Blockchain layer-2 (L2) network Polygon reduced its average block time by 250 milliseconds to 1.75 seconds, marking its first block-time reduction since genesis as the network pushes deeper into stablecoin payments and settlement infrastructure.

Polygonscan shows that the latest blocks on the network were created in 1.75 seconds. The upgrade means that Polygon can process around 14% more payments per second, reaching a maximum theoretical throughput of about 3,260 transactions per second (TPS), according to Polygon software engineer Lucca Martins.

Shorter block times can help transaction backlogs clear faster, reducing the duration of network congestion and subsequent transaction fee spikes, which is particularly important for high-frequency use cases such as payments, stablecoins or decentralized finance (DeFi) trading.

The upgrade comes as Polygon makes efforts to position itself for use cases targeting more institutional adoption, such as private stablecoin payments. On Tuesday, Polygon introduced a new wallet feature that enables users to privately route stablecoin transactions through a shielded pool verified by zero-knowledge proofs.

The upgrade is part of the Polygon Improvement Proposal PIP-86, a two-step motion that seeks to further reduce block time to 1.5 seconds and scale down checkpoint rewards to maintain the Polygon (POL) token emissions at the target 1% after the block time reduction. 

Polygon blockchain explorer, latest blocks, production time. Source: Polygonscan

Cointelegraph reached out to Polygon for comment on its block time reduction plans, but had not received a response by publication.

Related: Morgan Stanley takes on crypto trading rivals with E*Trade pilot

Polygon targets private stablecoin payments to onboard institutions

Polygon’s new wallet feature is part of an aim to onboard more institutional users as it hides senders, receivers and amounts onchain while maintaining compliance through Know Your Transaction (KYT) screening and auditable files.

The feature introduces more privacy for businesses transacting with stablecoins, according to Polygon community lead Smokey. 

Despite the upgrade, Polygon’s (POL) token remained stagnant over the past 24 hours and traded at $0.09 at the time of writing. The token is down 54% over the past year, CoinMarketCap data shows.

POL/USD, one-year chart. Source: CoinMarketCap

Polygon has also integrated with large credit card providers. On April 29, global payments giant Visa expanded its stablecoin pilot to include support for Polygon, Base, the Canton Network, Arc and Tempo.

Launched by Visa in 2023, the pilot allows partners to settle transactions through stablecoins rather than traditional banking rails, to evaluate whether stablecoins can offer faster settlement.

Magazine: Will the CLARITY Act be good — or bad — for DeFi?

Kraken parent Payward agreed to acquire Hong Kong-based Reap Technologies for up to $600 million as the company expands into stablecoin payments and business-to-business (B2B) financial infrastructure.

The deal will be paid in a mix of cash and Payward stock, valuing Payward’s equity at $20 billion, the company said on Thursday. It would expand Payward Services, the company’s B2B infrastructure platform launched in March 2026.

The deal comes as crypto companies move beyond trading services into payments, treasury and settlement products built around stablecoins.

In a statement on Thursday, Reap co-founders said the platform would continue operating as a standalone platform, adding that the transaction remains subject to customary regulatory approvals, expected to close in the second half of 2026.

Reap expands Payward Services into global cards and payments

Payward Services allows companies to integrate trading, payments, funding and digital asset services through one system.

The acquisition of Reap extends that platform into the global cards and payments space, allowing partners to embed card issuance, cross-border payments, and stablecoin treasury services alongside Payward’s existing capabilities.

Source: Kraken

“Reap is the payments layer for what comes next. Card networks, banking rails, and blockchains on a single API, settling in stablecoins,” Payward and Kraken co-CEO Arjun Sethi said in the announcement.

Related: Kraken parent Payward closes Bitnomial deal to expand US crypto derivatives

The acquisition of Reap follows Payward’s acquisitions of Bitnomial exchange, futures broker NinjaTrader and xStocks issuer Backed, as the company continues expanding its platform through targeted acquisitions.

Reap deal deepens Asia push

Reap was founded in 2018 by Daren Guo, who previously worked for the Asia Pacific business at the payments firm Stripe, and former investment banker Kevin Kang, according to its website.

The company specializes in provisioning payment solutions to connect traditional financial systems with digital assets, aiming to enable cross-border money flows.

Sethi reportedly said that the deal marks Payward’s first infrastructure acquisition in Asia and one of its largest transactions to date.

“If you take Europe out, the fastest growing market is Asia, not just revenue but also asset-on-platform,” Sethi said, adding: “They have already done it in Asia. They can expand into the US overnight with us.”

Magazine: Guide to the top and emerging global crypto hubs: Mid-2026

A joint proposal to release the roughly $71 million in Ether frozen after the Kelp DAO exploit is set to pass later on Thursday, moving a cross-protocol recovery effort closer to restoring part of rsETH’s backing.

Over 90.5% of the tokens were cast in favor of the motion, representing 173.9 million Arbitrum (ARB) tokens, while 9.4%, or 18.1 million tokens, abstained. Less than 1%, or 1,700 tokens, voted against the proposal before the voting period’s scheduled end at 6:54 pm UTC, according to a Snapshot at the time of writing.

Co-authored by Aave Labs, Kelp DAO, LayerZero, EtherFi and Compound, the proposal seeks to unfreeze the 30,765 Ether (ETH) that was frozen by Arbitrum’s Security Council on April 21, days after an attacker drained about 116,500 restaked Ether (rsETH) from Kelp Dao, worth between $290 million and $293 million at the time.

The proposal marks the end of the first round of voting, bringing the “DeFi United” recovery effort closer to restoring part of rsETH’s backing and moving the motion to a definitive onchain governance proposal. It comes shortly after Aave Labs liquidated the Kelp DAO hacker’s remaining rsETH positions on Ethereum and Arbitrum, moving one step closer to resolution.

“DeFi United” is a recovery effort initiated by DeFi protocols, including Mantle, EtherFi Foundation, Golem Foundation, Lido DAO, Ethena, LayerZero, Ink Foundation and Tydro, who have pledged a cumulative 43,000 Ether (worth about $101 million) to reduce the contagion effect of the Kelp DAO exploit.

As the next step, the protocols will conduct a snapshot “temperature check” to gauge delegate sentiment before the proposal is finally submitted onchain via Tally as a Constitutional Arbitrum Improvement Proposal (AIP). 

Joint proposal to release funds frozen by Arbitrum’s security council. Source: Snapshot.org

Subject to a binding onchain governance vote, the funds would be released in a designated recovery address ‘0xf22’ in a 3-of-4 Gnosis Safe (SAFE) with signers from Aave Labs, Kelp DAO, Certora and EtherFi.

However, even if the final governance proposal passes, rsETH’s backing is still facing a shortfall of about 76,127 rsETH, currently worth about $174.5 million. The proposal argued that even partially restoring rsETH’s backing will help stabilize market conditions in the broader DeFi ecosystem.

Cointelegraph reached out to Arbitrum and Aave for comment on the next steps in the governance process and the proposed timeline for restoring rsETH’s backing.

Related: Aave deposits fall by $15B as Kelp exploit sparks flight from DeFi lender 

Arbitrum to pass proposal to deploy 6,000 ETH for yield

The Arbitrum DAO is also poised to approve a separate proposal to move 6,000 ETH, currently worth about $14 million, from the DAO treasury into its Treasury Management Portfolio.

The proposal increases the planned ETH allocation from 5,000 ETH to 6,000 ETH after forum feedback, according to the Arbitrum governance forum. It also seeks to transfer about $150,000 worth of idle USDC into the portfolio to generate additional yield

More than 99.9% of voting power was in favor of the proposal, representing 185.7 million ARB tokens, while 0.1%, or 266,930 ARB, abstained. The voting window is scheduled to close Friday at 2:22 pm UTC, according to Tally.

Proposal to transfer 6,000 ETH to Arbitrum DAO’s portfolio. Source: alt.gov.arbitrum.foundation.

The 6,000 ETH allocated to yield strategies is projected to generate an additional 288 ETH worth about $625,000 in the next year, assuming an ETH price of $2,200, based on the current 30-day-average annualized rate.

Magazine: 53 DeFi projects infiltrated, 50M NEO tokens could be ‘given back’: Asia Express

Germany is preparing to change how it taxes Bitcoin and other cryptocurrencies from 2027, potentially ending one of Europe’s most generous long-term holding exemptions as it seeks to raise additional revenue and tighten tax compliance.

Finance Minister Lars Klingbeil said at an April 29 press conference on the 2027 federal budget that the government wants to “tax cryptocurrencies differently,” and key points include an extra 2 billion euros (about $2.3 billion) in revenue from crypto taxation and measures against financial and tax crime.

Under current rules, private crypto gains in Germany are taxable if the assets are sold within one year of acquisition, but are generally tax-free after that period. The exemption has made Germany one of the more favorable European jurisdictions for long-term Bitcoin and crypto holders.

The finance ministry’s 2022 and 2025 guidance confirmed that this one-year “Haltefrist” also applies to coins used in staking and lending, after an earlier plan for 10 years was dropped. Tax advisory firms such as Blockpit describe the rule as a key advantage for German retail investors, especially long-term holders.

Germany plans to “tax cryptocurrencies differently.” Source: Bundesfinanzministerium

Klingbeil did not explicitly reference the holding period in his April remarks. However, industry groups, including the German Bitcoin Association, say the exemption is the most likely target if the government aims to generate significant revenue from crypto taxation.

Related: Germany‘s central bank president touts stablecoin and CBDC benefits for EU

Bitcoin and crypto tax accountant Robin Thatcher told Cointelegraph that removing the 12-month tax-free disposal would “significantly weaken Germany’s pull as a crypto hub,” and that other jurisdictions “should be copying this policy rather than Germany changing it.”

Cointelegraph reached out to Germany’s Federal Ministry of Finance for comment, but had not received a response by publication.

EU transparency push and policy alignment

The tax debate also comes as Germany prepares for broader crypto reporting under the EU’s DAC8 regime.

Since January, Germany’s implementation of the EU’s DAC8 regime via the Crypto Asset Tax Transparency Act requires crypto asset service providers (CASPs) to report detailed customer transaction data to the Federal Central Tax Office and other EU authorities, dramatically reducing the scope for undeclared crypto trading.

Austria, where Vienna-based crypto broker Bitpanda is headquartered, scrapped its own tax-free holding period for crypto in 2022 and moved to taxing gains as capital income regardless of how long coins are held.

Abolishing Austria’s holding period “extremely stupid idea.” Source: Eric Demuth

Bitpanda co-founder Eric Demuth has since described Austria’s move as “an extremely stupid decision,” arguing in a March 12 X post that it created more bureaucracy and complexity for users and platforms while bringing “hardly any additional benefit” for the state and warning that Germany should not repeat the same mistake.

Related: Bitget taps ex-Bitpanda legal chief Oliver Stauber to build Vienna MiCA hub

Thatcher said the change would put Germany “broadly in line with Austria,” with a 27.5% flat tax, and “not far” from the United Kingdom’s 24% top capital gains tax, causing Germany’s structural competitive edge to “disappear overnight.”

Critics see tax push eroding Germany’s crypto appeal

A spokesperson from Bitpanda told Cointelegraph this is a “critical juncture for Germany’s digital economy.” Any reform should not be “a mere revenue exercise,” they said, especially since the gains to the state would be “negligible” at approximately 0.02% of the federal budget. They added that any new framework “must prioritize market competitiveness and prevent a migration of activity toward unregulated, offshore venues.”

Thatcher said “the packaging matters,” and that the framing shows the motivation is fiscal rather than principled, “sitting inside a 98 billion euro deficit-reduction budget,” alongside cuts to health, pensions and levies on alcohol and tobacco. “Investors and entrepreneurs notice when they are bundled in with so-called sin taxes,” he said, “it shows how the state views the asset class.”

Erald Ghoos, CEO of OKX Europe, told Cointelegraph the plan would hurt Germany’s adoption and competitiveness “in one move,” pushing people toward offshore platforms “without [Markets in Crypto Assets] MiCA obligations.”

He cited Austria as a failed example that created “compliance headaches for minimal revenue gain,” adding that MiCA has “done real work harmonizing regulation,” but that “Europe keeps losing ground” when it comes to taxation.

Magazine: Bitcoin will not hit $1M by 2030, says veteran trader Peter Brandt

Zug, Switzerland, May 7, 2026 – After years of research, engineering, and community collaboration, Panther Protocol Foundation announced that Panther Protocol is now live on Polygon.

The deployment introduces what the team describes as “programmable privacy” for decentralized finance — infrastructure designed to enable confidential on-chain interactions while supporting verifiable compliance when required.

A new phase for privacy in DeFi

Panther combines zero-knowledge cryptography, non-custodial architecture, and DAO governance to support privacy-preserving interactions within decentralized environments.

Users interact directly with smart contracts while retaining full control of their assets, with cryptographic proofs generated locally in their own browser or device.

Zero-knowledge credential verification

The initial deployment includes credential-based access controls, powered by independent providers like AMLBot via PureFi tooling.

Participants prove eligibility on-chain using zero-knowledge attestations — without sharing personal data or identity information with Panther DAO or the protocol. The protocol verifies only what’s required. Nothing more.

Integration with existing DeFi liquidity

Panther plugs into existing DeFi liquidity — it doesn’t replace it. Users interact confidentially without stepping outside the broader ecosystem.

The zSwap functionality supports Quickswap, Uniswap, and Curve Finance directly through the interface.

Panther Reward Points (PRPs)

The network introduces Panther Reward Points (PRPs), a participation-based mechanism that recognizes protocol activity.

Users accrue PRPs through actions such as interacting with privacy-enabled zones and other qualifying protocol interactions, according to rules defined by Panther DAO governance.

According to the project, PRPs are intended to support long-term ecosystem participation as Panther expands across additional chains and integrations.

Built for the long term

Panther’s architecture includes Forensic Data Escrow — a mechanism for governed, conditional disclosure of encrypted metadata under defined circumstances.

The roadmap ahead includes multi-chain expansion, new integrations and adapters, and new zones and participation models.

Some protocol contracts include limited governance-controlled upgrade and emergency mechanisms — solely to protect users in the event of critical vulnerabilities, with no access to user assets.

A Panther DAO-approved grant will fund open-source development toward a potential future deployment on Base.

About Panther Protocol Foundation

Panther Protocol Foundation is a non-profit organization that supports the ecosystem through research funding, open-source development grants, and ecosystem initiatives.

The Foundation does not operate the protocol, deploy smart contracts, host interfaces, custody assets, or provide financial or digital asset services.

Media contact:

• Joris Koopman
• Marketing and Ecosystem Lead at Panther Protocol Foundation
• joris@panther.org

Today in crypto, Coinbase shares fell after reporting a $400 million net loss in Q1, fund managers warm back up to digital assets, with Bitcoin continuing to dominate allocation preferences, while Germany may be looking to overhaul its crypto tax rules from 2027, potentially curbing the country’s hallmark one-year tax-free holding rule.

Coinbase shares slide on $400 million Q1 loss, revenue miss

Coinbase shares slid Thursday after the US crypto exchange reported a steep first-quarter loss while revenue missed Wall Street expectations.

Coinbase reported a net loss of $394.1 million in Q1, its second consecutive quarterly loss after reporting a $667 million loss in Q4 2025. It swung from a $65.6 million profit a year earlier. 

“Macro conditions were genuinely tough,” Coinbase chief financial officer Alesia Haas told investors on an earnings call. “Total crypto market cap and total crypto trading volume were both down more than 20% quarter-over-quarter.”

Coinbase’s earnings come as other crypto companies have also struggled to turn a profit in the first months of 2026 as a crypto market slump pushed some traders to other investments.

Meanwhile, Coinbase’s Q1 revenue was $1.41 billion, missing analyst estimates of $1.5 billion. Transaction revenue slumped 40%, while subscription and services revenue — representing its business outside trading — fell 13.5% from a year earlier. 

Its earnings per share were a $1.49 loss, compared to analysts’ expectations of 36 cents per share, which saw Coinbase dropping by 4.7% after hours on Thursday to under $184.

Fund managers double down on Bitcoin as crypto sentiment rebounds — CoinShares

Fund managers are warming back up to digital assets, with Bitcoin continuing to dominate allocation preferences even as broader crypto sentiment improves, according to a new survey by CoinShares.

The April survey gathered responses from 26 institutional investors overseeing a combined $1.3 trillion in assets under management. Allocations to digital assets remain relatively modest, at around 1%, reflecting what CoinShares described as “typical entry sizing” in the current de-risking environment.

“Bitcoin remains the digital asset with the most compelling growth outlook,” CoinShares head of research James Butterfill wrote in the report. Sentiment toward Ether (ETH) and Solana (SOL) also improved modestly compared with previous quarters.

The findings suggest institutional investors are gradually increasing exposure to crypto amid improving market sentiment, growing adoption of exchange-traded funds (ETFs) and a more favorable regulatory backdrop.

Fund managers identified Bitcoin as having the strongest growth outlook among digital assets, followed by Ether and Solana. Source: CoinShares

Germany weighs 2027 crypto tax overhaul as one-year holding rule under threat

Germany is preparing to change how it taxes Bitcoin and other cryptocurrencies from 2027, potentially ending one of Europe’s most generous long-term holding exemptions as it seeks to raise additional revenue and tighten tax compliance.

Finance Minister Lars Klingbeil said at an April 29 press conference on the 2027 federal budget that the government wants to “tax cryptocurrencies differently,” and key points include an extra 2 billion euros (about $2.3 billion) in revenue from crypto taxation and measures against financial and tax crime.

Under current rules, private crypto gains in Germany are taxable if the assets are sold within one year of acquisition, but are generally tax-free after that period. The exemption has made Germany one of the more favorable European jurisdictions for long-term Bitcoin and crypto holders.

The finance ministry’s 2022 and 2025 guidance confirmed that this one-year “Haltefrist” also applies to coins used in staking and lending, after an earlier plan for 10 years was dropped. Tax advisory firms such as Blockpit describe the rule as a key advantage for German retail investors, especially long-term holders.

Germany plans to “tax cryptocurrencies differently.” Source: Bundesfinanzministerium

Klingbeil did not explicitly reference the holding period in his April remarks. However, industry groups, including the German Bitcoin Association, say the exemption is the most likely target if the government aims to generate significant revenue from crypto taxation.

Palm Beach, Florida, May 7, 2026 – Hosted by Luna PR, the fourth edition of the Crypto Polo Cup (CPC) will take place on May 9, 2026, at the Santa Clara Polo Club, alongside Consensus Miami. The invite-only event will bring together institutional leaders, founders, and investors across the digital asset and financial sectors.

Since its debut in Palm Beach in 2022, Crypto Polo Cup has established itself as a premier gathering the intersections of digital assets, finance, and culture. Now in its fourth year, the 2026 edition will welcome more than 500 guests for a day blending sport, entertainment, and high-caliber networking.

“The Crypto Polo Cup has grown into a global meeting point for leaders across industries, creating a space where meaningful relationships are formed, strategic conversations happen, and real collaboration takes shape,” said Nikita Sachdev, Founder and CEO of Luna PR. “We are proud to bring CPC back to Florida, where it first began, and to welcome our global community during Consensus Miami week.”

The event will feature two professional polo matches, offering a distinctive setting for meaningful conversations and high-value connections. Alongside the match, guests will have the opportunity to connect with senior leaders across the financial sectors in a more intimate environment.

This year’s edition is supported by a select group of partners whose involvement reflects the continued industry backing behind CPC including TEXITcoin, Binance, Naoris, AMINA, Solana Company, CakeWallet, Unicoin, Quantum, CoinRoutes, and Sailo Tech.

This year’s ambassador lineup spans across government, global exchange leadership, venture capital, media and digital asset innovation, reflecting the breadth of industries that CPC brings. Ambassadors include:

• Michael Carbonara, Congressional Candidate FL-22
• Rachel Conlan, Global CMO of Binance
• Yana Prikhodchenko, CEO of Cointelegraph Global
• Tess Hau, Founder of Tess Ventures
• Silvina Moschini, Founder of Unicorn Hunters
• Michael Terpin, Founder and CEO of Transform Ventures
• Matthew Jason Nordgren, Founder and Managing Partner of Arcadian Capital
• Ran Neuner, Founder of Crypto Banter
• Gary Hopkinson, Managing Director of Clear Street
• Analys Falchuk, Investor Relations Manager, OG Advisory Group.

Their participation reinforces the CPC’s position as a meeting point for leaders shaping the future of technology, finance, media, and global markets.

CPC continues to serve as a platform to major industry gatherings, offering a more informal environment for connection and collaboration. Attendance is invitation only. Limited media access is available upon request.

About Crypto Polo Cup

The Crypto Polo Cup is where the world of investment, innovation, and influence converges. Since its inception in Palm Beach, Florida, in 2022, it has become a premier invitation-only event that attracts the biggest players in venture capital, blockchain, and emerging technology. With billions in investment capital represented on and off the field, this is where deals are made, partnerships are formed, and the future of Web3 takes shape.

Powered by Luna Media Corp, a global powerhouse that houses eight companies, including Luna PR – the leading PR agency in Web3, the Crypto Polo Cup is a gathering of visionaries who are shaping the future of technology and finance.

www.cryptopolocup.com

LinkedIn | Instagram | X

Media contact

Bitcoin advocate Samson Mow defended Michael Saylor’s suggestion that Strategy could sell some of its Bitcoin (BTC), arguing that keeping the option open gives the company more flexibility in public markets.

“Never selling limits optionality. Public markets are war. In war, you need all available tools at your disposal,” Mow wrote after Saylor said during Strategy’s first-quarter earnings call that the company could sell some Bitcoin in the future.

Mow added:

“The more tools Strategy holds, the fewer angles its adversaries have. A company with real optionality is hard to game: it might sell, hedge, issue, or buy. A company that has publicly vowed to only ever do one thing has handed a map to short sellers and arbitrageurs.” 

Strategy is the largest publicly traded Bitcoin treasury company, with 818,334 BTC, according to BitcoinTreasuries. Some analysts have warned that any sales by the company could weigh on spot Bitcoin prices.

Strategy’s total BTC holdings over time. Source: Strategy

Related: Strategy takes Bitcoin buying breather ahead of Q1 earnings report

As he signals potential BTC sales, Saylor says company can fund dividends “forever” on BTC alone

“We’ll probably sell some Bitcoin to fund a dividend, just to inoculate the market, just to send the message that we did it,” Saylor said during the earnings call.

He said that if the price of BTC appreciates by more than 2.3% annually, the company can fund its dividends “forever” and would also allow Strategy to pay dividends “without selling a single share of stock.”

“We could stop selling MSTR common stock right now,” Saylor said, adding, “We can fund the dividends with Bitcoin sales.”

Saylor discusses paying dividends using BTC appreciation. Source: Strategy

Saylor said Strategy could keep funding dividends if it continues issuing STRC preferred stock and Bitcoin rises above the breakeven level, while still increasing its total BTC holdings.

The average cost of Strategy’s BTC holdings is $75,537 apiece, according to the company’s website. At last look on Thursday, Bitcoin was changing hands at about $79,976, according to CoinMarketCap.

Strategy funds its BTC purchases through a mixture of corporate debt and equity instruments, a practice that has raised concerns with some investors over shareholder dilution and leverage-fueled buying.

Magazine: Bitcoin’s ‘biggest bull catalyst’ would be Saylor’s liquidation: Santiment founder

Prediction marketplace Kalshi reached a $22 billion valuation after closing a $1 billion Series F funding round, underscoring venture capital interest in regulated event trading.

The new valuation doubles Kalshi’s valuation from just five months ago. The funding round was led by Coatue Management, with participation from Andreessen Horowitz, Sequoia Capital, Morgan Stanley and Ark Invest.

The raise comes as investors increasingly view prediction markets as one of the fastest-growing segments of digital finance. Andreessen Horowitz’s crypto unit, a16z crypto, recently raised $2.2 billion for its latest fund and identified prediction markets as a major investment theme.

Kalshi has emerged as one of the industry’s dominant platforms. A company spokesperson told Bloomberg that Kalshi’s annualized revenue run rate has surpassed $1.5 billion.

Unlike rival Polymarket, which operates on decentralized blockchain infrastructure, Kalshi runs a centralized and federally regulated marketplace that allows users to trade on the outcomes of real-world events, including elections, economic data releases and sports. 

Together, Kalshi and Polymarket accounted for the bulk of the more than $25 billion in prediction market trading volume recorded last month.

Prediction market volumes by platform. Source: Bitget Wallet

Kalshi has also expanded its crypto ambitions. The company recently appointed John Wang as its head of crypto, and he told Forbes, “We would like to have Kalshi’s prediction markets in every large crypto app.”

Related: Polymarket odds of Hormuz Strait traffic normalizing by end of May spike to 73%

Regulatory scrutiny intensifies as prediction markets expand

The latest wave of venture backing comes as Wall Street analysts argue that prediction markets are evolving beyond retail speculation into institutional financial tools.

In a recent research note, Bernstein said prediction markets are entering an “institutional era,” driven by demand for bespoke block trades and custom event contracts that allow firms to hedge against specific macro and geopolitical risks.

At the same time, the sector faces mounting legal and political scrutiny in the United States.

According to NPR, Kalshi is involved in at least 19 federal lawsuits over whether its event contracts violate state gambling laws.

States including Massachusetts, New Jersey, Arizona, Nevada, Illinois and Connecticut have challenged Kalshi’s operations, arguing that some of its sports and event-based contracts amount to unlicensed gambling.

The political pressure has also intensified in Washington. Democratic lawmakers have called for tighter oversight of prediction markets following concerns over “suspicious trades” tied to geopolitical events.

Source: Stephanie Cutter

In response, Kalshi has expanded its policy and regulatory bench. The company recently brought on former Obama staffer Stephanie Cutter as a policy adviser, a move widely seen as an effort to strengthen its relationships in Washington and navigate the growing scrutiny surrounding prediction markets.

Related: Crypto Biz: Capital has no consensus

Bitcoin (BTC) price dropped to $79,800 on Thursday after being rejected at a key dynamic resistance level. The pullback occurred despite the weekly spot Bitcoin exchange-traded fund (ETF) inflows surging past $1 billion for the first time since January, but technical data suggests the correction may be short-lived. 

Bearish divergences point to where BTC price may go

Bitcoin’s dip below $80,000 came amid a bearish divergence in the relative strength index (RSI) on the one-hour and four-hour charts. A bearish divergence occurs when BTC forms higher highs while the RSI weakens across lower timeframes, signaling fading buying momentum during a rally.

BTC/USDT, four-hour chart. Source: Cointelegraph/TradingView

A hold above the weekly open at $78,500 could stabilize the short-term price action. The key technical support range remains between $76,000 and $78,000, where the daily fair value gap (FVG) aligns with Bitcoin’s 200-day exponential moving average (EMA). If the correction continues, BTC could retest the FVG zone before attempting another rebound above its recent high at $82,800.

A fair value gap marks an area where a sharp price movement previously occurred with limited trading activity, leaving an imbalance that often becomes a liquidity zone during retracements.

Crypto trader Jelle said the “200-day MA/EMA cluster” was acting as resistance, while also identifying $78,000 as the first major support area. According to Jelle, a 200-day moving average retest could allow Bitcoin to retest higher price targets.

Meanwhile, crypto trader Killa XBT identified the $76,300 to $74,700 range as a deeper support zone if selling pressure continues. The trader pointed to the weekly open near $78,500 as the main short-term level that bulls are attempting to defend. 

BTC one-day chart analysis by Killa. Source: X

Related: Bitcoin analysts say this level must break for BTC price to confirm bottom

Can spot ETF inflows offset price weakness?

Spot Bitcoin ETF demand strengthened sharply this week. Net inflows reached $1.05 billion, marking the strongest weekly intake since the third week of January. A positive close on Friday would confirm the largest weekly ETF inflow return in nearly four months.

Spot BTC ETF net inflows. Source: SoSoValue

Meanwhile, Swissblock data shows that the Bitcoin Risk Index has reset to near zero, while ETF net flows turned positive again at roughly 3,000 BTC. Historically, elevated risk readings aligned with the ETF outflows and heavier selling pressure across the market. 

Risk index and BTC ETF net flows. Source: Swissblock/X

The resets into the low-risk zone often coincided with renewed accumulation near the major support clusters. The analysis added, 

“That synchronization is still in place. Even when the Risk Index ticked slightly higher last week, ETF selling appeared briefly, but accumulation quickly resumed. That tells us ETF demand is absorbing selling pressure. This remains a flow-driven breakout.”

Related: Bitcoin market dominance moves above 61%: Will altcoins follow?