reasons.

From a technical perspective, however, the combination is worth watching. ETH remains below the key $2.5K resistance, while exchange reserves are near their lowest visible level on this chart. If ETH manages to reclaim $2.5K while reserves continue declining, it would provide a supportive backdrop for the breakout. On the other hand, failure to hold the $2.3K-$2.35K 4-hour support would keep the market in a corrective phase despite the longer-term decline in exchange reserves.

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XRP fell about 8% over the past 24 hours, one of the worst showings among the top cryptocurrencies, after the US Senate failed to advance the Digital Asset Market CLARITY Act on Tuesday.

The drop left XRP down well over 10% for the week, well behind Bitcoin and most other major coins, and it shows how closely tied the token’s price still is to progress on crypto legislation in Washington.

The Selling Was Not Just Profit-Taking

XRP’s price ran from around $1.46 per CoinGecko data to near $1.27, with analyst Xaif Crypto noting that its cumulative volume delta (CVD) cratered to negative 10.5 million as the price dumped.

“Sellers aren’t hiding anymore, this is aggressive dumping not just profit taking,” they wrote on X.

The selloff tracked the Senate vote almost exactly. Cloture on the bill, formally known as H.R. 3633, needed 60 votes and got 49. Every yes vote came from Republicans, and four of their own broke ranks to vote no.

Furthermore, Senators Gillibrand, Warner, Booker, Warnock, Gallego, Alsobrooks, and Cortez Masto all voted no after months of talks, meaning no Democrats crossed over to support it.

The CLARITY Act is meant to divide oversight of digital assets between the SEC and CFTC and bring exchanges, brokers, and dealers under a new federal registration regime, provisions the market had been pricing ahead of the Tuesday vote.

At the time of writing, CoinGecko data put XRP around $1.28, down over 8% in 24 hours and more than 10% in seven days. The picture looks different further out, with the Ripple token still up close to 29% over the past 30 days, even after this week’s drop, although it remains down more than 56% across one year and about 65% below its all-time high of $3.65 from July 2025.

Bitcoin and the Rest of the Market Also Slipped

The broader market was also under pressure, with Bitcoin slipping around 2.0% over the same 24 hours to trade near $75,000, while its share of the total crypto market remained above 56%. On its part, Ethereum dropped close to 4%, which saw it trading a few bucks under $2,400.

Stellar dipped even harder than XRP, shaving nearly 9% from its value, while BNB was only slightly ruffled, with its price dropping less than 1%.

Zcash gained about 3%, and Hyperliquid fell more than 2% over the same period, while Dogecoin slipped 3.7% and Solana lost over 4%, in line with the rest of the market’s retreat.

For XRP, the immediate price damage does not change its legal position, as pointed out by Ripple CEO Brad Garlinghouse, who also stated that his company “has never been stronger” despite the CLARITY setback.

The post Why XRP Was Hit Hardest After the CLARITY Act Senate Failure appeared first on CryptoPotato.

The CLARITY Act did not receive enough support in the US Senate, so it could not move to official discussion. This triggered a correction in the broader cryptocurrency market, while the upcoming FOMC meeting may worsen the sector’s condition.

The prevailing expectation is that interest rates in the USA will rise by 0.25%, yet analyst Ali Martinez assumed the central bank may be forced to keep the benchmark unchanged, which could propel a BTC price rally. Here’s why.

Influence From Trump?

Martinez started his thesis by noting the CLARITY Act failure and describing it as “a major setback for one of Trump’s crypto-policy objectives ahead of the November midterms.”

Then, he revealed that the odds of a 25-basis-point rate hike following the FOMC meeting, scheduled for later today (September 16), are roughly 93%, with only a small minority expecting the figure to stay the same.

According to the analyst, the smaller group may actually get it right this time. He pointed to the approaching midterms in the US, arguing that Trump needs a political win and that another rate increase could create more economic pressure, possibly hurting his chances of success.

“That could weigh on Kevin Warsh and the FOMC’s decision-making,” he said.

Martinez thinks that such a surprise move could trigger a powerful rally across risk assets, with BTC (which has rarely risen after the past 14 FOMC decisions) potentially surpassing $82,000.

“This is my wild prediction. Not the consensus view. Trump needs a win. A no-hike decision could give markets exactly the surprise they need to rally,” he concluded.

However, another angle is worth considering. The widely expected rate hike may already be priced in, making Fed Chair Warsh’s press conference the key event to watch. It will take place immediately after the FOMC meeting, and any signals of further rate increases could negatively impact BTC and altcoins. On the other hand, a softer tone and remarks that the central bank has made progress on inflation could lead to a solid rebound.

Massive Shorts Ahead of the Meeting

X user Max Crypto revealed that a mysterious whale opened a $50 million short position on BTC and a $15.8 million short on ETH ahead of the central bank’s crucial decision.

Usually, such major bets fuel speculation that the trader may have access to inside information. However, the whale’s win rate is around 40.6%, meaning their track record is far from flawless.

Meanwhile, another anonymous trader (with a staggering 100% win rate) recently opened multi-million shorts on BTC, ETH, and ZEC before the CLARITY Act vote. As mentioned above, the bill did not move forward for official discussion, and the crypto market headed south.

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