Members of Congress have <a href="https://www.benzinga.com/news/politics/25/12/49613154/senator-bought-up-to-1-6-million-in-bitcoin-etf-shares-in-2025-heres-the-potential-conflict-of-interest">been actively buying up</a> Bitcoin <a class="ticker-link" data-ticker="BTC" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/BTC-USD" target="_blank" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</a> and Bitcoin ETFs over the last 12 months. Many of the purchasers are allies of President Donald Trump and serve on financial committees, which could be a conflict of interest.



<h2 class="wp-block-heading">Congressman Buys Bitcoin</h2>



Congressman Byron Donalds (R-Fla.) recently disclosed buying $50,000 to $100,000 in Bitcoin, as reported by the<a href="https://www.benzinga.com/government-trades/members/byron-donalds"> Benzinga Government Trades page.</a>



The <a href="https://disclosures-clerk.house.gov/public_disc/ptr-pdfs/2026/20033747.pdf">purchase </a>came alongside Donald disclosing the sale of shares of Abbott Laboratories <a class="ticker-link" data-ticker="ABT" data-exchange="NYSE" href="https://www.benzinga.com/quote/ABT" target="_blank" rel="noopener">(NYSE:<a class="ticker" href="https://www.benzinga.com/quote/ABT">ABT</a>)</a> and the purchase of shares of Comfort Systems <a class="ticker-link" data-ticker="FIX" data-exchange="NYSE" href="https://www.benzinga.com/quote/FIX" target="_blank" rel="noopener">(NYSE:<a class="ticker" href="https://www.benzinga.com/quote/FIX">FIX</a>)</a>.



This marks the first purchase of Bitcoin by Donalds. Bitcoin traded between $84,436.31 to $89,412.66 on Dec. 18 and currently trades at $90,268.43, marking a gain for Donalds in the short time since he made the trade.



Donalds is a close ally of Trump. The president has signaled support for cryptocurrency and made several executive orders related to cryptocurrency since taking office.



The congressman is <a href="https://www.politico.com/news/2025/11/30/trumps-pick-to-replace-desantis-faces-a-republican-pile-on-in-florida-00670305">running </a>to be the next governor of Florida in the 2026 election and has the support of Trump in the race.



<h2 class="wp-block-heading">Committee Assignments Spark Conflict</h2>



Donalds currently serves on the Committee on Financial Services and on the Digital Assets, Financial Technology and Artificial Intelligence subcommittee.



Other members of these committees have purchased Bitcoin or Bitcoin ETFs over the past year, which has sparked concerns of potential conflicts of interest.



There are several pending pieces of legislation for Congress related to cryptocurrency. As a member of certain committees, members could have first-hand knowledge of the progress of legislation and timeline of any potential approvals or delays.



As a close ally of Trump and a member of the Digital Assets committee, the purchase of Bitcoin by Donalds could spark concerns from investors and/or mark a potential good entry point that deserves monitoring.



Bitcoin soared to new all-time highs of $126,198.07 in October 2025, but have fallen since then. Bitcoin is down 16.8% in the last six months and down 4.5% over the last year.



Image: Shutterstock

Trump's Pick For Next Governor Of Florida Buys Bitcoin: Is Congressional Committee A Conflict?

Bitcoin is holding above $90,000 amid a solid U.S. jobs data release on Friday.



<figure class="wp-block-table"><table class="has-fixed-layout"><tbody><tr><td>Cryptocurrency</td><td>Ticker</td><td>Price</td></tr><tr><td>Bitcoin</td><td><a href="https://www.benzinga.com/quote/BTC" target="_blank" class="ticker-link" data-ticker="BTC" data-exchange="CRYPTO">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</a></td><td>$90,526.47</td></tr><tr><td>Ethereum</td><td><a href="https://www.benzinga.com/quote/ETH" target="_blank" class="ticker-link" data-ticker="ETH" data-exchange="CRYPTO">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/eth/usd">ETH</a>)</a></td><td>$3,084.76</td></tr><tr><td>Solana</td><td><a href="https://www.benzinga.com/quote/SOL" target="_blank" class="ticker-link" data-ticker="SOL" data-exchange="CRYPTO">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/sol/usd">SOL</a>)</a></td><td>$136.55</td></tr><tr><td>XRP</td><td><a href="https://www.benzinga.com/quote/XRP" target="_blank" class="ticker-link" data-ticker="XRP" data-exchange="CRYPTO">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/xrp/usd">XRP</a>)</a></td><td>$2.09</td></tr><tr><td>Dogecoin</td><td><a href="https://www.benzinga.com/quote/DOGE" target="_blank" class="ticker-link" data-ticker="DOGE" data-exchange="CRYPTO">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/doge/usd">DOGE</a>)</a></td><td>$0.1402</td></tr><tr><td>Shiba Inu</td><td><a href="https://www.benzinga.com/quote/SHIB" target="_blank" class="ticker-link" data-ticker="SHIB" data-exchange="CRYPTO">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/shib/usd">SHIB</a>)</a></td><td>$0.058633</td></tr></tbody></table></figure>



Notable Statistics:



<ul class="wp-block-list">
<li>Coinglass data shows 80,473 traders were liquidated in the past 24 hours for $202.65 million.       </li>



<li>In the past 24 hours, top gainers include Polygon, Pump.fun and Stacks.</li>
</ul>



Notable Developments:



<ul class="wp-block-list">
<li><a href="https://www.benzinga.com/crypto/cryptocurrency/26/01/49820086/3-reasons-why-bitcoin-eth-xrp-sentiment-is-turning-bullish-in-2026">3 Reasons Why Bitcoin, ETH, XRP Sentiment Is Turning Bullish In 2026</a></li>



<li><a href="https://www.benzinga.com/crypto/cryptocurrency/26/01/49809271/forget-150000-bitcoins-real-target-is-2-9-million-vaneck">Forget $150,000, Bitcoin&#8217;s Real Target Is $2.9 Million: VanEck</a></li>



<li><a href="https://www.benzinga.com/analyst-stock-ratings/analyst-color/26/01/49812096/coinbase-global-analyst-turns-bullish-on-product-velocity-tam-expansion">Coinbase Global Analyst Turns Bullish On Product Velocity, TAM Expansion</a></li>



<li><a href="https://www.benzinga.com/crypto/cryptocurrency/26/01/49807173/2026-trailblazers-these-cryptos-might-be-worth-your-attention">2026 Trailblazers: These Cryptos Might Be Worth Your Attention</a></li>



<li><a href="https://www.benzinga.com/crypto/cryptocurrency/26/01/49806511/mike-novogratz-tells-scaramucci-crypto-treasuries-will-trade-below-nav-without-real-strategy-not-going-to-get-shareholder-value-just-by">Mike Novogratz Tells Scaramucci Crypto Treasuries Will Trade Below NAV Without Real Strategy: &#8216;Not Going To Get Shareholder Value Just By&#8230;&#8217;</a></li>



<li><a href="https://www.benzinga.com/crypto/cryptocurrency/26/01/49814694/trump-pardoned-ross-ulbricht-and-changpeng-zhao-but-wont-touch-sbf-heres-why">Trump Pardoned Ross Ulbricht And Changpeng Zhao, But Won&#8217;t Touch SBF — Here&#8217;s Why</a></li>
</ul>



Trader Notes: Altcoin Sherpa <a href="https://x.com/AltcoinSherpa/status/2009679034142077077">said</a> the current environment favors either short-term scalp trades or staying on the sidelines until Bitcoin delivers a strong, sustained breakout above $94,000. 



Until that happens, choppy price action is expected, making capital preservation the priority.



Crypto trader Jelle <a href="https://x.com/CryptoJelleNL/status/2009637094000361791">noted</a> that weeks after the sell-off, Bitcoin appears to have found a bottom following a dip to RSI 37. 



While the precise catalyst is unclear, he highlighted that this RSI level has historically acted as a meaningful inflection zone for BTC.



Michael van de Poppe <a href="https://x.com/CryptoMichNL/status/2009686612897345696">described</a> the current move as a key bounce, pointing out that Bitcoin is holding its crucial 21-day moving average and beginning to grind higher. 



He said the price action shows clear buying interest at these levels.



If this strength persists through the weekend, the probability of a push toward $94,000 rises significantly, which could reignite momentum across the broader altcoin market.



 Image: Shutterstock

Bitcoin Holds $90,000 As Ethereum, XRP, Dogecoin Slide Over 1%

Bitcoin <a class="ticker-link" data-ticker="BTC" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/BTC-USD" target="_blank" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</a> may play an underrated role in the recent protests in Iran, with the Iranian Revolutionary Guard reportedly moving $1 billion through crypto exchanges to evade sanctions.



<h3 class="wp-block-heading">Currency Collapse Drives Mass Bitcoin Adoption</h3>



The Iranian rial crashed to a record 1.42 million per U.S. dollar in late December, having lost over 40% of its value since June 2025.



While ordinary citizens flee economic <a href="https://www.washingtonpost.com/world/2026/01/09/iran-irgc-revolutionary-guard-cryptocurrency/">collapse</a>, Iran&#8217;s Islamic Revolutionary Guard Corps (IRGC) has been using cryptocurrency for a different purpose: evading international sanctions.



TRM Labs identified Zedcex and Zedxion, two UK-registered exchanges, as key facilitators of IRGC transactions. IRGC-linked activity accounted for 56% of total volume on these platforms between 2023 and 2025. 



The vast majority of transactions used Tether&#8217;s USDT stablecoin on the Tron <a href="https://www.benzinga.com/quote/TRX-USD" target="_blank" class="ticker-link" data-ticker="TRX" data-exchange="CRYPTO" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/trx/usd">TRX</a>)</a> blockchain.



IRGC crypto transactions surged dramatically: from $24 million in 2023 to $619 million in 2024, and $410 million through early 2025. TRM Labs traced funds through 187 sanctioned wallet addresses.



In one notable case, investigators identified a $10 million payment from an IRGC wallet to accounts funding Yemen&#8217;s Houthi rebels. 



Between Hezbollah, Hamas, and the Houthis, these organizations are now using cryptocurrency at previously unseen scales, with total identified volumes exceeding $2 billion.



<h3 class="wp-block-heading">Iran Offers Crypto Payments For Weapons Sales</h3>



Adding another dimension to Iran&#8217;s crypto strategy, the country is now openly advertising weapons sales with cryptocurrency payment options. 



According to promotional materials from the Ministry of Defence Export Center (Mindex), Iran is offering ballistic missiles, drones, and warships with crypto payment capabilities.



Mindex claims relationships with 35 countries, though their identities remain undisclosed. 



Security analysts note it&#8217;s extraordinarily rare for a country to openly advertise cryptocurrency payments for strategic military equipment.



<h3 class="wp-block-heading">Why This Matters For Bitcoin And Crypto Markets</h3>



The Iranian crisis validates Bitcoin&#8217;s value proposition as censorship-resistant money during currency collapse.&nbsp;



However, the internet shutdown exposes a critical vulnerability: Bitcoin requires infrastructure that authoritarian regimes can shut down.



The $1 billion IRGC operation demonstrates cryptocurrency&#8217;s evolution from fringe asset to tool of statecraft.&nbsp;



Between Hezbollah, Hamas, and the Houthis, these organizations are using cryptocurrency at scales previously unseen, with total identified volumes currently standing at over $2 billion.



For Ethereum, the IRGC&#8217;s choice of USDT on Tron rather than Ethereum highlights competition: lower fees and faster settlement make alternative chains more attractive for moving large sums under sanctions.&nbsp;



This fragments the crypto ecosystem and challenges Ethereum&#8217;s DeFi dominance.



The situation positions XRP as potentially favored by regulators because its compliance-focused design makes it less attractive to sanctioned actors, while still offering speed and low costs for legitimate cross-border commerce.



Polymarket traders assign about a 17% chance that Khamenei will be removed from power by the end of January, with trading volume spiking to $4.7 million in four days.



Image source: Shutterstock

Bitcoin's Overlooked Role In The Protests In Iran

Wall Street found firm footing to close the week as solid but unspectacular jobs data eased fears of a sharp labor market slowdown while keeping Federal Reserve <a href="https://www.benzinga.com/topic/federal-reserve">rate-cut expectations intact.</a>



 • Vistra shares are powering higher. <a href="https://www.benzinga.com/quote/VST" target="_blank" rel="noreferrer noopener">Why is VST stock surging?</a>



Both the S&amp;P 500 and the Russell 2000 climbed to fresh record highs, signaling a rally that has broadened across both large-cap and small-cap stocks. By midday trading in New York, the index of the 500 largest U.S. corporations broke above 6,970 points, up 0.7%. The Russell 2000 jumped up to 1.2% to 2,635, setting another all-time high and marking its fifth gain in the past six sessions.



Blue-chip stocks also hovered near record levels, with the Dow Jones Industrial Average trading around 49,555. The tech-heavy Nasdaq 100 advanced 1% but remained roughly two percentage points below its late-October peak.



December nonfarm payrolls rose by 50,000, slightly below expectations of 60,000, confirming a continued cooling in employment growth. The brighter signal came from the unemployment rate, which unexpectedly declined to 4.4% from 4.5%, suggesting the labor market may be stabilizing after <a href="https://www.benzinga.com/markets/economic-data/26/01/49811034/us-economy-adds-50000-jobs-in-december-unemployment-rate-drops-to-4-4">months of gradual deterioration.</a>



On the consumer side, the University of Michigan reported stronger-than-expected sentiment at the start of the year. The index climbed to 54, its highest level since September.



Investors are now almost fully pricing in the Federal Reserve to leave interest rates unchanged at its late-January meeting, according to the CME FedWatch tool. Expectations remain alive for two rate cuts later in the year.



Among notable movers, Vistra Corp. <a class="ticker-link" data-ticker="VST" data-exchange="NYSE" href="https://www.benzinga.com/quote/VST" target="_blank" rel="noopener">(NYSE:<a class="ticker" href="https://www.benzinga.com/quote/VST">VST</a>)</a> surged after securing a 20-year agreement with Meta Platforms Inc. <a class="ticker-link" data-ticker="META" data-exchange="NASDAQ" href="https://www.benzinga.com/quote/META" target="_blank" rel="noopener">(NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/META">META</a>)</a> to supply more than 2,600 megawatts of zero-carbon energy from <a href="https://www.benzinga.com/trading-ideas/movers/26/01/49814689/nuclear-stocks-rip-higher-as-meta-goes-atomic">nuclear plants in Ohio and Pennsylvania.</a> Shares rallied more than 13%.



Intel Corp. <a class="ticker-link" data-ticker="INTC" data-exchange="NASDAQ" href="https://www.benzinga.com/quote/INTC" target="_blank" rel="noopener">(NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/INTC">INTC</a>)</a> also<a href="https://www.benzinga.com/markets/equities/26/01/49809164/intel-momentum-spikes-after-trump-reveals-tens-of-billions-of-dollars-in-federal-gains"> jumped </a>10%, reaching its highest levels since March 2024, after President Donald Trump described his recent meeting with <a href="https://www.benzinga.com/markets/tech/26/01/49808397/intels-high-stakes-revival-gets-trump-boost">CEO Lip-Bu Tan as "a great meeting."</a>



Commodities extended their advance. Silver rebounded sharply, climbing 4% to the $80-an-ounce level. Gold added 0.6% to $4,500 an ounce, while copper rose nearly 2%.



Crude oil was <a href="https://www.benzinga.com/markets/market-summary/26/01/49818860/crude-oil-rises-sharply-us-consumer-sentiment-edges-higher-in-january">on track for a weekly gain</a>, with WTI crude eyeing back-to-back 3% advances on Thursday and Friday, despite early-week pressure tied to geopolitical developments in Venezuela.



Bitcoin <a href="https://www.benzinga.com/quote/BTC-USD" target="_blank" class="ticker-link" data-ticker="BTC" data-exchange="CRYPTO" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</a> traded flat near $91,000, showing little movement for the week and continuing to lag equities and precious metals.



<h2 class="wp-block-heading">Friday&#8217;s Performance In Major U.S. Indices, ETFs</h2>



<figure class="wp-block-table is-style-stripes"><table class="has-fixed-layout"><thead><tr><th>Major Indices</th><th>Price</th><th>% Change</th></tr></thead><tbody><tr><td>Nasdaq 100</td><td>25,773.72</td><td>+1%</td></tr><tr><td>S&amp;P 500</td><td>6,973.17</td><td>+0.7%</td></tr><tr><td>Dow Jones</td><td>49,554.46</td><td>+0.6%</td></tr><tr><td>Russell 2000</td><td>2,632.10</td><td>+1.1%</td></tr></tbody></table><figcaption class="wp-element-caption">Updated by 12:50 p.m. ET</figcaption></figure>



According to <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent010926&amp;t=be2bearmibe3na1">Benzinga Pro</a> data: 



<ul class="wp-block-list">
<li>The Vanguard S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/quote/VOO">VOO</a>) advanced 0.7% to $638.49. </li>



<li>The SPDR Dow Jones Industrial Average ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/quote/DIA">DIA</a>) moved 0.5% higher to $495.06. </li>



<li>The tech-heavy Invesco QQQ Trust Series (NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/QQQ">QQQ</a>) climbed 1.0% to $626.40. </li>



<li>The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/quote/IWM">IWM</a>) traded at $261.29, up 1.2%. </li>



<li>The Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/quote/XLU">XLU</a>) outperformed, rising 1.6%, while the Health Care Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/quote/XLV">XLV</a>) lagged, flat on the session.</li>
</ul>



<h2 class="wp-block-heading">Russell 1000's Top 5 Gainers On Friday</h2>



<figure class="wp-block-table"><table class="has-fixed-layout"><thead><tr><th>Stock Name</th><th>% Change</th></tr></thead><tbody><tr><td>UWM Holdings Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/quote/UWMC">UWMC</a>)</td><td>+12.85%</td></tr><tr><td>Vistra Corp.</td><td>+10.53%</td></tr><tr><td>Builders FirstSource, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/quote/BLDR">BLDR</a>)</td><td>+11.06%</td></tr><tr><td>AST SpaceMobile, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/ASTS">ASTS</a>)</td><td>+9.51%</td></tr><tr><td>SanDisk Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/SNDK">SNDK</a>)</td><td>+12.90%</td></tr></tbody></table></figure>



<h2 class="wp-block-heading">Russell 1000's Top 5 Losers On Friday</h2>



<figure class="wp-block-table"><table class="has-fixed-layout"><thead><tr><th>Stock Name</th><th>% Change</th></tr></thead><tbody><tr><td>Under Armour, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/quote/UAA">UAA</a>)</td><td>-6.25%</td></tr><tr><td>Reddit, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/quote/RDDT">RDDT</a>)</td><td>-5.58%</td></tr><tr><td>Maplebear Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/CART">CART</a>)</td><td>-5.25%</td></tr><tr><td>Lululemon Athletica Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/LULU">LULU</a>)</td><td>-4.34%</td></tr><tr><td>DoorDash, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/quote/DASH">DASH</a>)</td><td>-3.55%</td></tr></tbody></table></figure>



Image created using artificial intelligence via Midjourney.

S&P 500, Russell 2000 Soar To Record Highs, Silver Jumps To $80: What's Moving Markets Friday?

Bitcoin <a class="ticker-link" data-ticker="BTC" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/BTC-USD" target="_blank" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</a> is setting up well for a rally in 2026, backed by several bullish technical indicators and receding sell pressure.



What Happened: Glassnode data <a href="https://insights.glassnode.com/the-week-onchain-week-01-2026/">shows</a> that profit-taking pressure has largely subsided, allowing Bitcoin to rebound from around $87,000 into the mid-$90,000 range. 



The move reflects exhaustion on the sell side—particularly among long-term holders—and signals a stabilization phase following the distribution seen in the fourth quarter of 2025.



However, upside momentum now faces substantial overhead supply between roughly $92,000 and $117,000, where many recent buyers are sitting near breakeven. 



Absorbing this supply is expected to take time and remains a key obstacle to a sustained bullish continuation.



A critical level to watch is the short-term holder (STH) cost basis near $99,000. 



A sustained move above this level would signal renewed confidence and trend recovery. 



Failure to reclaim it increases the risk of an extended consolidation or bearish phase, as recent buyers remain modestly underwater.



Why It Matters: Glassnode highlights several off-chain dynamics that point to improving—but still cautious—conditions:



<ul class="wp-block-list">
<li>Corporate treasury demand remains opportunistic and highly price-sensitive, providing downside support rather than acting as a primary trend driver.</li>



<li>U.S. spot Bitcoin ETF flows have turned positive again, signaling an early return of institutional spot demand.</li>



<li>Futures open interest is rebuilding gradually, suggesting rising risk appetite without signs of excessive leverage.</li>
</ul>



Derivatives markets also show signs of normalization. Implied volatility appears to have bottomed and is beginning to rise modestly, though it remains compressed. Positioning is increasingly skewed toward call options, reflecting a cautious but constructive shift in trader sentiment.



A record options expiry recently cleared roughly 45% of open interest, removing price-pinning effects and providing a cleaner signal on underlying market sentiment as Bitcoin moves further into 2026.



Image: Shutterstock

Bitcoin Is Set For A Rally In 2026 If These Levels Break: Report

Polymarket faces credibility questions after controversial rulings on several markets that have cost traders millions.



<h3 class="wp-block-heading">Venezuela Market Sparked Rules Fight Over &#8220;Invasion&#8221; Definition</h3>



Polymarket <a href="https://x.com/Domahhhh/status/2009653610905321558">ruled</a> that the U.S. did not invade Venezuela despite a military operation involving 150 aircraft from 20 bases that killed 100 people and extracted the country&#8217;s head of state.&nbsp;



The market resolution sparked backlash from traders who pointed to Polymarket&#8217;s own rules.



The platform&#8217;s rules stated the market would resolve &#8220;Yes&#8221; if the U.S. &#8220;commences a military offensive intended to establish control over any portion of Venezuela.&#8221;&nbsp;



Trump explicitly said in multiple interviews including The New York Times that &#8220;the United States now runs Venezuela&#8221; and would continue running the country for years.



The market initially spiked from 2.5 cents to over 50 cents as Trump kept talking, but Polymarket ruled &#8220;No,&#8221; claiming Trump equivocated on running Venezuela—a statement traders say the platform made up.



A prominent trader posted that Polymarket &#8220;decided their fine print rules are going in the trash&#8221; and resolved based on vibes rather than written criteria.&nbsp;



The ruling disproportionately benefited traders in Polymarket&#8217;s affiliate program.



<h3 class="wp-block-heading">Epstein Blackmail Market Resolved Opposite Direction</h3>



Two weeks earlier on Christmas Eve, Polymarket took the opposite approach.&nbsp;



The platform expired an Epstein blackmail market based on strict rule interpretation, resolving &#8220;Yes&#8221; based on a single email that never used the word &#8220;blackmail.&#8221;



The market traded at 4 cents when it was bought to 99 cents and proposed for &#8220;Yes&#8221; at 7:30 AM on December 24. Polymarket clarified at 2 PM that the document &#8220;detailed qualifying blackmail&#8221; despite zero news headlines reporting blackmail evidence was found.



The FBI has stated they haven&#8217;t found evidence of Epstein blackmailing.&nbsp;



Polymarket&#8217;s own rules required either &#8220;clear consensus of credible reporting&#8221; or a &#8220;direct statement,&#8221; neither of which existed.



The inconsistency is stark: Polymarket ignored fine print rules on Venezuela to resolve based on vibes, then strictly interpreted fine print on Epstein to find blackmail that no news organization or law enforcement official agrees with.



<h3 class="wp-block-heading">Why This Matters For Tariff Market Credibility</h3>



The Venezuela and Epstein controversies raise questions about whether Polymarket&#8217;s 25% odds on Trump&#8217;s <a href="https://www.benzinga.com/crypto/cryptocurrency/26/01/49819039/trump-tariffs-allowed-to-stand-for-now-but-polymarket-traders-predict-only-25-chance-of-scotus-approval">tariffs</a> reflect genuine market sentiment or potential manipulation through selective rule enforcement.



The Supreme Court did not issue a ruling Friday on Trump&#8217;s tariffs, extending uncertainty over the administration&#8217;s use of emergency powers.&nbsp;



Traders betting on the tariff outcome face not just legal uncertainty but also platform resolution risk if Polymarket applies inconsistent standards to determine what constitutes a Trump victory or loss.



Image: Shutterstock

Polymarket 'Decided Their Fine Print Rules Are Going In The Trash' On Venezuela, Millionaire Trader Criticizes

Crypto markets have opened 2026 on a much stronger footing after months of weakness, with altcoins and meme coins rebounding and overall sentiment improving.



What Happened: According to Santiment <a href="https://x.com/santimentfeed/status/2009485951530107258">data</a>, improving retail sentiment across major crypto assets is being driven less by hype cycles and more by macro forces, ETF flows, and positioning dynamics.



Bitcoin <a class="ticker-link" data-ticker="BTC" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/BTC-USD" target="_blank" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</a>, up around 3% on the week, is increasingly behaving like a macro asset. 



Price action is now closely tied to spot ETF flows, U.S. economic data, and interest rate expectations rather than crypto-native narratives. 



While selling pressure has eased and sentiment has improved, $90,000 remains a key psychological level. 



Santiment notes that a deeper pullback into the mid-to-high $80,000s could briefly reignite retail fear, potentially setting up a stronger move later in the year.



Ethereum <a href="https://www.benzinga.com/quote/ETH-USD" target="_blank" class="ticker-link" data-ticker="ETH" data-exchange="CRYPTO" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/eth/usd">ETH</a>)</a>, up roughly 3.7%, is seeing growing interest in staking through regulated products, but sentiment remains fragmented. ETH continues to lack a dominant narrative or clear momentum breakout, keeping optimism muted despite relative strength.



XRP <a href="https://www.benzinga.com/quote/XRP-USD" target="_blank" class="ticker-link" data-ticker="XRP" data-exchange="CRYPTO" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/xrp/usd">XRP</a>)</a> surged nearly 14% early in 2026, fuelled by escrow-related supply dynamics and concentrated trader attention. However, Santiment notes that optimism turned premature as dip buyers underestimated the correction. A revisit toward the $2.00 level could reignite fear, uncertainty, and doubt among retail traders.



Binance Coin <a href="https://www.benzinga.com/quote/BNB-USD" target="_blank" class="ticker-link" data-ticker="BNB" data-exchange="CRYPTO" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/bnb/usd">BNB</a>)</a> up about 3.5%, has benefited from improving regulatory clarity following Binance's transition to Abu Dhabi Global Market oversight and a steady post-holiday recovery. Santiment suggests meaningful retail excitement may only return if BNB approaches the $1,000 level again.



Solana <a class="ticker-link" data-ticker="SOL" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/SOL-USD" target="_blank" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/sol/usd">SOL</a>)</a> gained nearly 10% on the week as renewed institutional interest reinforced its positioning beyond a purely retail-driven asset. 



Sentiment has turned sharply positive after SOL revisited the $140 level, with traders widely viewing $143 as a critical breakout zone that could unlock further upside if cleared.



Dogecoin <a class="ticker-link" data-ticker="DOGE" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/DOGE-USD" target="_blank" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/doge/usd">DOGE</a>)</a>, up more than 13% weekly, has reclaimed leadership in the meme-coin space. 



The rally has been supported by strong performance in the 21Shares 2x Long Dogecoin ETF, which has delivered approximately 38%–39% gains in the opening days of 2026. 



After sentiment bottomed out at the start of the year, DOGE's rebound has sharply punished December panic sellers.



Why It Matters: Santiment points out that retail sentiment remains a key contrarian signal, as crowd optimism or fear often precedes opposite price moves, while whales continue to operate quietly.



Recent sentiment anomalies have appeared, but as Bitcoin tests the $90,000 level and prices consolidate, shifts in crowd psychology are becoming more apparent across major assets.



Image: Shutterstock

3 Reasons Why Bitcoin, ETH, XRP Sentiment Is Turning Bullish In 2026

The U.S. Supreme Court did not issue a ruling Friday on President Donald Trump&#8217;s sweeping global tariffs, as traders price in a 75% chance that the Supreme Court ultimately rules in favor of Trump&#8217;s tariffs.



<h3 class="wp-block-heading">Polymarket Shows 25% Odds Trump Wins Tariff Case</h3>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="595" src="https://editorial-assets.benzinga.com/wp-content/uploads/2026/01/09114809/image-125-1024x595.png" alt="" class="wp-image-1251723" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2026/01/09114809/image-125-1024x595.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2026/01/09114809/image-125-300x174.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2026/01/09114809/image-125-768x446.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2026/01/09114809/image-125.png 1456w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



The court has not <a href="https://www.reuters.com/legal/government/supreme-court-set-issue-rulings-trump-awaits-fate-tariffs-2026-01-09/">announced</a> when it will decide the case.



Trump invoked the International Emergency Economic Powers Act (IEEPA) to impose &#8220;reciprocal&#8221; tariffs on goods from nearly every foreign trading partner, citing trade deficits as a national emergency.



He used the same law for duties on China, Canada, and Mexico, citing fentanyl trafficking.



Trump imposed the duties by invoking a 1977 law meant for national emergencies, and lower courts ruled he exceeded his authority.&nbsp;



The administration appealed those rulings, setting up the current Supreme Court review.



<h3 class="wp-block-heading">$150B In Refunds At Stake For Major Companies</h3>



Company executives, customs brokers, and trade lawyers are bracing for a potential fight over $150 billion in refunds from the U.S. government for duties already paid if Trump loses.



Major companies that have <a href="https://www.reuters.com/business/autos-transportation/global-companies-that-have-sued-the-us-government-tariff-refunds-2026-01-09/">filed</a> lawsuits challenging the tariffs and seeking refunds include Costco Wholesale Corp. <a href="https://www.benzinga.com/quote/COST" target="_blank" class="ticker-link" data-ticker="COST" data-exchange="NASDAQ" rel="noopener">(NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/COST">COST</a>)</a>, Alcoa Corp. <a href="https://www.benzinga.com/quote/AA" target="_blank" class="ticker-link" data-ticker="AA" data-exchange="NYSE" rel="noopener">(NYSE:<a class="ticker" href="https://www.benzinga.com/quote/AA">AA</a>)</a>, EssilorLuxottica SA <a href="https://www.benzinga.com/quote/EL" target="_blank" class="ticker-link" data-ticker="EL" data-exchange="NYSE" rel="noopener">(NYSE:<a class="ticker" href="https://www.benzinga.com/quote/EL">EL</a>)</a>, Goodyear Tire &amp; Rubber Co. <a href="https://www.benzinga.com/quote/GT" target="_blank" class="ticker-link" data-ticker="GT" data-exchange="NASDAQ" rel="noopener">(NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/GT">GT</a>)</a>, BorgWarner Inc. <a href="https://www.benzinga.com/quote/BWA" target="_blank" class="ticker-link" data-ticker="BWA" data-exchange="NYSE" rel="noopener">(NYSE:<a class="ticker" href="https://www.benzinga.com/quote/BWA">BWA</a>)</a>, GoPro Inc. <a href="https://www.benzinga.com/quote/GPRO" target="_blank" class="ticker-link" data-ticker="GPRO" data-exchange="NASDAQ" rel="noopener">(NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/GPRO">GPRO</a>)</a>, and Revlon Inc.



Dole Fresh Fruit Company filed Jan. 2, seeking a declaration that IEEPA tariffs were unlawful, a full refund for all tariffs paid, and an injunction preventing future tariffs. 



J.Crew Group filed Jan. 6 seeking similar protections.



Toyota subsidiaries, Bumble Bee Foods, Kawasaki Motors Manufacturing, Yokohama Tire, and Yamazaki Mazak also filed protective suits to preserve refund rights.



<h3 class="wp-block-heading">Why Bitcoin Traders See Tariff Loss As Bullish</h3>



Crypto traders argue that striking down Trump&#8217;s tariffs would provide multiple catalysts for Bitcoin <a href="https://www.benzinga.com/quote/BTC-USD" target="_blank" class="ticker-link" data-ticker="BTC" data-exchange="CRYPTO" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</a> and risk assets. 



Market clarity would <a href="https://x.com/kyledoops/status/2009543178911912239?s=20">improve</a> as $130 billion+ in annual tariff revenue faces legal challenge.



Cost pressures would ease for corporations, improving earnings outlooks.&nbsp;



The removal of tariff uncertainty would <a href="https://x.com/FefeDemeny/status/2009547662211584348?s=20">allow</a> risk-on capital flows to return to growth assets like Bitcoin and tech stocks.



Trump acknowledged the stakes, saying in a Jan. 2 social media post that a Supreme Court ruling against the tariffs would be a &#8220;terrible blow&#8221; to the United States. 



He has argued tariffs made the country stronger financially.



<h3 class="wp-block-heading">Partial Rollback More Likely Than Clean Outcome</h3>



Even if the court strikes down tariffs imposed under IEEPA, other duties imposed under different statutes would remain in force. Any rollback would likely be partial, slow, and messy rather than an immediate removal of all trade barriers.



The challenge marks a major test of presidential powers and the court&#8217;s willingness to check Trump&#8217;s far-reaching assertions of authority.&nbsp;



The outcome will impact the global economy beyond just Bitcoin price action.



Image: Shutterstock

Trump Tariffs Allowed To Stand For Now, But Polymarket Traders Predict Only 25% Chance Of SCOTUS Approval

President Donald Trump told The New York Times he will not pardon former FTX CEO Sam Bankman-Fried, who is serving 25 years for fraud and conspiracy, despite granting clemency to other crypto figures including Binance founder Changpeng &#8220;CZ&#8221; Zhao and Ross Ulbricht.



<h3 class="wp-block-heading">SBF&#8217;s Parents Lobbied Trump&#8217;s Orbit Without Success</h3>



Bankman-Fried&#8217;s parents, former Stanford Law School professors Barbara Fried and Joseph Bankman, <a href="https://www.nytimes.com/live/2026/01/08/us/trump-nyt-interview?campaign_id=190&amp;emc=edit_ufn_20260108&amp;instance_id=168996&amp;nl=from-the-times&amp;regi_id=259385888&amp;segment_id=213375&amp;user_id=ba4f88c24731247af4d2d75cbbbba1e1#trump-family-foreign-business-deals">reportedly</a> met with lawyers and others in Trump&#8217;s orbit attempting to secure a pardon.&nbsp;



The lobbying campaign failed to sway Trump, who is a major political backer of the Bitcoin <a href="https://www.benzinga.com/quote/BTC-USD" target="_blank" class="ticker-link" data-ticker="BTC" data-exchange="CRYPTO" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</a> and digital assets entrepreneur.



SBF conducted a Republican-friendly media rehabilitation tour in recent months and repeatedly praised Trump&#8217;s pardon of former Honduran president Juan Orlando Hernández for cocaine importation.&nbsp;



However, the strategy didn&#8217;t work.



Bankman-Fried donated $5.2 million to the Biden campaign in 2020, potentially creating political complications for a Trump pardon. 



He&#8217;s currently appealing his conviction and is housed at Metropolitan Detention Center in Brooklyn, reportedly in the same dormitory as rapper Sean &#8220;Diddy&#8221; Combs, who also won&#8217;t receive clemency.



<h3 class="wp-block-heading">Trump Pardoned Three Other Major Crypto Figures</h3>



Trump&#8217;s refusal to pardon SBF stands in sharp contrast to his clemency for other crypto industry figures.&nbsp;



In January 2025, Trump <a href="https://www.benzinga.com/crypto/cryptocurrency/26/01/49668012/trump-pardoned-3-crypto-felons-in-10-months-heres-what-each-one-cost">freed</a> Ross Ulbricht, Silk Road&#8217;s founder who served over a decade for facilitating $1 billion in illegal drug transactions.



In March, Trump pardoned BitMEX co-founders Arthur Hayes, Benjamin Delo, Samuel Reed, and Gregory Dwyer, who violated anti-money laundering laws.



The most controversial pardon came in October when Trump freed Binance founder CZ, who had pleaded guilty to enabling money laundering and paid $50 million in fines.&nbsp;



Critics including Congresswoman Maxine Waters (D-CA) and Senator Elizabeth Warren (D-mass.) alleged corruption, noting Binance invested $2 billion in Trump&#8217;s World Liberty Financial project <a class="ticker-link" data-ticker="WLFI" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/WLFI-USD" target="_blank" rel="noopener">(CRYPTO: WLFI)</a>.



That investment potentially generates $48-52 million annually for Trump&#8217;s family.&nbsp;



Binance also spent $800,000 lobbying for clemency, though CZ denied any quid pro quo arrangement.



<h3 class="wp-block-heading">Why Trump Drew The Line At SBF</h3>



The distinction between SBF and the pardoned crypto figures appears to center on the nature of their crimes and political optics.&nbsp;



Ulbricht&#8217;s Silk Road case became a libertarian cause célèbre over harsh sentencing. The BitMEX founders faced regulatory violations rather than customer fraud.



CZ&#8217;s Binance case involved regulatory failures but not direct customer theft. SBF&#8217;s FTX collapse, by contrast, resulted in $8 billion in customer losses through fraud and misappropriation of funds.



Trump defended his pro-crypto stance in the Times interview, saying it helped him win votes and that he has &#8220;come to like crypto.&#8221;&nbsp;



The comment suggests Trump views the crypto industry as politically valuable, but won&#8217;t extend that support to figures convicted of stealing customer money.



The SBF rejection also avoids the appearance of pardoning someone who donated millions to Democrats, which could create backlash among Trump&#8217;s base despite SBF&#8217;s recent Republican outreach.



Image: Shutterstock

Trump Pardoned Ross Ulbricht And Changpeng Zhao, But Won't Touch SBF — Here's Why

Pudgy Penguins <a class="ticker-link" data-ticker="PENGU" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/PENGU-USD" target="_blank" rel="noopener">(CRYPTO: PENGU)</a> jumped 19% over the past week, outperforming meme coin peers such as Dogecoin <a class="ticker-link" data-ticker="DOGE" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/DOGE-USD" target="_blank" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/doge/usd">DOGE</a>)</a> and Shiba Inu <a class="ticker-link" data-ticker="SHIB" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/SHIB-USD" target="_blank" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/shib/usd">SHIB</a>)</a>.



<figure class="wp-block-table"><table class="has-fixed-layout"><tbody><tr><td>Cryptocurrency</td><td>Ticker</td><td>Price</td><td>Market Cap</td><td>7-Day Trend</td></tr><tr><td>Pudgy Penguins</td><td>(CRYPTO: PENGU)</td><td>$0.01201</td><td>$755 million</td><td>+18.8%</td></tr><tr><td>Dogecoin</td><td>(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/doge/usd">DOGE</a>)</td><td>$0.1390</td><td>$23.4 billion</td><td>+5.9%</td></tr><tr><td>Shiba Inu</td><td>(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/shib/usd">SHIB</a>)</td><td>$0.058705</td><td>$5.12 billion</td><td>+12.3%</td></tr></tbody></table></figure>



Trader Notes: Altcoin Sherpa <a href="https://x.com/AltcoinSherpa/status/2009171114136584212">described</a> PENGU as a "promising reversal setup," pointing to an inverted head-and-shoulders pattern forming at higher-time-frame support. 



The trader said the move may require patience but views the potential rebound as one of the higher-priority trade setups this year.



MacroCRG <a href="https://x.com/MacroCRG/status/2009246813006504428">said</a> PENGU is trading at a solid level and confirmed he has started buying at current prices, with plans to add more if the token pulls back toward the $0.0112 area.



Kook Capital <a href="https://x.com/KookCapitalLLC/status/2008615129928396947">noted</a> that Pudgy Penguins dominated the brand and IP narrative last year and led the meme category. 



He added that the lows appear to be in, the breakout has begun, and PENGU could push beyond its all-time high. "2026 is the year of the penguin," he said, calling it one of the easiest holds outside of Bitcoin.



Statistics: PENGU is trading at an estimated 16.6-times revenue multiple based on roughly $50 million in Walmart sales, trader aixbt <a href="https://x.com/aixbt_agent/status/2008511626451054680">stated</a>. 



By comparison, Build-A-Bear generates about $500 million in annual revenue and trades at roughly a 0.6-times multiple.



The disparity suggests PENGU could face a sharp repricing if investors reassess the valuation implied by its token price.



Community News: Crypto investor Conor Kenny <a href="https://x.com/conorfkenny/status/2009264664929022073">said</a> the U.S. Securities and Exchange Commission has delayed a decision on Canary Capital's proposed PENGU ETF, a hybrid fund that would hold both PENGU tokens and Pudgy Penguins NFTs. 



Regulators are seeking more time to evaluate how NFT-based assets should be valued and custodied.



Image: Shutterstock

Pudgy Penguins Spikes 19% In A Week: Why Do DOGE, SHIB Lag Behind?

Stablecoins became the backbone of crypto long before most people noticed. By 2025, they were quietly moving more value on-chain than Bitcoin &nbsp;<a href="https://www.benzinga.com/quote/BTC-USD">(CRYPTO:BTC</a>) and Ethereum (<a href="https://www.benzinga.com/quote/ETH-USD">CRYPTO:ETH</a>) combined, while powering trading, lending, and payments across DeFi. Regulators are only now catching up. As U.S. lawmakers move closer to a unified framework often grouped under proposals referred to as the "GENIUS Act," the rules governing stablecoins are starting to solidify.



For investors, this shift is not a minor regulatory detail. Stablecoin rules will directly influence DeFi liquidity, protocol revenues, and which assets remain usable across major platforms. The debate is no longer about if regulation is coming. It is about what happens to capital flows once those rules are in place.



<h2 class="wp-block-heading">Why Stablecoins Matter More Than Most Investors Realize</h2>



Stablecoins are not just convenient trading pairs. They function as the base currency of DeFi. Loans are priced in stablecoins, trades are settled through them, and most yield strategies depend on them to move capital efficiently. When stablecoin liquidity grows, DeFi activity follows. When it shrinks, activity slows almost immediately.



By late 2025, stablecoins were processing trillions of dollars in annual on-chain volume. Ethereum remained the primary settlement layer for that activity, even as transactions increasingly shifted to Layer 2 networks. This flow supports demand for ETH as collateral and settlement infrastructure, regardless of short-term fee levels.



This is why stablecoin regulation has more impact on DeFi than price volatility ever did.



<h2 class="wp-block-heading">What U.S. Regulation Is Actually Targeting</h2>



Despite alarming headlines, most U.S. stablecoin proposals focus on issuers rather than decentralized protocols. Draft frameworks debated through 2024 and 2025 generally revolve around three ideas:



<ul class="wp-block-list">
<li>Full reserve backing with cash or short-term Treasuries</li>



<li>Regular audits and transparent disclosures</li>



<li>Clear licensing and supervisory oversight</li>
</ul>



The goal is to prevent another Terra-style collapse while making stablecoins usable inside traditional finance. These rules do not directly regulate DeFi protocols, but they strongly shape which stablecoins those protocols can safely rely on.



For issuers like Circle, whose USDC already follows many of these standards, the transition is manageable. For algorithmic or lightly backed stablecoins, it could threaten their survival.



<h2 class="wp-block-heading">A Split Between "Compliant" And "Peripheral" Liquidity</h2>



Regulation is already dividing stablecoin liquidity. In Europe, the EU's Markets in Crypto-Assets framework forced exchanges to restrict or delist stablecoins that failed to meet reserve and governance standards. Liquidity fractured across regions, and compliant issuers gained an advantage.



The U.S. is likely to move in the same direction. If federal rules define which stablecoins banks, brokers, and custodians can interact with, DeFi protocols will face a clear choice. Either adapt to compliant liquidity or accept shrinking access to capital. Institutional money does not operate in legal gray zones.



<h2 class="wp-block-heading">How DeFi Protocols Are Being Forced To Adapt</h2>



DeFi platforms are already adjusting, mostly without much fanfare. Many protocols now prioritize USDC over USDT in key liquidity pools, even when yields are slightly lower. Some are diversifying treasury holdings to reduce dependence on single issuers. Others are experimenting with native stablecoins backed by short-term government debt.



Compliance, however, comes with tradeoffs. Audits, redemption rules, and oversight introduce friction into systems designed for speed and flexibility. Yield opportunities narrow as capital becomes safer but less adaptable.



This tension is unavoidable. DeFi cannot scale using institutional capital without adopting institutional constraints.



<h2 class="wp-block-heading">Ethereum's Role As The Settlement Layer Remains Central</h2>



Despite fragmentation, Ethereum continues to benefit. Most regulated stablecoins still settle on Ethereum, even when execution happens on Layer 2 networks. That keeps Ethereum positioned as the neutral settlement layer for compliant on-chain finance, supporting long-term demand for ETH even as fees remain subdued.



For investors, this is more important than daily gas metrics. Stablecoin settlement reinforces Ethereum's role as infrastructure, even if value capture becomes less direct. This dynamic increasingly shows up in how ETH trades relative to the broader crypto market.



<h2 class="wp-block-heading">Winners And Losers Emerging In Public Markets</h2>



Public companies are also being affected. Coinbase, which has leaned heavily into compliant stablecoin infrastructure and custody, is positioned to benefit if regulated flows accelerate. Stablecoin settlement and on-chain services are becoming more central to its business, a shift reflected in COIN's trading behavior.



Payment companies experimenting with stablecoins, including PayPal, also stand to gain from regulatory clarity. Clear rules allow these firms to integrate stablecoins into mainstream payment systems without reputational risk. Investors following this theme often track PYPL alongside crypto-native names.



Projects tied to opaque or weakly backed stablecoins face the opposite outcome: declining relevance.



<h2 class="wp-block-heading">Liquidity Will Not Disappear, But It Will Move</h2>



A common mistake is assuming regulation will drain liquidity from DeFi. History suggests otherwise. Capital rarely disappears when rules change. It relocates.



In this case, that likely means fewer stablecoins, deeper liquidity around compliant assets, and tighter connections between DeFi and traditional finance. This also helps explain why Bitcoin, which does not depend on stablecoin mechanics in the same way, continues to attract institutional capital through regulated vehicles like ETFs.



<h2 class="wp-block-heading">The Tradeoff DeFi Cannot Escape</h2>



Stablecoin regulation forces DeFi to confront a basic reality. Permissionless systems are excellent at innovation, but large pools of capital require predictability. Regulation reduces extreme risk, while also limiting upside from inefficiencies.



For users, that means safer but less dramatic yields. For protocols, slower growth paired with greater durability. For investors, it changes how DeFi should be valued. Liquidity becomes more stable, but less speculative.



<h2 class="wp-block-heading">What Investors Should Watch In 2026</h2>



Several indicators matter more than political headlines.



Watch which stablecoins dominate total value locked across major protocols. Track how often regulated institutions interact directly with on-chain systems rather than relying on intermediaries. Pay closer attention to Ethereum's settlement and data revenues instead of raw transaction counts.



Finally, monitor how quickly regulatory clarity spreads internationally. Fragmentation persists as long as rules differ across regions.



<h2 class="wp-block-heading">The Bottom Line For Investors</h2>



Stablecoin regulation does not signal the end of DeFi. It marks the end of DeFi operating outside the regulatory system. Liquidity will concentrate around fewer assets, protocols will become more conservative, and speculative yield will give way to infrastructure-driven returns. That favors durability over experimentation.



For investors, the takeaway is simple:



<ul class="wp-block-list">
<li>Expect lower risk, lower yields, and greater institutional participation</li>



<li>Treat DeFi exposure as infrastructure, not a lottery ticket</li>



<li>Focus on assets and platforms that benefit from compliant liquidity</li>
</ul>



The next phase of DeFi will not be defined by resisting regulation, but by adapting to it. The protocols that survive this shift are likely to matter far longer than those that thrived during chaos.



Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga&#8217;s reporting and has not been edited for content or accuracy.

Stablecoin Regulation After The GENIUS Act: What It Means For DeFi Liquidity In 2026

Bitcoin <a href="https://www.benzinga.com/quote/BTC-USD" target="_blank" class="ticker-link" data-ticker="BTC" data-exchange="CRYPTO" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</a> is undergoing a notable shift beneath the surface of daily price action, as the amount of Bitcoin held on centralized exchanges continues to decline to levels last seen several years ago. The ongoing drawdown in exchange reserves reflects deeper changes in how the asset is held, traded, and valued as the market matures.



<h2 class="wp-block-heading">Exchange Reserves Drop To Critical Levels</h2>



On-chain data from multiple analytics providers indicates that Bitcoin balances on centralized exchanges have fallen into an estimated range of 2.4 million to 2.8 million BTC as of early January 2026. This marks a meaningful reduction from prior cycle highs, when exchange reserves exceeded 3 million BTC around 2020.



The steady removal of hundreds of thousands of Bitcoin from exchanges over the past several years represents one of the most persistent supply-side shifts in Bitcoin's trading history. While reserve estimates vary slightly depending on methodology, the directional trend remains consistent across data sources.



Exchange outflows have become more pronounced over the past two years, with platforms such as Coinbase Global Inc. <a href="https://www.benzinga.com/quote/COIN" target="_blank" class="ticker-link" data-ticker="COIN" data-exchange="NASDAQ" rel="noopener">(NASDAQ:<a class="ticker" href="https://www.benzinga.com/quote/COIN">COIN</a>)</a>, Binance, and Kraken experiencing continued net reductions in Bitcoin balances. These movements suggest that both retail and institutional holders are increasingly opting for long-term storage solutions rather than keeping assets on trading venues.



<h2 class="wp-block-heading">What Shrinking Reserves Mean For Market Dynamics</h2>



As Bitcoin supply migrates away from exchanges, market liquidity dynamics are changing. With fewer coins available on exchange order books, the balance between buyers and sellers is increasingly shaped by off-exchange activity.



Several factors are contributing to this shift. Broader adoption of cold storage, hardware wallets, and regulated custodial services has made long-term holding more practical and secure. At the same time, the expansion of spot Bitcoin exchange-traded funds has provided investors with exposure that does not rely on maintaining balances on cryptocurrency exchanges.



Institutional investors and high net worth individuals are now more comfortable holding Bitcoin outside exchange environments, reflecting growing confidence in custody infrastructure and long-term asset preservation.



<h2 class="wp-block-heading">Liquidity Tightening Creates New Trading Environment</h2>



The decline in exchange-held Bitcoin has contributed to a tighter liquidity backdrop, where price movements can become more sensitive to changes in demand. When available supply on exchanges is limited, price reactions to buying or selling pressure can become more pronounced.



This pattern has been visible during several market moves over the past year, where relatively modest exchange volumes coincided with sharp price fluctuations. Reduced order book depth requires larger participants to approach execution more cautiously.



To manage this environment, institutional traders increasingly turn to over-the-counter desks and negotiated transactions, allowing them to move sizable positions without materially impacting public exchange prices.



<h2 class="wp-block-heading">Institutional Adoption Drives Custody Changes</h2>



Institutional participation has played a central role in reshaping Bitcoin custody practices. Spot Bitcoin ETFs offered by asset managers such as BlackRock Inc. <a href="https://www.benzinga.com/quote/BLK" target="_blank" class="ticker-link" data-ticker="BLK" data-exchange="NYSE" rel="noopener">(NYSE:<a class="ticker" href="https://www.benzinga.com/quote/BLK">BLK</a>)</a>, Fidelity Investments, and Invesco Ltd. <a href="https://www.benzinga.com/quote/IVZ" target="_blank" class="ticker-link" data-ticker="IVZ" data-exchange="NYSE" rel="noopener">(NYSE:<a class="ticker" href="https://www.benzinga.com/quote/IVZ">IVZ</a>)</a> collectively hold significant Bitcoin positions through qualified custodians rather than exchange wallets.



These custody arrangements emphasize regulatory oversight, insurance protections, and enhanced security standards. As institutional exposure continues to grow, a larger share of Bitcoin supply is being absorbed into long-duration custodial structures.



Corporate balance sheet adoption has also influenced exchange reserve trends. Companies that allocate Bitcoin as a treasury asset typically store holdings in cold storage or institutional custody rather than leaving them on exchanges.



<h2 class="wp-block-heading">Implications For Price Discovery Mechanisms</h2>



Bitcoin's price discovery process is gradually becoming more distributed. As exchange balances represent a smaller portion of circulating supply, pricing signals increasingly reflect a mix of exchange trading activity, ETF flows, and off-exchange transactions.



This evolution mirrors traditional financial markets, where a substantial share of trading volume occurs outside centralized exchanges. Bitcoin is moving toward a hybrid market structure where multiple liquidity venues contribute to price formation.



Decentralized exchanges and peer-to-peer platforms are also gaining attention, though they track and report liquidity differently than centralized platforms. As a result, measuring immediately tradable Bitcoin supply has become more complex.



<h2 class="wp-block-heading">Technical Analysis And Market Sentiment</h2>



On-chain data suggests that much of the Bitcoin leaving exchanges is flowing into long-term holder wallets. Addresses that have not moved Bitcoin for more than one year are estimated to control between 65 percent and 70 percent of the circulating supply, depending on analytical methodology.



Historically, elevated long-term holding levels have been associated with reduced selling pressure. When demand increases under these conditions, price movements can accelerate due to limited available supply.



Investor sentiment data also points to a shift in behavior, with both retail and institutional participants increasingly treating Bitcoin as a long-term allocation rather than a short-term trading asset.



<h2 class="wp-block-heading">Regulatory Environment And Exchange Operations</h2>



Regulatory developments continue to shape how market participants interact with cryptocurrency exchanges. Expanded compliance requirements, reporting obligations, and custody standards have encouraged some users to prioritize self-custody or institutional-grade storage.



Exchanges have responded by enhancing security features and custody services, but the trade-off between centralized convenience and direct asset control remains a defining consideration. For many Bitcoin advocates, declining exchange balances align with the network's original principles of user sovereignty.



<h2 class="wp-block-heading">Market Participants Adapt To New Reality</h2>



Professional traders and liquidity providers are adjusting strategies to reflect evolving market conditions. Algorithmic models increasingly factor in thinner order books, while institutions rely on more advanced execution techniques to manage market impact.



The changing structure has also supported growth among specialized service providers. Custody platforms, OTC desks, and liquidity aggregation services are seeing increased demand as participants seek efficient ways to transact outside traditional exchange order books.



Retail investors are adapting as well, with a growing number opting to store Bitcoin in personal wallets. Improvements in wallet design and broader awareness of security practices have lowered the barrier to self-custody.



<h2 class="wp-block-heading">Looking Ahead</h2>



The downward trend in Bitcoin exchange reserves has remained intact into early 2026, supported by institutional participation, expanding custody options, and regulatory evolution. While short-term fluctuations may occur, the longer-term trajectory reflects a maturing market structure.



This shift creates new considerations for traders operating in a lower-liquidity environment, while long-term holders may benefit from reduced immediate selling pressure as more supply remains locked in storage.



As Bitcoin continues its transition into a more established financial asset, changes in custody distribution and trading behavior will remain central to market dynamics. The sustained decline in exchange reserves represents a defining phase in Bitcoin's evolution toward a more diversified and institutionalized market.



Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga&#8217;s reporting and has not been edited for content or accuracy.

Bitcoin Exchange Balances Are Falling As Market Structure Evolves

Ark Invest&#8217;s CEO Cathie Wood predicts President Donald Trump will start buying Bitcoin <a class="ticker-link" data-ticker="BTC" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/BTC-USD" target="_blank" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</a> for the strategic reserve before the 2026 midterms to maintain political momentum and crypto voter support.



<h3 class="wp-block-heading">Trump Doesn&#8217;t Want To Be A Lame Duck</h3>



In an interview published on Thursday, Wood <a href="https://www.youtube.com/watch?v=7vlo6rj_bo8">identified</a> three key motivations driving Trump toward strategic reserve purchases. 



First, he wants to avoid becoming a lame duck president in his final two years. Presidents who lose midterms typically lose their ability to pass legislation and advance their agenda.



Second, Trump&#8217;s family has significant investments in Bitcoin and crypto assets.&nbsp;



Several digital asset investment vehicles performed poorly in 2025, creating pressure to support the market through government action.



Third, the crypto community played a decisive role in Trump&#8217;s 2024 election victory.&nbsp;



Maintaining that support requires delivering on promises, including building a strategic Bitcoin reserve and passing the de minimis tax exemption that allows small Bitcoin transactions without capital gains taxes.



Wood expects Trump to work with his crypto and AI czar to push both initiatives forward.&nbsp;



The original plan called for owning 1 million Bitcoin, but the current reserve only holds seized assets from criminal cases.



<h3 class="wp-block-heading">GDP Growth Creates Budget Space For Purchases</h3>



The administration faces one major constraint: White House AI and crypto czar David Sacks has said Bitcoin purchases must be budget neutral, meaning they can&#8217;t increase the deficit.



Wood believes the administration will find workarounds through stronger-than-expected economic growth.&nbsp;



The One Big Beautiful Bill <a href="https://www.benzinga.com/crypto/cryptocurrency/25/07/46392541/how-donald-trumps-big-beautiful-bill-was-a-big-beautiful-boost-for-bitcoin">dropped</a> the effective U.S. corporate tax rate to 10%—the lowest in the developed world. The bill also includes 100% first-year depreciation for manufacturing facilities that break ground by the end of 2028.



These tax changes should drive significant GDP growth, which increases tax revenue and creates fiscal space for Bitcoin purchases without technically violating budget neutrality.&nbsp;



Wood expects the administration to use this flexibility to justify strategic reserve buying.



<h3 class="wp-block-heading">U.S. Buying Could Trigger Global Race</h3>



Wood said U.S. government buying would force other countries to reconsider their reserve strategies, potentially triggering the sovereign adoption wave Ark has anticipated for years. 



The move would signal that nations no longer need to remain entirely dependent on the dollar.



This shift could create turbulence for emerging market currencies as governments reallocate reserves. 



She believes the global monetary system will ultimately consolidate around two currencies: the dollar (supported by stablecoins) and Bitcoin.



<h3 class="wp-block-heading">Wood Still Optimistic Despite 2025 Volatility</h3>



The key question is whether the four-year cycle still applies and if $80,000 was the low.&nbsp;



Wood said getting through this cycle with a 30%+ drop instead of 50-70% would be a victory and consistent with Bitcoin&#8217;s declining volatility over time.



Lower volatility makes Bitcoin more attractive to institutional allocators and government treasuries.



Wood also noted that stablecoins have taken over some payment use cases Ark originally expected Bitcoin to fill, particularly in emerging markets.&nbsp;



However, gold&#8217;s strong 2025 performance reinforces Bitcoin&#8217;s role as digital gold and more than compensates for the stablecoin competition.



Image: Shutterstock

Trump 'Has All Kinds Of Reasons' To Buy Bitcoin Before Midterms, Cathie Wood Says

InfoFi arrived last year with a big ambition: put a price on information itself. Platforms rewarded users for commentary and social engagement, transforming posts and attention into tradeable value. The model took off, but now as spam rises and yields start to shrink, it faces its first real test.



In 2026, InfoFi is <a href="https://cryptorank.io/insights/research/complete-guide-to-infofi-kaito-polymarket-cookie-galxe" rel="nofollow">still bubbling</a>, but splitting. One side of the market is drifting toward content arbitrage, where posts become inventory and the focus is on engagement and rewards. The other is evolving into signal infrastructure that filters, ranks, and verifies information before it reaches markets, rewarding credibility over volume.



That divergence is re-shaping the market, and the opportunity.



<h2 class="wp-block-heading">From Attention Trade to Incentive Compression</h2>



The first wave of InfoFi platforms gained traction by rewarding users for producing and amplifying content. Tools like Kaito AI scored and tokenized social engagement, narratives, and even sentiment. Others followed, including Galxe <a href="https://www.benzinga.com/quote/GAL-USD" target="_blank" class="ticker-link" data-ticker="GAL" data-exchange="CRYPTO" rel="noopener">(CRYPTO: GAL)</a> and creator-focused platforms like Cookie DAO.



Yield arrived in the form of tokens or points earned for activity. The result was explosive growth. But as participation scaled, the signal-to-noise ratio collapsed. Cheap AI slop made content abundant, but shredded its value.&nbsp;



As posting volume surged, insight diluted and yields began to shrink.



<h2 class="wp-block-heading">A Web3 Category Splits in Two</h2>



What's emerging now looks less like a second hype cycle and more like a bifurcation.



On one side is content arbitrage. These models lean into automation, SEO-style optimization, and short-term engagement metrics. The economics resemble earlier SocialFi and airdrop-farming cycles: fast participation, reflexive demand, and high churn. Tokens tied to these systems tend to trade as momentum assets rather than long-duration value plays.



On the other side is credibility infrastructure, an effort to price information quality rather than stoke content or attention volume. This includes platforms that perform things like reputation weighting, long-term contributor scoring, or add verification layers that assess signals for credibility.



Notably, some of the same platforms that benefited from the first wave are now trying to move in the second direction.



<h2 class="wp-block-heading">Are Platforms Adjusting or Being Repriced?</h2>



Kaito AI is the category's informal bellwether, and has adjusted its scoring mechanisms to penalize low-quality engagement and reward sustained contribution. The shift hasn't eliminated spam, but it signals where builders think value ultimately accrues.



Cookie DAO has narrowed participation through products like Cookie Snaps, emphasizing selective access and higher-signal creator engagement over open farming. Galxe, long associated with task-based incentives, has also pushed more toward credentialing and reputation-driven use cases.



Other projects, such as Wallchain (no liquid token as of early 2026), are explicitly positioning around quality-over-volume scoring and sustained impact metrics. While these efforts are still early, they point to a broader design pivot away from rewarding pure engagement.



Separately, reputation-centric protocols like Ethos are experimenting with on-chain trust markets, peer reviews, and staking-backed credibility. These systems aren't high-throughput or retail-friendly, but they suggest a different kind of InfoFi endgame.



<h2 class="wp-block-heading">Is This All Just Rebranding?</h2>



Critics remain unconvinced. Analysts have argued that many InfoFi platforms still <a href="https://x.com/zachxbt/status/1997953937488719975">reward AI-generated noise</a>, regardless of updated scoring formulas. If true, reputation risks becoming a marketing message rather than a way to filter information value.



That skepticism matters for investors. A token tied to engagement metrics may struggle to retain value once incentive emissions slow. Any InfoFi platform claiming to price credibility has to prove that downstream users like traders, DAOs, analysts, or institutions can actually rely on its signal.



<h2 class="wp-block-heading">Props, Cons, and Possibilities</h2>



The content-arbitrage track offers:



<ul class="wp-block-list">
<li>Faster user growth</li>



<li>More liquid tokens</li>



<li>Clearer short-term trading setups</li>
</ul>



But it also carries:



<ul class="wp-block-list">
<li>High churn</li>



<li>Weak moats</li>



<li>Constant incentive recalibration</li>
</ul>



The credibility-infrastructure track is the opposite:



<ul class="wp-block-list">
<li>Slower adoption</li>



<li>Less obvious token demand</li>



<li>Fewer retail catalysts</li>
</ul>



But … it offers something rarer in crypto cycles: path dependence. Reputation systems gain value over time. Verification histories can't be forked cheaply. If these layers integrate into prediction markets, governance systems, or research workflows, they may become economically central.



<h2 class="wp-block-heading">The Take Away</h2>



InfoFi&#8217;s initial stutter was a market failure. Incentives were optimized for output instead of judgment. But now it&#8217;s reigning in its early excesses and being repriced.



One branch will continue to look like content farming with better tooling. The other is attempting something harder: turning credibility into infrastructure. History suggests the first path produces faster trades. The second, if it works, could capture longer-term value.



<h3 class="wp-block-heading">Quick Hits:</h3>



Watchlist: Keep an eye on InfoFi platforms attempting to harden signal quality rather than scale engagement. Separately, monitor activity at prediction-market platforms such as Polymarket and Kalshi as downstream arenas where information credibility is tested with capital.



Hot Take: InfoFi's next winners won't be the loudest platforms or fastest-growing leaderboards. They'll be the ones whose outputs consistently influence real decisions like trades, forecasts, governance votes, even if that means slower user growth.



Pro Tip: Follow information that converts into action. Rising prediction-market volume, repeated contributor accuracy, and persistent reputation weighting offer better early signals than posting frequency or reward emissions.



Featured Image Credit: Author



Disclaimer: Not financial advice. Do your own research.



Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga&#8217;s reporting and has not been edited for content or accuracy.

The Bet On InfoFi Is Changing — From Paying For Posts To Pricing Credibility

VanEck released long-term capital market assumptions projecting Bitcoin <a class="ticker-link" data-ticker="BTC" data-exchange="CRYPTO" href="https://www.benzinga.com/quote/BTC-USD" target="_blank" rel="noopener">(CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</a> could reach $2.9 million by 2050 in its base case, implying a 15% compound annual growth rate from current levels near $88,000.



<h3 class="wp-block-heading">Base Case Built On Settlement And Reserve Adoption</h3>



VanEck&#8217;s base case assumes Bitcoin will settle 5-10% of global international trade and 5% of domestic trade by 2050, while central banks allocate 2.5% of their balance sheets to Bitcoin as a reserve asset.



The projection represents a structural shift from speculative asset to institutional monetary instrument.&nbsp;



VanEck models Bitcoin&#8217;s penetration into two markets: global medium of exchange and central bank reserve assets.



The firm&#8217;s bear case projects $130,000 by 2050 (a 2% CAGR), while the bull case targets $53.4 million (a 29% CAGR) if Bitcoin captures 20% of international trade and 10% of domestic GDP.



<h3 class="wp-block-heading">Global M2 Explains 54% Of Bitcoin Price Variance</h3>



VanEck&#8217;s analysis shows that when central banks around the world print more money (measured by M2 money supply), Bitcoin&#8217;s price tends to rise.&nbsp;



This relationship explains over 54% of Bitcoin&#8217;s price movements since 2014.



The firm says Bitcoin responds primarily to expanding money supply and currency debasement, not to tech stock performance as many assume.&nbsp;



In simpler terms: more dollars chasing the same 21 million Bitcoin supply pushes prices higher.



Bitcoin used to move inversely with the U.S. Dollar—when the dollar weakened, Bitcoin rallied.&nbsp;



That relationship has loosened recently, suggesting Bitcoin now reacts more to government spending problems globally rather than just dollar strength.



Short-term price swings are driven by futures trading and leverage.&nbsp;



Futures market activity explains 73% of Bitcoin&#8217;s price variance since October 2020, meaning when traders add or reduce leveraged bets, Bitcoin moves sharply regardless of fundamental news.



<h3 class="wp-block-heading">Onchain Metrics Show Mid-Cycle Position</h3>



VanEck tracks Relative Unrealized Profit (RUP), which measures how much profit holders are sitting on.&nbsp;



The metric currently sits at 0.43, well below the 0.70 level that historically signals market tops. This suggests Bitcoin remains mid-cycle with room to run.



Futures funding rates at 4.9% also indicate balanced sentiment, compared to the 10%+ levels that typically precede reversals.



<h3 class="wp-block-heading">VanEck Recommends 1-3% Strategic Allocation</h3>



VanEck suggests a strategic allocation of 1-3% for diversified portfolios, with allocations up to 20% for high risk-tolerant investors based on historical Sharpe ratio optimization.



Historical backtesting shows a 3% Bitcoin allocation in a traditional 60/40 portfolio yielded the highest return per unit of risk.&nbsp;



Since inception, a 58.5% equity / 38.5% bond / 3% Bitcoin portfolio delivered 13.05% annualized returns with a 1.08 Sharpe ratio, compared to 9.68% returns and 0.88 Sharpe ratio for the standard 60/40.



The firm projects annualized volatility of 40-70% for long-term modeling, though recent realized volatility has compressed toward 27%.&nbsp;



VanEck maintains low to moderate correlation expectations with equities, bonds, and gold over full cycles.



The firm also argues that holding zero Bitcoin exposure creates risk as sovereign debt problems worsen. A small, disciplined allocation provides hedge value against currency debasement without requiring investors to bet the farm on crypto&#8217;s success.



Image: Shutterstock

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