Bitcoin rallied to $85,000 following a short squeeze that drove almost $1 billion into spot ETFs and caused $750 million in liquidations. Meanwhile, regulatory pressures mounted as the Senate rejected the Clarity Act, leaving crypto oversight to the SEC and CFTC, while federal prosecutors launched an investigation into Binance over potential U.S. sanction violations. In addition, Canada's top banks partnered on a tokenized deposit system, and Binance took a $100 million stake in Circle to promote USDC.
01Market mover
Bitcoin Reaches $85,000 as Short Squeeze Triggers $648 Million Liquidations
pushed to an eight-month high of $85,000 on Monday, extending a that forced bearish traders out of their short positions and drove a surge in spot exchange-traded funds. U.S.-listed spot Bitcoin exchange-traded funds drew a net $998.95 million on Monday, marking their largest daily inflow since Oct. 6, 2025. BlackRock's IBIT led the inflows with $381.37 million, followed by Ark's ARKB with $289.12 million and Fidelity's FBTC with $238.84 million. The single-session haul surpassed the previous 2026 high of $844 million recorded on Jan. 14. Monday's inflow was also the ninth-largest since the began trading on Jan. 11, 2024. The advance broke through a key technical hurdle at $82,000 that had capped prices since August, triggering roughly $750 million in bearish liquidations. Exchanges executed buy orders to close those short positions, adding fuel to the upward move. Bitcoin has risen 44% to $85,000 this quarter, outperforming every major . Strategy founder Michael Saylor announced on Saturday that the company made significant Bitcoin and repurchased perpetual preferred shares using cash. Despite the recent inflows, U.S. spot Bitcoin ETFs remain down about $464 million on a year-to-date basis.
Binance Buys $100 Million Circle Stake in Five-Year USDC Deal
Binance purchased a $100 million stake in Circle Internet Group on September 17, 2026, anchoring a new five-year commercial accord designed to expand the global reach of the USDC . Under the private placement, Circle issued 1,237,011 shares of Class A common stock at $80.84 per share, offering a 5% discount to the market price prior to closing. Binance agreed not to sell, transfer, or the acquired shares for up to two years, though it retains full voting rights throughout the lockup period. The agreement replaces previous arrangements the two companies formed in November 2024 and August 2025. In exchange for promoting USDC across its platform and targeting , Binance will receive a monthly incentive fee from Circle tied to USDC balances held through Circle's Modular Smart Contract Wallet infrastructure. Circle shares closed Monday at $94.29 before rising more than 1% in premarket trading on Tuesday. USDC maintains a of roughly $75 billion to $76 billion, trailing Tether's USDT at approximately $183 billion.
Stablecoin Market Capitalization ($B)
USDT holds a substantial market capitalization lead over USDC.
The Trading Commission warned on Tuesday that prediction market contracts tied to individual speech and conduct carry heightened manipulation risks. The agency's Division of Market Oversight issued an advisory stating there are only limited circumstances in which mention markets can meet Commodity Exchange Act standards. These contracts settle on the discrete actions of a named person rather than independently generated and externally verifiable outcomes. The follows enforcement actions against traders exploiting privileged information, including a former White House teleprompter operator ordered to return profits and pay penalties for trading contracts tied to presidential speeches. Exchanges listing mention markets must evaluate four factors including oversight measures, independent verifiability, external pressures, and outside obligations. While stopping short of an outright ban, the advisory establishes a high bar that may narrow the window for such event contracts.
Cybercrime Gangs Clash on Dark Web as Group Hijacks Rival's Website
The cybercrime collective ShinyHunters hijacked the dark web data leak site of rival ransomware gang Clop last Friday. ShinyHunters breached the site using an unauthenticated file-upload vulnerability in the underlying Grav CMS software and replaced the page with a seizure banner and Pokémon artwork. The attack stems from a long-running dispute over an Oracle E-Business Suite zero-day exploit originally used in data theft campaigns last year. ShinyHunters claims it obtained Clop's private Tor onion keys, server logs, source code, and internal records detailing past extortion payments. In response, ShinyHunters issued an eight-figure ransom demand. The attackers threatened to increase the price every 24 hours, require a public apology, and publish the names of companies that previously paid Clop alongside the associated addresses. By Monday, the defacement was temporarily replaced with a message from Clop stating it was attempting to make contact.
Defeat of Clarity Act Shifts Crypto Oversight Authority to SEC and CFTC
The US Senate rejected cloture on the Digital Market Clarity Act in a procedural vote, falling short of the votes required to advance the legislation. The failed vote leaves the industry's top policy priority stalled, prompting federal market regulators to bypass Congress and expand their oversight using existing statutory authorities. Just two days after the Senate procedural defeat, the Trading Commission submitted a crypto rulemaking package titled Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets to the White House Office of Information and Regulatory Affairs under RIN 3038-AF80. Simultaneously, the Securities and Exchange Commission advanced its own rulebook by issuing an order that creates a temporary five-year innovation exemption for onchain trading of certain tokenized stocks. The legislative deadlock stemmed from deep partisan divisions and ethics concerns regarding President Donald Trump's crypto ventures, including from World Liberty Financial and broader conflicts of interest. Seven dissenting Democratic senators who helped block the bill stated their intent to pursue future market structure legislation, though industry participants dismissed the move as midterm positioning ahead of November congressional elections. White House crypto adviser Patrick Witt and assistant secretary Luke Pettit acknowledged that regulatory rulemakings will face legal challenges without statutory backing from a passed act. Meanwhile, banking agencies continue implementing the Guiding and Establishing National Innovation for U.S. Act, which banking lobbyists previously supported to counter stablecoin rewards offered by crypto platforms. The resulting agency-driven approach leaves the digital asset sector navigating a fragmented framework of federal rulemakings, state licenses, and no-action letters rather than a unified statutory map.
Senate Clarity Act Vote Breakdown (Votes)
The Clarity Act failed to reach the 60 votes needed, stalling at 49.
Binance Probed by US Prosecutors Over Potential Iran Sanctions Violations
Federal prosecutors are investigating whether Binance Holdings Ltd. violated United States sanctions on Iran by failing to halt certain trading activity on its platform. The Manhattan US attorney's office is leading the inquiry alongside the Justice Department's criminal division in Washington, with authorities scrutinizing whether the exchange knowingly allowed the transactions to proceed. Binance stated that it maintains a zero-tolerance policy for sanctions violations and cooperates fully with law enforcement. The current investigation follows a 2023 guilty plea in which Binance agreed to pay a $4.3 billion settlement for banking compliance violations and anti-money laundering infractions. In February, the company reported that more than 1,500 people, representing about 25% of its global headcount, worked on compliance. The platform previously faced scrutiny in February when U.S. Senator Richard Blumenthal initiated a probe into alleged sanctions violations totaling $1.7 billion, an accusation Binance rejected after finding no supporting evidence.
Canada's 'Big Six' Banks Partner to Launch Interbank Tokenized Deposit System
Canada's six largest banks have launched a joint initiative to explore a shared interbank tokenized deposit system for the Canadian dollar. The project brings together Bank of Montreal, CIBC, National Bank of Canada, Royal Bank of Canada, Scotiabank, and TD Bank Group. The first phase of the initiative will focus on testing the transfer of digital representations of bank across participating institutions before eventually connecting with other digital systems. The move follows recent clarification from the Office of the Superintendent of Financial Institutions stating that tokenized deposits are not legally distinct from traditional deposits. Tokenized deposits represent money held at a regulated bank and remain a liability of that institution, separating them from fiat-backed issued by non-financial entities. The participating banks intend the shared infrastructure to support faster, programmable, around-the-clock payments while keeping customer funds within the regulated banking system. Longer-term plans include opening the initiative to other deposit-taking institutions. The project arrives as global financial institutions race to integrate infrastructure into cross-border payments, following similar trials by US lenders, JPMorgan, Citi, and Swift.
Heavy ETF inflows coexist with aggressive federal probes and failed legislative frameworks. The key tension is whether institutional adoption can sustain market momentum while regulatory enforcement intensifies without clear statutory guidance.
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