Hi Everyone,
Here is a brief crypto market update which may be of interest, following the recent global risk-off move across equities, commodities and digital assets which appears driven by a rapid unwind of leverage rather than new fundamental information (crypto specific).
This was a liquidity-led, cross-asset deleveraging event, not a deterioration in structural, regulatory, or long-term adoption fundamentals.
What happened?
- Bitcoin sold off ~10–12% in thin weekend trading, falling from ~$84k to ~$74k intraday before stabilising near $75–77k. The move coincided with a sharp cross-asset deleveraging, with Gold down ~7–10% and Silver down ~25–30%.
- A major leverage flush hit crypto futures, with ~$2.2–$2.6bn in liquidations (≈80–85% longs), the largest since 10 Oct 2025, when a similar leverage cascade occurred.
- Sentiment deteriorated rapidly, with visible on-chain flows, positioning imbalances, and thin liquidity accelerating selling pressure.
Why did it happen?
- Cascading liquidations: Over-leveraged long positioning was forcibly closed in a reflexive feedback loop.
- Cross-asset contagion: Forced selling in leveraged metals and equity positions spilled into crypto, reinforcing a global deleveraging dynamic rather than a crypto-specific shock.
- Thin weekend / Asia-session liquidity amplified relatively modest initial sell pressure.
- Macro-driven de-risking: A broad sell-off across equities, precious metals, and other risk assets signalled tighter liquidity expectations and reduced risk appetite.
- Technical breakdowns + sentiment reflexivity turned a routine correction into a short, sharp purge.
Have the fundamentals changed? Short answer - No.
- Institutional adoption continues to grow across Wirehouses, Pensions, Endowments, Sovereigns and Wholesale allocators.
- Structural integration continues to accelerate, particularly in Stablecoins, Tokenisation, and on-chain settlement infrastructure.
- U.S. policy direction is materially improving, with a more constructive regulatory and political backdrop emerging:
- Kevin Warsh (Fed Chair nominee)
- Paul Atkins (SEC Chair)
- David Sacks (White House AI & Crypto Czar)
- Mike Selig (CFTC Chair nominee)
- Donald Trump, Howard Lutnick, and Scott Bessent at the Cabinet level
Together, this represents the most crypto-constructive U.S. administration and regulatory setup to date and adoption, validation and integration continue without pause.
We see adoption (investment) and structural integration of the technology continuing at an exponential pace and institutions are taking note.
A couple of recent adoption trends:
- U.S. Wire Houses (est $15+ Trillion AUM) - Permitting client crypto exposure primarily via Exchange Traded Products
- Wells Fargo - Clients purchased $383 million Bitcoin during Q4 price dip as per SEC 13F filings
- Bank of America - Recommending 1-4% allocation to Bitcoin & Crypto
- DTCC - Pilot to tokenise securities (potential $2.5 quadrillion in transaction volume)
- Morgan Stanley - Filed for Bitcoin, Ethereum and Solana ETF's
- Harvard Endowment - Bitcoin ETF is their largest disclosed position in 13F filing.
- Abu Dhabi's sovereign wealth fund (Mubadala) - ~$560m investments into Bitcoin
- Amundi - Launches Money Market fund on Ethereum
- Apollo - Launches Private Credit fund (ACRED) on crypto blockchains (Ethereum)
- BNY Melon - Tokenised AAA-rated CLO on Ethereum
- Baille Gifford - Tokenises it's bond fund on Ethereum
- Czech Central Bank - Allocated to Bitcoin
- Fidelity - Launched Money Market Fund & Stablecoin on Ethereum
- JP Morgan - Tokenises Treasuries and Money Market funds
- Luxembourg Sovereign Wealth Fund (SWIF) - Allocated ~1% to Bitcoin via ETP's
- Swedish Central Bank - Reviewing Bitcoin as a diversifying asset and digital currency
- Visa - Integrating stablecoins like USDC as part of the settlement layer
- SEC - Chair Paul Atkins states ambition for "financial markets to move on-chain (on crypto blockchains) within a couple years, driving forward market efficiency.
- Stablecoins - $33Trillion in transaction volume in 2025, up 72% YOY
- Venezuela - Used stablecoins (notably USDT) for oil transactions; related wallets were frozen by Tether in coordination with U.S. authorities. Claims of large sovereign Bitcoin holdings remain unconfirmed.
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Ray Dillet
Head of Financial Institutions
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