Banks Line Up for Crypto Custody as ETH Stalls Below $2,000

The question is no longer whether major banks will custody crypto. Morgan Stanley, Citigroup, and Barclays are all positioning for it, a shift that would route billions in institutional assets through traditional rails. The timing tracks with regulatory signals from Washington that custody guidance for banks is imminent.

ETH traded at $1,951 on Tuesday, up 1.4% in 24 hours but still unable to crack the $2,000 level that has acted as a ceiling since late February. Technical analysts point to a support zone near $1,800 that coincides with the lower boundary of a descending channel. A breakdown there opens the door to $1,500.

Dimon Wants Stablecoin Rules to Match Banks

JPMorgan CEO Jamie Dimon called for yield-bearing stablecoins to face the same regulatory requirements as bank deposits. The argument: if a stablecoin pays interest and functions like a deposit, it should be regulated like one. Dimon framed it as a "level playing field" issue amid ongoing stablecoin legislation talks in Congress.

The push comes as Deloitte signed off on a reserve attestation for Tether's USAT, a US-regulated stablecoin issued through Anchorage Digital Bank. The Big Four firm confirmed $17.6 million in reserves backing USAT. It is a notably smaller, more conservative product than Tether's flagship USDT, which holds over $100 billion in reserves but has faced persistent scrutiny over transparency.

The European Central Bank added its own concerns, publishing a working paper warning that widespread stablecoin adoption could pull deposits out of banks, weakening lending capacity and monetary policy transmission across the eurozone.

Tokenized Equities Get Abu Dhabi Green Light

Ondo Finance's tokenized stocks platform received regulatory approval in Abu Dhabi to operate through Binance's regulated trading venue. The approval lets UAE-based financial institutions trade tokenized equities, another step in the Gulf's strategy to become a hub for real-world asset tokenization.

Aave DAO Governance Fractures

The Aave Chan Initiative, one of the most active governance delegates in DeFi, announced plans to exit Aave DAO following a dispute over a $42.5 million funding package for Aave Labs. A Snapshot vote passed the proposal with 52.58% support, but it still faces an ARFC stage before any binding onchain execution. The split highlights the tension between professional service providers and token-holder governance structures that remain difficult to scale.

Bitcoin Miners Pivot, Sell, and Brace

Core Scientific plans to sell the bulk of its bitcoin holdings in 2026 to fund an accelerating pivot toward AI data centers. The company has already liquidated roughly $175 million in BTC. MARA, another major miner, quietly expanded its treasury policy to allow balance sheet bitcoin sales after reporting a $422.2 million fair-value decline in 2025.

Bitcoin itself faces a death cross on the daily chart, a pattern that has preceded average drawdowns of 35% over the following month in prior cycles. Four headwinds are keeping BTC pinned below $70,000: a strengthening dollar driven by renewed Iran conflict escalation, oil-related inflation fears, tightening liquidity conditions, and fading momentum from the January rally.

Quick Hits

A US district judge in New York dismissed a "scam token" case against Uniswap, ruling that the protocol's decentralized architecture makes it impossible to identify the actual token issuers. The decision reinforces the legal distinction between protocol developers and the actors who deploy contracts on permissionless infrastructure.

Bybit reported that its real-time fraud detection system blocked $300 million in suspicious withdrawals during Q4 2025, with most funds "saved" because users abandoned transactions after receiving warnings. Japanese PM Sanae Takaichi disavowed a memecoin called "Sanae Token" that briefly hit a $28 million market cap, as regulators investigate whether unregistered operators were involved.

Iranian exchange outflows spiked to $10.3 million in the days following joint US-Israeli airstrikes, with hourly volumes approaching $2 million at peak. Chainalysis tracked the flows, which suggest local users moving assets to self-custody or offshore platforms during periods of geopolitical stress.

Strive strategist Joe Burnett published a thesis arguing AI-driven deflation could force central banks into sustained easing, potentially pushing Bitcoin to $11 million by 2036. The model assumes a $230 trillion market cap, a figure that requires Bitcoin to absorb a significant share of global store-of-value demand. The timeline is speculative, but the underlying logic (AI productivity gains creating deflationary pressure that triggers monetary expansion) is at least worth tracking.