Crypto Market Digest: Institutional Bitcoin Divergence (2026-05-21)

South Korea funeral firm loses $33M on Ethereum ETF

South Korean funeral service company Bumo Sarang has recorded a large unrealized loss after investing customer-linked funds in a leveraged Ethereum-related ETF. Bumo Sarang, South Korea’s seventh-largest funeral service operator, invested 59.5 billion won in a leveraged exchange-traded fund tied to Bitmine, an Ethereum treasury company. The product seeks twice the daily return of Bitmine’s stock.

The investment’s book value fell to 10.2 billion won by the end of 2025. That left Bumo Sarang with a 49.3 billion won paper loss, equal to about $32.7 million to $35.6 million depending on exchange rates used in reports. A Bumo Sarang representative said the loss was a “short-term unrealized loss due to global market volatility” and remained “sufficiently controllable within the company’s financial buffer.”

The product is the T-REX 2X Long BMNR Daily Target ETF, or BMNU. Kraken’s stock data page says BMNU aims to provide two-times leveraged exposure to the daily price movement of Bitmine Immersion Technologies stock, less fees and expenses. Leveraged ETFs reset daily, so losses can grow when the linked stock stays volatile. In this case, the funeral company’s position depended on Bitmine, whose market value has moved with Ethereum sentiment and treasury-related demand.

Bitmine remains one of the largest public Ethereum treasury firms. As reported by crypto.news, the company added 71,672 Ethereum in one week, lifting its holdings to 5.28 million ETH, equal to 4.37% of Ethereum supply. The same crypto.news report said Bitmine valued its Ethereum holdings at $2,191 per ETH as of May 17 and remained 87% of the way toward its 5% supply target.

The case has renewed attention on South Korea’s funeral mutual aid industry. These firms collect prepaid customer funds over long periods, but they fall under the Fair Trade Commission rather than financial regulators. A review of 2025 audit reports from 75 funeral service firms found that 32 companies, or 42.7%, had total assets below customer prepaid balances. That means those companies could face refund pressure if many customers cancel at once. The report also said Christian Funeral Family of Faith, known locally as Mideumui Gajok, posted a 500 million won net loss in 2025. Its long-running deficit added to wider concern over smaller operators.

The Bumo Sarang loss came after South Korean investors showed heavy interest in Ethereum-linked stocks and leveraged products. Bitmine’s Ethereum treasury strategy made the company a popular overseas stock among local retail buyers. That interest now faces a tougher test as Ethereum and Bitmine-linked products remain volatile. For funeral companies, the larger issue is whether prepaid customer funds should be placed in high-risk products. The Bumo Sarang case now places crypto exposure inside a broader consumer protection debate. It shows how leveraged Ethereum-linked products can create losses outside traditional crypto exchanges and wallets.

[Korea Economic Daily]

Stablecoin supply tops $300 billion but growth stalls as Tether gains at rivals’ expense

The total stablecoin supply has just surpassed the $300 billion mark, with Tether’s (USDT) adding over $5 billion in the last month. Yet despite Tether’s growth, the supply of USDC, USDe, and PYUSD together declined by roughly $4.2 billion over the same period.

All things considered, a net category growth of nearly $900 million, the equivalent of a 0.3% growth of the total supply over the past month, could be considered a stall, with overall supply not meaningfully expanding even as Tether kept printing. Every marginal stablecoin dollar entering the system is a USDT dollar replacing a redeemed (USDC), (USDe), or (PYUSD) dollar.

USDe’s collapse is also a structural story worth noting. Down 28% in the last month and almost 34% year to date, Ethena’s synthetic dollar has experienced sustained outflows, notably since October 2025. The mechanism, where USDe’s yield depends on positive perpetual funding, has deflated with crypto perp funding compressed after the Oct. 10 deleveraging event.

USDe’s yield simply cannot compete with overcollateralized alternatives, with the supply of Sky’s USDS (+48.9% year to date) and World Liberty Financial’s USD1 (+33.7%) absorbing the bulk of the rotation. PYUSD’s supply has also declined by 13% over the last month, as its institutional distribution thesis has not driven supply growth.

As aggregate stablecoin supply has stalled with only Tether’s USDT growing, the bank-issued and GENIUS Act-compliant stablecoin entrants have had a harder start than many expected. If these new stablecoin issuers want to directly displace USDT’s market share, they would have to offer higher yields, better distribution channels, or regulatory wedges that USDT cannot match, though none of the current second-tier stables have shown those capabilities yet.

[The Block]

XRP Alliance links D’CENT’s 720k users to vaults

The XRP Alliance launched on May 19, linking D’CENT’s 720,000 hardware wallet users to XRP yield vaults via Flare Smart Accounts. D’CENT Wallet and Flare Network announced the coalition to connect users directly to XRP-denominated yield vaults without requiring a new chain, separate wallet, or gas token.

XRP holders can deposit into vaults directly from the D’CENT app using two signatures on the XRP Ledger, with Flare Smart Accounts minting FXRP and depositing it into the selected vault in a single flow. Two vaults are available at launch: the Monarq XRP Yield Vault (MXRPY), which targets 3% to 4% annually through various strategies, and the earnXRP vault, which offers a fully on-chain yield product with compounded returns.

“Through our partnership with Flare, we are happy to provide the best and easiest way to deposit and manage XRP in the Monarq Yield Vault with top-tier hardware security,” D’CENT said in its campaign announcement. The alliance also includes Doppler, Banxa, and Squid, aiming to build distribution and interoperability across the XRP ecosystem.

As reported in February, Flare expanded modular lending for XRP via Morpho and Mystic, establishing the infrastructure that the D’CENT integration now makes accessible to hardware wallet holders. XRP ETF products pulled in $81.63 million in net inflows in April 2026, reflecting growing institutional demand for XRP exposure.

The D’CENT integration extends this infrastructure toward the self-custody retail and semi-institutional base. D’CENT is offering a 0% platform fee through June 8, while the Monarq vault carries an initial deposit cap of 500,000 FXRP. Both vaults are accessible to non-D’CENT users through the Upshift platform, with yields varying based on market conditions and strategy performance.

[crypto.news]

Anchorage-related wallets once again purchased over 120,000 HYPE tokens, worth $5.87 million.

On May 20, according to Onchain Lens monitoring, a wallet associated with Anchorage further withdrew 121,099 HYPE from Bybit, worth $5.87M.

In the past month, it has cumulatively purchased 2.34M HYPE ($112.36M) and sent these HYPE for staking.

[PANews]

Japan is Adopting a Reverse CLARITY Act With Foreign Stablecoins

Japan’s Financial Services Agency has finalized rules allowing foreign-issued trust-type stablecoins into its payment system, with the changes published on May 19, 2026, and effective June 1. The decision reshapes how global stablecoins enter Asia and arrives as Washington advances its own crypto legislation.

What Japan’s New Stablecoin Rules Actually Mean? A trust-type stablecoin is a digital token fully backed by reserves held in a trust structure, redeemable at par with a fiat currency. Japan’s updated framework now lets qualifying foreign versions act as regulated payment instruments. Until now, foreign-issued stablecoins faced real regulatory friction inside Japan. Regulators often classified many of them as securities or left them in a gray zone that blocked everyday payment use.

The reform, published under Prime Minister Sanae Takaichi, reclassifies qualifying foreign trust-type stablecoins as Electronic Payment Instruments under the Payment Services Act. That single change integrates them into Japan’s formal financial rails.

At its center sits a rigorous equivalence standard. Foreign issuers must prove their home jurisdiction matches Japanese rules on licensing, auditing, anti-money laundering controls, and same-currency reserves to limit exchange-rate risk. Domestic intermediaries carry the first responsibility for verifying compliance. Major local players are already preparing, with SBI VC Trade exploring licensed services involving global stablecoins such as USDC. In this way, the June 1 start date will be closely watched. Success could accelerate inflows of global capital and unlock new payment applications, from remittances to tokenized settlement systems.

How the United States CLARITY Act Fits the Scene? Across the Pacific, the United States is advancing its own crypto framework. The Senate Banking Committee recently moved the CLARITY Act forward with a bipartisan vote of 15 to 9. The Digital Asset Market Clarity Act seeks to define regulatory jurisdiction between the SEC and the CFTC. It also builds on the earlier GENIUS Act to address stablecoin-related issues directly.

One key compromise involves yield. The bill generally prohibits passive, deposit-like interest on payment stablecoins while still allowing activity-based rewards for users. Analysts are cautiously optimistic. Alex Thorn of Galaxy Digital estimates the chance of the CLARITY Act becoming law in 2026 at roughly 65% to 75%, up from earlier near-even odds. Meanwhile, traders on Polymarket assign a 64% probability that the bill will become law in 2026.

Together, both stories point in the same direction. Japan’s regulatory refinement and America’s legislative push highlight a maturing global stablecoin ecosystem moving steadily from early experimentation toward real, structured integration. For issuers and intermediaries, this dual momentum signals that clarity is finally arriving, one jurisdiction at a time. Regulated frameworks on both sides of the Pacific could unlock cross-border payments, institutional adoption, and more transparent, inclusive financial systems worldwide.

Fed survey: 10% of U.S. adults used or held crypto in 2025

About one in ten American adults used or held cryptocurrency in 2025, up from 7% in 2024, as spot Bitcoin and Ethereum ETFs helped pull retail investors back into digital assets, according to new Federal Reserve data. The Federal Reserve’s latest Survey of Household Economics and Decisionmaking (SHED) shows that 10% of U.S. adults reported using or holding cryptocurrency in 2025, up from 7% in 2024 and marking the highest share since 2022.

The Fed’s numbers, based on a nationally representative sample of nearly 13,000 adults surveyed in October 2025, indicate that crypto participation has rebounded from the post‑FTX slump but remains below the 12% peak seen in 2021–2022. The survey finds that about 7% of American adults held cryptocurrency as an investment in 2025, making “investment exposure” by far the largest participation category. Only a small additional share used crypto primarily for payments or money transfers, echoing earlier Fed work showing that U.S. consumers overwhelmingly treat digital assets as speculative investment rather than as everyday money.

The Fed’s findings are broadly consistent with third‑party polling, such as a 2026 Security.org report estimating around 30% of Americans have ever owned crypto but a smaller active user base, underscoring how many retail participants treat coins as longer‑term holdings rather than high‑frequency payment tools. The Fed report explicitly links the 2025 rebound in crypto participation to the launch and rapid growth of spot Bitcoin and Ethereum ETFs, which created a more familiar, brokerage‑friendly on‑ramp for retail investors. As the summary of the Fed data notes, “the approval and growth of spot Bitcoin and Ethereum ETFs have influenced the rebound in retail participation,” with many households gaining exposure through brokerage and retirement accounts instead of directly via exchanges. That dynamic echoes earlier analyses from ETF and derivatives desks, which highlighted that the 2024–2025 cycle saw record flows into spot products even as direct exchange activity lagged pre‑crash peaks.

Demographically, the SHED data show that crypto use is most concentrated among adults under 45 and households with incomes above the national median, a pattern that has held since the Fed first began asking about digital assets in 2021. Younger, higher‑income respondents are more likely to report holding crypto as an investment, while lower‑income households are underrepresented among active investors even when controlling for age, according to Fed and regional‑Fed analyses of earlier survey waves. That skew partly reflects the higher risk tolerance and tech familiarity of younger, wealthier cohorts, and mirrors prior Pew and OANDA research showing outsized crypto participation among men aged 18–29 and higher‑income investors.

Despite the uptick in overall adoption, the role of cryptocurrency in everyday consumer payments remains small. A recent Kansas City Fed briefing using SHED data found that the share of U.S. consumers who use cryptocurrency for payments—purchases, money transfers, or both—has stayed below 3% since 2021 and fell to under 2% in 2023–2024, driven mainly by a drop in people using crypto just to send money to friends and family. The 2025 survey continues to show that most Americans who touch crypto do so as investors: in earlier Fed work, 11% reported using crypto for investment versus only 2% for payments or remittances in 2021–2022, and that basic split has persisted even as overall participation fluctuated.

Taken together, the new SHED data suggest that by 2025 crypto in the U.S. is settling into a dual identity: a mainstream, ETF‑accessible investment product for roughly one in ten adults, and a niche payments tool used by well under one in twenty. Whether that balance shifts in coming years will likely depend less on raw price cycles and more on how deeply spot ETFs, stablecoins and new regulatory frameworks embed digital assets into the broader financial system—something others will be tracking closely as fresh Fed survey waves arrive.

[FinanceFeeds, crypto.news]

Iran Parliament Weighs $60 Million Bounty Bill Targeting Trump and Netanyahu

Iran’s parliament is reviewing a bill that would obligate the state to pay €50 million (about $58 million) to anyone who kills US President Donald Trump, Israeli Prime Minister Benjamin Netanyahu, or US Central Command (CENTCOM) leader Admiral Brad Cooper. Lawmaker Ebrahim Azizi announced the proposal on Iranian state television, framing it as retaliation for the February 28 strikes that killed former Supreme Leader Ayatollah Ali Khamenei. The legislation is titled “Reciprocal action by military and security forces of the Islamic Republic.”

Azizi, who chairs the parliament’s National Security and Foreign Policy Committee, told state TV that the named officials must be “subjected to reciprocal action” and described the act as a religious duty for any “Muslim or free person.” Parliamentarian Mahmoud Nabavian confirmed the bill is heading to a vote and warned of a “devastating” response if Iran’s new Supreme Leader, Ayatollah Mojtaba Khamenei, is targeted next. The proposal has not yet cleared committee review, and any passed law would still need Guardian Council approval before taking effect.

Iran is among the world’s most heavily sanctioned economies, raising questions about how a state-backed reward of this size would actually be delivered. Tehran has previously leaned on alternative settlement channels, including digital assets, to move value outside the dollar system. The “Blood Covenant” group, which researchers say operates under regime tolerance, reportedly raised more than $40 million in pledged bounties on Trump after US strikes on Iranian nuclear sites last June. The funding mechanics of that effort have not been fully disclosed.

Whether crypto rails could carry any future state-linked payout remains speculative. The bill specifies no payment method, but Iran’s documented stablecoin use for sanctioned trade keeps the question open.

Daniel Cohen, a research fellow at the International Institute for Counter-Terrorism in Israel, told the Jerusalem Post that the bill looks more like propaganda than operational planning. He described the move as “psyops” aimed at signalling defiance after the February strikes weakened Tehran’s leadership. Cohen warned that open, state-endorsed rhetoric could still inspire lone actors even without a functioning payout.

Trump has matched Tehran’s rhetoric with his own. In a January 2026 interview, he framed any Iranian attempt on his life as a trigger for total retaliation. The Justice Department charged an Iranian national in 2024 over an alleged Revolutionary Guard plot against Trump. Defense Secretary Pete Hegseth said in March that an Iranian official planning a separate attempt was killed in a US airstrike.

Whether the bill clears parliament will signal how far Iran’s hardline establishment is willing to formalize threats that until now have lived in clerical statements and unofficial fundraising. The next committee session is the moment to watch.

Deloitte absorbs Blocknative team as crypto infra firm winds down

Deloitte has acquired Web3 infrastructure company Blocknative in a talent-focused deal that will see the startup wind down its APIs and gas oracle network next month, even as the Big Four firm deepens its push into crypto consulting. Deloitte announced on Tuesday that it had acquired Blocknative via what it described as a “talent acquisition-focused merger.”

The terms of the deal were not disclosed, but Deloitte said the Blocknative team will now “focus on driving Web3 innovation within Deloitte’s client ecosystem,” plugging its engineers and product staff into the firm’s existing blockchain and digital-assets practice. At the same time, Blocknative’s own infrastructure is being switched off: a banner on the company’s website tells users that the startup “is gradually ceasing operations,” and that its transaction APIs and Gas Network services will be wound down, with support expected only until June 19.

Founded in 2018, Blocknative built its reputation as a specialist in real-time mempool monitoring, gas-fee prediction and transaction management for Ethereum and other EVM chains. Its core products included APIs and SDKs that let wallets, protocols and traders subscribe to pending transactions, simulate execution, and dynamically adjust gas prices to improve inclusion odds and reduce failed transactions. Over time, the company expanded into a full Gas Network, a decentralized oracle system that delivered real-time gas fee estimates across more than 40 networks, including Ethereum mainnet, Arbitrum, Optimism, Polygon, Base and others, and a browser-based Gas Estimator extension widely used by power users.

Blocknative had previously raised at least $34 million from investors including Blockchain Capital, Foundry Group and others, and positioned itself as a key block builder and relay operator in Ethereum’s post-Merge MEV supply chain, at one point contributing more than 17,000 blocks to the network. The decision to shut down its commercial APIs and oracles rather than sell them to another infra provider underscores how competitive and margin-squeezed the crypto data and tooling market has become, particularly in a cycle marked by consolidation and pressure on venture-backed startups to find exits.

For Deloitte, the deal is another step in a years-long strategy of embedding blockchain expertise into its audit, tax and advisory businesses, after earlier partnerships with platforms like Waves and a steady build-out of crypto auditing, on-chain analytics and tokenization consulting for clients. The firm now markets digital-assets services ranging from smart-contract assurance to stablecoin accounting and proof-of-reserves attestations, and has been vocal about the need for “tech-enabled professional services” that combine traditional risk frameworks with native crypto engineering talent.

Bringing the Blocknative team in-house gives Deloitte hands-on mempool, gas and transaction-simulation expertise it can apply to areas like protocol due diligence, MEV risk analysis and performance tuning for institutional clients deploying on public chains. More broadly, the acquisition fits into a wave of consolidation across the crypto infrastructure stack, as traditional firms from exchanges to consultancies pick up distressed or sub-scale Web3 startups to accelerate their own roadmaps.

While Deloitte has not said whether it will preserve any of Blocknative’s public-facing tools, the announced June 19 sunset date for the API and Gas Network means developers relying on those services now face a tight migration window to alternative providers. For users, it is another reminder that even widely used crypto infrastructure can disappear quickly when strategic buyers care more about people than products—a dynamic likely to intensify as big consultancies, cloud vendors and financial institutions continue to expand their footprint in digital assets.

[The Block]

Exchanges press Senate to drop ‘manipulable token’ listing ban

Coinbase, Kraken, and Gemini are urging U.S. senators to strike a clause from the Digital Asset Market Structure Bill that would bar exchanges from listing tokens deemed “readily susceptible to manipulation,” warning it would effectively kill compliant listings for small-cap coins. The three U.S. centralized exchanges submitted redlined edits to Senate Agriculture Committee staff asking them to delete language that would allow only digital commodities “not readily susceptible to manipulation” to be listed on registered “digital commodity exchanges.”

That standard mirrors a long-standing Commodity Futures Trading Commission (CFTC) test for futures markets, where contracts can be denied or delisted if the underlying is too easy to manipulate. But in the spot-token context, Coinbase Federal Policy Director Robin Cook called it a “chicken-and-egg problem”: how can a token become liquid and less vulnerable to manipulation without first being listed on a major venue.

In their edits, the exchanges warned that grafting a futures-style manipulation test into the spot-token regime would “effectively shut small, low-liquidity tokens out of regulated venues and hand future CFTC chairs a blunt tool to choke innovation.” They argue that while the goal of preventing manipulation is shared, applying a binary “not readily susceptible” bar at the listing stage ignores how liquidity and surveillance actually work in crypto spot markets, where even large-cap assets can be volatile and thin during stress.

Instead, the firms are pushing for a “tailored framework” based on robust market-surveillance obligations, disclosure, and ongoing risk monitoring, rather than an ex ante veto focused on theoretical manipulability. The exchanges have told lawmakers that the clause could create a de facto whitelist regime where only a handful of large tokens like Bitcoin and Ethereum pass muster, while thousands of smaller projects are forced onto unregulated offshore platforms.

“Millions of Americans are participating in digital asset markets without the federal regulatory protections they deserve,” the companies said in one joint message, insisting that their goal is “expanding oversight, not limiting it” — but in a way that “does not come at the cost of market access.” That argument fits into a broader industry push for comprehensive U.S. market-structure rules, with more than 120 firms signing a recent letter urging the Senate Banking Committee to move forward on the CLARITY Act.

The contested language sits inside a sweeping digital asset market-structure package that would, for the first time, bring spot “digital commodities” — essentially non-security tokens akin to Bitcoin and Ether — under direct CFTC supervision via a new class of registered digital commodity exchanges. Under a section-by-section draft released by House and Senate negotiators, those exchanges would be “allowed to list only those digital commodities that are not susceptible to manipulation” and for which they have performed diligence on market structure and underlying networks.

The Agriculture Committee, which oversees the CFTC, controls half of the bill, while the Senate Banking Committee handles provisions that set security-token and stablecoin rules, leaving the listing standard a key battleground in inter-committee talks. Industry advocates say that if the “not readily susceptible to manipulation” language survives, it could incentivize developers to launch tokens abroad or rely on decentralized exchanges that fall outside the bill’s registration perimeter, undermining the goal of bringing activity onshore.

On the other hand, some market-abuse experts and consumer groups have praised the clause as one of the few hard brakes on listing risky, thinly traded assets that have been frequent targets of wash trading and pump-and-dump schemes. With time running out in the current Congress, the exchanges’ lobbying blitz underscores how much of the future small-cap token market could hinge on a few lines of statutory language — and how fiercely both sides are prepared to fight over what “manipulation” should mean in U.S. crypto law.

[Politico]

Stripe-backed Tempo launches Morpho lending on its payments chain

Tempo Morpho integration went live this week, plugging $7.5 billion in decentralized lending into the Stripe-backed payments blockchain. Tempo, the stablecoin payments blockchain backed by Stripe and Paradigm, has switched on Morpho’s lending marketplace, adding $7.5 billion in decentralized credit infrastructure to a network that until now handled only transfers and settlement.

The integration went live on May 18 and lets fintechs and enterprises building on Tempo lend, borrow and earn yield on idle stablecoin balances without leaving the chain. A Morpho governance proposal authorized $172,000 in MORPHO incentives to seed early activity on the Tempo instance.

Morpho runs a modular lending system where market curators set risk rules and asset parameters for each pool. Risk firms Gauntlet and Sentora have begun offering curated markets on Tempo, while oracle provider RedStone supplies price feeds for stablecoins, bitcoin-backed assets and tokenized real-world assets.

“We’re seeing growing demand from enterprises looking to integrate DeFi capabilities into their payments products and create more value for their users,” said Eric Kang, head of go-to-market at Tempo. Morpho is now live on @tempo. Tempo handles the payments. Morpho puts idle balances to work. Enterprises and applications can add onchain yield to their services with the open credit network for the world. pic.twitter.com/2jeoq05jkS

Tempo announced the launch on X, noting that enterprises and apps on the chain can now use Morpho for earn products, lending and onchain credit. The chain went live in March with a payments-only positioning, processing stablecoin transfers, foreign exchange and settlement for businesses.

Tempo’s mainnet launch in March was reported as part of a Stripe and Paradigm push into machine payments, with no native gas token and fees settled in stablecoins. Companies parking idle stablecoin balances on Tempo previously had no native way to put them to work. Morpho changes that by routing those balances into curated lending markets that still settle inside the Tempo ecosystem.

Morpho’s reach into traditional finance has expanded sharply this year. Apollo Global Management is acquiring up to 90 million MORPHO tokens over four years under a deal announced in February, a stake worth roughly 9% of the token supply. Morpho also powers Coinbase’s bitcoin-backed loans and lending products at Société Générale Forge, Gemini and Crypto.com.

The protocol’s institutional traction tracks broader appetite for productive stablecoin balances. Stable, a stablecoin-focused chain, tapped Morpho in October to power yield on idle balances inside its Stable Pay app. Tempo raised $500 million last year at a $5 billion valuation and counts Visa, Mastercard, Revolut, Shopify, Klarna and UBS among its design partners.

The chain sits alongside Circle’s Arc and the Canton Network in a wave of institution-focused blockchains targeting regulated finance. Adding Morpho turns Tempo from a settlement network into a fuller financial stack, the kind of stack Stripe needs if it wants enterprises to keep balances on the chain rather than sweeping them back to traditional accounts.

Ethereum 停滞不前，摩根大通加冕 Bitcoin 为新的机构基础层

Ethereum’s slide behind Bitcoin is no longer just a price story; JPMorgan says the institutional plumbing now confirms that BTC has pulled decisively ahead on flows, leaving ETH and the wider altcoin complex struggling to keep up.

JPMorgan analysts led by managing director Nikolaos Panigirtzoglou argue that Ethereum (ETH) and the broader altcoin market “may continue to underperform Bitcoin (BTC)” unless there is “meaningful improvement” in network activity, decentralized finance (DeFi) adoption and real‑world applications. The bank traces the current divergence back to the October 2025 deleveraging, when a sharp, geopolitics‑driven selloff triggered heavy liquidations in ETH products relative to BTC, particularly among systematic and crypto‑native traders.

While markets have since stabilized, the analysts say ETH has failed to fully regain lost ground either in price terms or in key institutional flow metrics. JPMorgan highlights spot ETF flows as one of the clearest signs of that gap. The bank estimates that spot Bitcoin ETFs have now recovered roughly two‑thirds of the outflows they suffered during the October 2025 drawdown, while spot ether ETFs have only clawed back about one‑third of their redemptions over the same period.

Futures positioning at the Chicago Mercantile Exchange (CME) tells a similar story: institutional Bitcoin exposure on regulated futures has “nearly fully restored” to pre‑selloff levels, but ETH futures open interest and net long positioning remain well below earlier peaks. Momentum‑driven players such as commodity trading advisors and quant funds are described as “slightly underweight” both assets, but the underweight is more pronounced in ETH, reflecting the heavier deleveraging it endured last October.

Beyond flows, JPMorgan points to fundamentals. The note argues that, despite a series of Ethereum upgrades over the past three years, the network has not produced “meaningful” growth in on‑chain activity: DeFi volumes have plateaued, total value locked remains below cycle highs, and user counts and transaction fees have not shown the kind of sustained expansion that would justify a sharp re‑rating versus Bitcoin. Lower base‑layer fees have also reduced ETH token burns under EIP‑1559, contributing to faster net supply growth and weakening one of the core “ultra‑sound money” narratives that once differentiated Ethereum from other smart‑contract platforms.

For altcoins more broadly, the bank cites thinner liquidity, lower order‑book depth and a string of security incidents as factors weighing on sentiment and discouraging fresh institutional capital. “All these factors have eroded confidence in the broader altcoin ecosystem and discouraged the deployment of fresh capital,” the analysts write, adding that Bitcoin has benefited from a perception as the “safer” macro and regulatory bet within the crypto complex. Earlier JPMorgan work this year already framed BTC as the “clear winner” in terms of ETF resilience and institutional positioning, noting that Bitcoin products have held net inflows even as some gold and silver funds bled assets.

The implication of the latest note is stark: upgrades alone will not rescue ETH’s relative trade. Unless Ethereum can reignite on‑chain activity—particularly in DeFi, real‑world assets and other non‑speculative use cases—and demonstrate that those flows translate into fee revenue and token demand, JPMorgan expects Bitcoin to keep leading both on price performance and in capturing the next leg of institutional inflows.

[CoinMarketCap Academy]

The U.S. government transferred 319 ETH and $930,000 in stablecoins—seized assets from FTX—into Coinbase.

On May 20, according to Onchain Lens monitoring, the US government sent 319 ETH (approximately $673,000.00) and $933,774.00 in USDT, DAI, and USDC from the FTX Alameda confiscated funds to Coinbase.

[PANews]

Crypto infrastructure firm Zerohash is seeking new funding at a valuation of over $1.50B.

May 20 news: Following Mastercard’s abandonment of its investment plan, crypto infrastructure company Zerohash is raising a new round of funding at a valuation exceeding $1.5 billion. Mastercard had previously considered a strategic investment in the company but later abandoned that plan after acquiring BVNK for $1.8 billion. Zerohash is now raising new capital at a valuation higher than the $1.5 billion discussed earlier this year.

Founded in 2017, the company provides APIs and embedded development tools to financial institutions and fintech companies, serving over 5 million users across 190 countries. Its clients include Morgan Stanley, Interactive Brokers, Stripe, BlackRock’s BUIDL Fund, Franklin Templeton, and DraftKings.

[CoinDesk]

Canaan mining posts $88.70 million Q1 net loss

Canaan mining maker posted an $88.7m net loss in Q1 2026 on revenue of $62.7m as Bitcoin prices and hashprice both fell sharply. Canaan Inc. reported in a May 19 press release that Q1 2026 revenue reached $62.7 million, in line with its February guidance range but down sharply from $196.3 million in Q4 2025.

The company recorded a gross loss of $22.9 million for the quarter, including a $25 million inventory write-down, and a net loss of $88.7 million compared to $86.4 million in the same period a year earlier. “Despite bitcoin price volatility, compressed hashprice conditions, elevated energy costs, and weather-related disruptions in North America, we delivered total revenue of $62.7 million, which was in line with our guidance,” said Nangeng Zhang, chairman and chief executive of Canaan.

Industrial mining equipment drove $39.6 million of Q1 revenue, though machine sales fell 75% sequentially as the company completed final deliveries under a large-scale North American order. Self-mining contributed $19.1 million in Q1 revenue, with Canaan producing 257 bitcoin at an average revenue per coin of $61,034. The company’s installed computing power across 10 joint-mining projects reached approximately 11 EH/s, up 10.7% sequentially.

Canaan grew its cryptocurrency treasury to a record 1,807.60 bitcoin and 3,951.53 Ethereum as of March 31. The company also acquired a 49% interest in ABC Projects in West Texas from Cipher Mining, adding approximately 4.4 EH/s of operational capacity and expanding its energy infrastructure footprint.

Canaan received a second Nasdaq non-compliance notice in January 2026 for trading below the $1 minimum bid price, with a July 13 deadline to regain compliance. The stock fell a further 13.94% to around $0.41 on Tuesday, near its 52-week low. Canaan guided Q2 2026 revenue between $35 million and $45 million, well below the analyst consensus of approximately $96 million. The company said it will continue monitoring global policy developments and market conditions and may revise its outlook as visibility improves.

The weak guidance reflects broader sector pressure. As miners are navigating simultaneously declining hashprice, higher energy costs, and increasing AI pivot costs, the Bitcoin price fell 22% in Q1, squeezing margins across the mining hardware supply chain. CFO Jin Cheng noted that $42 million in customer accounts receivable was collected in April, bringing total cash to approximately $85.5 million, providing near-term operational runway while the company awaits market stabilisation.

[crypto.news]