Bitcoin drops to $65K as crypto ETPs see $4B outflows amid growing investor apathy

link">Bitcoin experienced a sharp selloff, falling below the critical $65,000 level amid a confluence of macro headwinds. [The Block](https://www.theblock.co/post/390747/bitcoin-sinks-below-65000) reported that nearly $360 million in crypto long positions were liquidated in just one hour as fragile market conditions were rattled by macro shocks. The pressure comes as crypto ETPs face their fifth consecutive week of outflows, with $4 billion exiting funds according to [CoinShares](https://www.theblock.co/post/390801/global-crypto-etp-outflows-stretch-to-fifth-week-as-4-billion-exits-funds-amid-growing-investor-apathy-coinshares), citing "growing investor apathy" and trading volumes falling to their lowest levels since July 2025. Adding to the uncertainty, the Supreme Court struck down Trump's global tariffs as unconstitutional, causing initial relief in markets. However, Trump quickly responded by imposing new 15% tariffs using different legal authority, maintaining trade war tensions. [Launchy](https://launchy.beehiiv.com/p/launchy-regulatory-roundup-76-crypto-jumps-as-supreme-court-strikes-down-trump-tariffs) noted that despite the initial rally on the Supreme Court ruling, the reimposed tariffs and hawkish Fed signals continue to weigh on risk assets. Corporate Bitcoin treasuries are also under pressure, with companies like MicroStrategy's $54 billion Bitcoin bet now underwater, raising concerns about potential forced liquidations if the selloff continues.

Traditional finance giants are making significant moves into DeFi despite market turbulence. [The Block](https://www.theblock.co/post/390741/why-tradfi-giants-like-blackrock-are-buying-defi-tokens-now) reports that BlackRock, Apollo, and Citadel have acquired or agreed to acquire DeFi tokens, signaling a structural shift in institutional attitudes toward decentralized protocols. This comes as [Standard Chartered](https://www.theblock.co/post/390783/stablecoins-could-drive-1-trillion-in-t-bill-demand-giving-treasury-room-to-shift-issuance-standard-chartered) projects that stablecoin growth could generate up to $1 trillion in new Treasury bill demand by 2028, potentially reshaping government debt issuance patterns. On the regulatory front, state-level link">Bitcoin reserve initiatives are gaining momentum. [Missouri](https://www.theblock.co/post/390754/missouri-advances-bitcoin-reserve-bill) advanced HB 2080 to a House committee, seeking to create a Bitcoin Strategic Reserve Fund that would allow the state treasurer to receive, invest, and hold Bitcoin. Meanwhile, international expansion continues with [South Korea's Hanwha Asset Management](https://www.theblock.co/post/390769/south-korea-hanwha-jito) partnering with the Jito Foundation to explore JitoSOL-based exchange-traded products, demonstrating growing institutional interest in liquid staking derivatives beyond traditional spot Bitcoin ETFs.

link">Ethereum is approaching what could be its most significant upgrade yet with the zkEVM transition. [Bankless](https://www.youtube.com/watch?v=QK6yyRdJ-eY) featured Ethereum researcher Ansgar Dietrichs explaining how moving from the current "re-execute every block" model to zero-knowledge proofs could fundamentally change how the network verifies transactions. This isn't just an incremental improvement—it addresses Ethereum's "hidden scaling tax" where every node must redundantly execute all computation to verify blocks. The transition would happen gradually, moving from optional proofs to mandatory proofs while maintaining client diversity in a radically different way. The upgrade targets all three blockchain scaling constraints: compute, IO, and bandwidth. [The Daily Gwei](https://www.youtube.com/watch?v=sPN0lV0HFik) discussed additional Ethereum developments including FOCIL implementation in the upcoming Hegota upgrade and core developer priorities for 2026, emphasizing fast finality improvements and the unified stack developments happening on Base. However, market pressure on Ethereum continues with [Lookonchain](https://x.com/lookonchain/status/2019281955255353650) reporting that Vitalik Buterin has sold 2,961.5 ETH ($6.6 million) over the past three days at an average price of $2,228, adding to selling pressure amid the broader market downturn.

AI agents are rapidly integrating with crypto infrastructure, creating both opportunities and risks. A notable incident occurred when [an AI bot called "Lobstar Wilde"](https://www.theblock.co/post/390722/ai-agent-created-by-openai-dev-accidentally-sends-entire-memecoin-holdings-to-reply-guy) accidentally sent its entire memecoin holdings worth over $250,000 to a user who claimed his uncle had tetanus. The recipient quickly sold the tokens for about $40,000 profit, though the same amount is now worth over $400,000. This incident highlights both the potential and pitfalls of AI agents handling financial transactions autonomously. [Y Combinator](https://www.youtube.com/watch?v=Q8wVMdwhlh4) discussed the explosive growth of the "AI Agent Economy," noting that software engineering accounts for nearly 50% of all AI agent tool calls according to [Shoal Research](https://t.me/shoalresearch/13125). The intersection of AI and crypto is becoming increasingly sophisticated, with platforms like [awesome-onchain-agents](https://github.com/sodofi/awesome-onchain-agents) cataloging the growing ecosystem. Looking ahead, [Citrini Research](https://www.citriniresearch.com/p/2028gic) warns of a potential "2028 Global Intelligence Crisis" where rapid AI advancement could trigger mass white-collar job displacement and economic disruption. While this seems bearish for traditional markets, it could accelerate the adoption of crypto-native AI agent economies as alternative economic structures.

The link">Bitcoin mining sector is showing signs of strain as companies adjust their treasury strategies. [Bitdeer](https://www.theblock.co/post/390719/bitdeers-bitcoin-treasury-drops-to-zero-after-miner-liquidates-remaining-943-btc) liquidated its entire Bitcoin treasury of 943.1 BTC, making it the largest publicly traded Bitcoin miner by self-mining hashrate to hold no BTC on its balance sheet. However, CEO Jihan Wu clarified that [this zero-bitcoin balance is not permanent](https://www.theblock.co/post/390785/bitdeer-ceo-says-bitcoin-balance-will-not-always-be-zero-as-miner-eyes-land-acquisitions-after-liquidating-entire-treasury), as the company eyes land acquisitions and strategic investments. This move reflects broader challenges facing Bitcoin miners who adopted treasury strategies during the bull market but now face pressure from underwater positions. The corporate Bitcoin treasury model championed by MicroStrategy is being tested, with several copycat companies facing significant unrealized losses. [Coin Bureau](https://www.youtube.com/watch?v=w1K0mtKNey0) analyzed whether this could trigger a contagion effect or represent a healthy shakeout before the next bull phase.