However, the key question for investors remains the same: When could the downturn finally end?

According to market experts, the next recovery in crypto is unlikely to be triggered by a single dramatic event. Instead, it may emerge gradually as several important developments begin to restore confidence across the industry.

1. Regulatory Clarity Through the CLARITY Act

One of the most important developments being watched in the United States is the CLARITY Act, a major legislative proposal aimed at defining how digital assets should be regulated. While other pro-crypto policies have appeared in recent years, this bill is expected to play a decisive role in shaping the regulatory framework.

If the legislation moves forward, it could provide clearer oversight rules for digital assets and encourage banks, asset managers, and payment companies to increase their involvement in the crypto sector. Greater institutional participation could significantly boost market confidence.

2. Improvement in the Macro and Tech Market Environment

Cryptocurrencies remain highly correlated with technology stocks and broader risk assets. When tech markets weaken, crypto often experiences amplified volatility.

For instance, the NASDAQ-100 Technology Sector Index is still down more than 2% year-to-date, reflecting ongoing pressure in the sector. Because of this correlation, many analysts believe that a sustained crypto rally may only begin once the broader macro environment stabilizes and risk appetite returns.

3. Institutional ETF Inflows Returning

Institutional demand has become one of the most influential forces in the crypto market. During 2024 and 2025, strong inflows into Bitcoin ETFs absorbed a substantial portion of market supply.

Recently, however, ETF outflows coincided with the broader market decline. If institutional investors begin allocating capital to these products again, it could signal that Bitcoin prices are once again considered attractive long-term entry points.

4. A New Narrative: Agentic Finance

Another potential catalyst lies in the emergence of new technological narratives. One concept gaining attention is “agentic finance,” which refers to AI-driven software agents capable of autonomously executing financial transactions and managing assets on blockchain networks.

Although the idea is still in its early stages, increasing interest from technology and payment companies could expand blockchain’s real-world use cases.

5. Progress on Quantum-Resistant Security

Concerns about the future impact of quantum computing on blockchain security occasionally resurface in the crypto community. While the threat remains largely theoretical, developers are exploring quantum-resistant cryptographic solutions.

Even incremental progress in this area could help reassure investors worried about long-term infrastructure risks.

6. A More Mature Market Structure

Unlike previous crypto bear markets, the current downturn has not been defined by widespread industry collapses. In earlier cycles—particularly in 2022—major corporate failures triggered cascading crises.

Today, the market appears structurally stronger, with improved infrastructure, greater institutional participation, and relatively lower volatility. These factors could make crypto markets more attractive for long-term investors.

A Gradual Turn Rather Than a Sudden Reversal

Experts emphasize that the next crypto bull cycle may not begin with a single headline event. Instead, recovery could unfold gradually as multiple positive developments accumulate over time.

If these catalysts begin aligning, the end of the current bear market may arrive quietly—driven by growing confidence rather than sudden speculation.

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What Is Tokenization and Why Is It Important?

Tokenization refers to the representation of traditional financial assets as digital tokens on a blockchain. Through this technology, assets such as stocks, bonds, commodities, and other financial instruments can be traded on blockchain networks. The collaboration between Nasdaq and Kraken demonstrates that the boundaries between traditional financial infrastructure and crypto technologies are gradually disappearing. The fact that a major global financial institution like Nasdaq is investing in tokenization technologies highlights the growing institutional interest in the crypto sector. According to experts, this development could contribute to broader adoption of digital assets in the financial industry.

“Tokenization is an important technology that can enable financial assets to be traded faster, more transparently, and more accessibly.”

The partnership between Nasdaq and Kraken is seen as more than just a technological collaboration—it is also considered an important signal about the future of the financial sector. This move indicates that traditional financial institutions are increasingly turning toward blockchain-based infrastructures. In recent years, the cryptocurrency market has been more widely adopted by institutional investors, prompting major financial organizations to become more actively involved in the sector. Tokenization technology is seen as one of the most important components of this transformation.

Possible Impacts on Financial Markets

This partnership could encourage the development of new projects in the tokenization space in the short term. In particular, new technological solutions and platforms may emerge for representing financial assets on blockchain networks. In the medium and long term, tokenization could trigger a broader transformation within the financial industry. The digitization of financial assets could speed up transaction processes, reduce costs, and make global markets more accessible to investors. The partnership between Nasdaq and Kraken is therefore viewed as a significant development demonstrating that crypto technologies may play an increasingly important role not only in digital asset markets but also in the infrastructure of the traditional financial system.

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While the parallel price action between Bitcoin and certain technology stocks appears striking at first glance, the underlying reasons may have more to do with broader macroeconomic conditions than with any structural connection between the two markets.

Shared Sensitivity to Macroeconomic Conditions

One explanation for the recent synchronized movements lies in how both asset classes respond to the same macroeconomic environment. Assets that are sensitive to liquidity conditions and long-term growth expectations often react similarly when global financial conditions shift.

In periods when liquidity improves or risk appetite increases, investors tend to allocate capital toward higher-risk assets that promise potential long-term returns. Both technology equities and Bitcoin often fall into this category. As a result, their prices may rise or fall in tandem, not because they share the same economic drivers, but because they are responding to the same external financial forces.

This suggests that the apparent link between Bitcoin and software stocks may reflect temporary macro influences rather than a lasting convergence between the cryptocurrency market and the technology sector.

Most Bitcoin Price Movements Occur Independently

Data also indicates that Bitcoin’s price behavior cannot be fully explained by movements in the stock market. Although the correlation between Bitcoin and software stocks has increased in recent months—particularly after Bitcoin reached a new all-time high above $126,000 in early October—similar increases have also been observed with broader equity indices.

Both the S&P 500 and the Nasdaq have shown rising correlations with Bitcoin during this period. This pattern implies that the change is not unique to technology stocks but instead reflects broader market dynamics.

Despite these correlations, statistical analysis suggests that only about 25 percent of Bitcoin’s price movements can be linked to the stock market. In other words, roughly three quarters of Bitcoin’s volatility is driven by factors that lie outside traditional equity markets.

Why Bitcoin Doesn’t Always Behave Like Gold

Bitcoin is often described as “digital gold,” yet its market behavior does not always align with that narrative. One reason may be that many investors do not treat Bitcoin primarily as a hedge against macroeconomic uncertainty.

Instead, it is frequently positioned along a broader risk spectrum, where investors allocate capital based on risk tolerance rather than a specific monetary thesis. This approach can cause Bitcoin to behave more like a growth-oriented asset than a traditional safe-haven investment.

Unique Drivers Behind Bitcoin’s Market Structure

Despite occasional correlations with equities, Bitcoin still operates under a distinct set of economic and structural drivers. Factors such as network activity, user adoption, regulatory developments, and policy changes all play a meaningful role in shaping its price dynamics.

These characteristics distinguish Bitcoin from traditional financial assets and support its potential role as a portfolio diversifier. Even when cross-asset correlations temporarily rise, Bitcoin’s long-term performance remains influenced largely by its own ecosystem rather than by movements in conventional markets.

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On January 28, the Federal Reserve held its policy rate steady at 3.5%–3.75%, reinforcing a data-dependent stance rather than signaling a clear easing cycle. Meanwhile, the IMF’s January 2026 outlook projects 3.3% global growth for the year, supported by technology investment and relatively accommodative financial conditions. In this environment, risk assets have not lost their footing entirely. Bitcoin’s shifting correlations offer insight into which identity is dominating.

Three Bitcoin Identities Competing for Control

Bitcoin appears to rotate between three distinct macro roles, depending on prevailing financial conditions.

1. Hedge Asset

In its hedge identity, Bitcoin would be expected to benefit from dollar weakness or from flows seeking a store-of-value alternative similar to gold. However, recent data suggest this role has faded. Bitcoin’s rolling 12-month correlation with gold peaked historically around +0.41 and has drifted close to zero since 2024. Likewise, its negative correlation with the US dollar, which approached –0.4 in 2022 and 2023, has weakened significantly in 2025 and early 2026. For now, the hedge narrative appears dormant rather than dominant.

2. High-Beta Technology Proxy

The stronger evidence currently supports Bitcoin behaving like a high-beta technology asset. Its correlation with the Nasdaq 100 has ranged between +0.35 and +0.6 in 2025 and early 2026. This implies that during risk-on sessions, Bitcoin amplifies gains in technology equities, while in selloffs it often declines more sharply. As long as growth holds and financial conditions remain supportive, this identity tends to prevail.

3. Liquidity-Sensitive Asset

Even when policy rates remain unchanged, liquidity conditions can shift. Rising real yields or tighter financial plumbing can pressure Bitcoin. Research suggests sensitivity to dollar real rates, similar to gold and emerging market currencies. Indicators such as the Federal Reserve’s balance sheet, reverse repo facility usage, and broader money supply provide measurable signals of tightening or easing. When liquidity contracts, Bitcoin often reprices quickly.

What to Watch Next

At present, Bitcoin most closely resembles a high-beta technology asset, with liquidity sensitivity acting as a secondary driver. However, a sustained rise in real yields could push it toward a duration-like, liquidity-driven identity. In a geopolitical or credit shock scenario, correlations across assets could initially spike, with any renewed hedge behavior emerging only if the dollar weakens and policy support expands.

Bitcoin’s so-called identity crisis is not philosophical. It is empirical. Correlations, real rates, ETF flows, and liquidity indicators will determine which macro role dominates next. The data will shift before the narrative does.

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Under the existing framework, the 25,000-contract cap has been considered restrictive for institutions seeking to deploy sophisticated hedging or exposure strategies. Lifting this ceiling may open the door to deeper capital engagement and a more dynamic options market surrounding Bitcoin exchange-traded funds.

Liquidity Expansion and Volume Growth

Eliminating position limits has the potential to significantly increase liquidity in Bitcoin ETF options. Large asset managers and hedge funds would gain the ability to manage risk at scale, execute complex strategies, and adjust exposures without facing artificial constraints.

With expanded institutional access, trading volumes are expected to rise. However, increased participation at scale can also amplify short-term volatility. The entry and exit of large positions, particularly in derivatives markets, often influence price fluctuations and market sentiment. As a result, while liquidity may deepen, price swings could become more pronounced in certain phases.

Strategic Implications for Bitcoin ETFs

The proposed change also underscores the growing integration of digital assets into traditional financial markets. Bitcoin ETFs have already provided investors with regulated exposure to Bitcoin without requiring direct custody of the underlying asset. Enhancing flexibility in the associated options market could further strengthen their appeal.

By modernizing derivatives access, Nasdaq’s move may influence how other financial institutions evaluate cryptocurrency-linked products. A more robust and less constrained options framework could contribute to broader institutional confidence in Bitcoin-related instruments.

A Structural Shift in the Market?

The removal of position limits on Bitcoin ETF options may represent more than a technical adjustment; it could signal a structural evolution in how digital assets are treated within mainstream finance. Expanded access, rising volume, and increased liquidity would further solidify Bitcoin’s role in global capital markets.

How the proposal is implemented—and how participants respond—will be closely monitored. Nonetheless, the direction is clear: digital assets continue to gain deeper footing within the traditional financial system.

This content does not constitute investment advice. Markets involve significant risk, and individuals should conduct their own research before making financial decisions.

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Features and Leverage Mechanism

TXXS provides investors with regulated and leveraged exposure to SUI. Instead of holding the underlying SUI token, the fund uses derivatives to target double the daily price movement of the token.

Russell Barlow, CEO of 21Shares, stated:

“Widespread adoption of digital assets hinges on the market’s ability to offer consumers uncomplicated applications of the technology, and investors are eager to jump on products that seek to amplify those investment returns. With this launch, 21Shares is capitalizing on one of the winners rising to the occasion and ushering in the next era of blockchain technology – one dominated by simplicity.”

SUI and Ecosystem Data

Sui is a decentralized cryptocurrency built on the Ethereum blockchain using a proof-of-stake consensus mechanism. Its native token is used for transaction fees, network governance, and staking. SUI has surpassed $10 billion in 30-day DEX volume and processed over $180 billion in stablecoin transfer volume for the fourth consecutive month.

21Shares and Regulatory Process

21Shares filed for a spot SUI ETF in May 2025 and announced a strategic partnership with SUI. Leveraged ETFs are typically short-term products suitable for experienced traders due to high risk.

According to ETF.com, while 2x leverage had long been seen as the ceiling under Rule 18f-4, some issuers believed there was a possible loophole in how derivatives rules were written. By structuring portfolios in certain ways, they hoped to justify using something other than the actual underlying asset for the VaR test. The SEC made it clear that this interpretation is not acceptable.

TXXS is the 74th crypto ETF launched this year and the 128th overall. Analysts expect over 80 additional ETF launches in the next 12 months. This development provides investors with regulated access to SUI and other Layer-1 projects, expanding both institutional and retail channels in the crypto market.

Leveraged ETFs can amplify gains, but they also increase potential losses. Products like TXXS operate based on daily price movements, and long-term returns may deviate from daily targets. Investors should carefully consider their risk tolerance before trading.

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A Reset Driven by Volatility

Devere Group CEO Nigel Green emphasizes that Bitcoin’s sharp pullback was largely the result of leveraged positions being forcefully unwound. He notes that such deep resets tend to be constructive in the long term, as they clear excesses and strengthen the structural foundation for future rallies. Compared with equities, Bitcoin experienced a much steeper reset, which Green believes could translate into greater relative strength during recovery phases.

Green also points out that Bitcoin often behaves like a leading indicator within the broader risk-asset universe. Movements in the Nasdaq are frequently mirrored in Bitcoin but with significantly higher amplitude. For instance, a 4% retreat in the Nasdaq can manifest as nearly a 30% decline in Bitcoin. This dynamic, Green argues, reflects how investor sentiment is most intensely expressed in crypto markets.

Macro Conditions Could Give Bitcoin an Edge

According to Green, Bitcoin’s tendency to react aggressively becomes advantageous when macro conditions begin to improve. In environments where investors gradually shift from fear to selective risk-taking, Bitcoin often gains momentum more rapidly than traditional assets. This shift does not require perfect economic conditions—only a modest return of confidence.

While discussing gold, Green acknowledges its strength during periods of uncertainty. However, he highlights that as markets pivot toward recovery, capital typically gravitates toward assets with higher potential returns. Bitcoin, with its limited supply and growth-oriented characteristics, stands out in such phases.

Is the Market Positioned for a New Rally?

Green notes that investor engagement has remained resilient despite heightened volatility, suggesting that the market is not experiencing an exodus but rather undergoing recalibration. Combined with improving technical indicators and maturing regulatory frameworks, he believes Bitcoin is entering a favorable environment.

After facing deeper downside pressure than both the Nasdaq and gold, Bitcoin may be well-positioned to outperform both assets if a broader risk-asset rebound begins. According to Green, the probability of Bitcoin leading the next rally in the coming weeks appears increasingly strong.

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Bitcoin’s Correlation with Nasdaq Weakens in Sentiment

While Bitcoin’s correlation with the Nasdaq remains relatively high at around 0.8, the nature of that correlation has changed. When equities fall, Bitcoin tends to drop more aggressively, yet when the Nasdaq rebounds, Bitcoin’s reaction appears muted.
This “negative performance skew” pattern was last observed during the 2022 bear market — a period marked by investor exhaustion rather than strength.

Wintermute attributes this shift to two main factors. First, both institutional and retail investors have shifted capital away from cryptocurrencies toward mega-cap tech stocks. Second, overall crypto liquidity has weakened due to a slowdown in stablecoin issuance, lower ETF inflows, and reduced market depth. Together, these conditions make Bitcoin more vulnerable to downside moves when risk assets retreat.

Short-Term Outlook and Key Levels

After briefly pulling back, Bitcoin managed to hold above its key support levels, showing no major structural changes on the chart. In the short term, breaking out of a minor descending trend will be crucial.
If BTC manages to reclaim the $105,500 resistance level — previously rejected — a move toward the $106,700 region could follow, indicating renewed bullish momentum.

On-Chain Metrics Support Spot Demand

On-chain data, particularly the Coinbase Premium Index, points to strengthening spot buying activity. Bitcoin’s recent upward moves appear to be supported by organic demand rather than speculative leverage.

Coinbase remains dominated by buyers, while Binance has shown heavier selling pressure in recent weeks. However, recent signs of renewed buying on Binance suggest improving sentiment and potential accumulation at current levels.

*This content does not contain investment advice.

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A Strategic Move Toward U.S. Markets

In an official statement, Animoca confirmed that it has signed a term sheet with Currenc Group to pursue a Nasdaq listing through a reverse merger structure. Yat Siu, Co-Founder and Executive Chairman of Animoca Brands, described the proposed deal as “a compelling opportunity” that could bring the company closer to global investors.

Pending shareholder and regulatory approvals, the transaction is expected to be completed by 2026. Industry analysts view the merger as a strategic move to expand Animoca’s investor base and enhance its exposure to U.S. capital markets.

Currenc Group to Streamline Operations

Ahead of the merger, Currenc Group announced plans to restructure its business by divesting certain divisions. Its AI-driven financial solutions and digital remittance platform will reportedly be spun off to existing shareholders prior to closing the deal.

The restructuring news, coupled with merger anticipation, has sent Currenc’s stock soaring — shares have surged 118% over the past five days and are expected to open around $3.78 in New York trading.

Shift in Animoca’s Revenue Model

In 2024, Animoca reported $165 million in total revenue, driven largely by its Digital Asset Advisory division, which posted an impressive 116% year-over-year growth. Meanwhile, revenue from its Web3 gaming and NFT segments declined 40% to $110 million, signaling a shift in the company’s business focus.

This evolution underscores Animoca’s transition from being primarily a blockchain gaming studio to a more diversified player in digital asset management and investment advisory.

Expanding Presence with a New York Office

As part of its U.S. market strategy, Animoca Brands also plans to open a new office in New York. The move will strengthen the company’s North American footprint and foster closer relationships with institutional investors.

Animoca’s upcoming Nasdaq debut not only marks a major milestone for the company but also reflects the growing institutional acceptance of Web3 enterprises within traditional financial markets.

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Berachain and the Proof of Liquidity Model

At the core of this initiative lies Berachain, a Layer-1 blockchain that operates on a Proof of Liquidity (PoL) consensus mechanism. This model links liquidity directly to on-chain economic activity, promoting a more sustainable and scalable blockchain environment. Within this framework, BERA will serve as the primary treasury asset for Greenlane. The company views this approach as a strategic step toward enhancing on-chain economic efficiency and developing a liquidity-driven growth model that aligns with decentralized financial systems.

Leadership and Strategic Appointments

To execute this initiative, Ben Isenberg will assume the role of Chief Investment Officer, overseeing the implementation of the Berachain treasury plan. In addition, industry veterans Bruce Linton and Billy Levy will join the board of directors, contributing their experience to Greenlane’s strategic expansion. These leadership changes reinforce the company’s commitment not only to capital investment but also to effective governance and long-term participation in the Berachain ecosystem.

Transaction Details and Timeline

The private placement involves the sale of Class A shares, with proceeds earmarked primarily for the acquisition of BERA tokens and other corporate development goals. The transaction is expected to close by October 23, 2025. Throughout this process, Greenlane emphasizes its focus on transparency and investor confidence, aiming to foster stronger engagement between institutional capital and blockchain networks. The company’s stock will continue to trade on the Nasdaq under the ticker GNLN.

A New Era for Corporate Crypto Treasury Management

Greenlane’s decision to integrate Berachain’s Proof of Liquidity model into its treasury strategy represents a broader shift in how traditional companies approach digital asset management. By combining conventional financial discipline with blockchain-based liquidity mechanisms, Greenlane is positioning itself at the forefront of a growing movement toward institutional-grade crypto treasury strategies.

This initiative not only highlights Berachain’s innovative model but also signals increasing corporate interest in Layer-1 blockchain ecosystems. As Greenlane moves forward with its plan, the development could serve as a case study for how traditional finance can leverage decentralized infrastructure for sustainable long-term growth.

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