The Daily: ‘Bears in control’ as bitcoin drops toward $65K, Binance denies issuing cease-and-desist letter over insolvency claims, and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

Happy Thursday! Bears are well and truly in control of the crypto market, according to analysts at Glassnode, with onchain indicators pointing to forced selling, thin spot demand, and fading institutional support.

In today’s newsletter, bitcoin BTC drops back below the prior 2021 cycle peak as panic sets in, Binance denies issuing a cease-and-desist letter over insolvency claims, spot Bitcoin ETFs see another half a billion dollars worth of outflows, and more.

Meanwhile, Tether USDT deepens its ties with Anchorage Digital through a $100 million equity investment at a $4.2 billion valuation.

P.S. Don’t forget to check out The Funding, a biweekly rundown of crypto VC trends. It’s a great read — and just like The Daily, it’s free to subscribe!

‘Bears in control’: Bitcoin erases gains since 2021 all-time high as price drops back below $69K

Bitcoin slid back below $69,000 on Thursday, erasing all gains since its prior 2021 cycle all-time high as selling pressure intensified across spot and derivatives markets.

• Onchain data from Glassnode shows accelerating realized losses and structurally weak spot demand, signaling a shift into a decisively defensive market phase.
• The breakdown below bitcoin’s “True Market Mean” — an onchain cost basis metric tracking the average acquisition price of actively circulating supply — confirmed a broader market deterioration that the Glassnode analysts said resembles the early stages of prior bear-market transitions.
• Derivatives markets amplified the selloff, triggering over $1 billion in largely long-side liquidations as leveraged positioning unwound into a thin spot backdrop.
• Institutional support has also faded as spot Bitcoin ETFs renewed outflows and corporate treasury positions slipped underwater, removing a key source of demand, they said.
• The analysts warned that without a sustained return of spot buyers, any near-term rallies are likely corrective, leaving bitcoin vulnerable to further downside during a prolonged reset.
• Meanwhile, bitcoin could fall further toward $60,000 as onchain data signals the current downturn is deepening and now looks worse than the early phase of the 2022 bear market, according to CryptoQuant.

Binance denies issuing legal threats over insolvency allegations

Binance denied issuing a cease-and-desist letter after a social media user claimed the crypto exchange had threatened legal action over allegations of insolvency.

• Binance said the document that was shared online was fake, calling it a “forgery with a very active imagination” as the post continued to circulate widely on X.
• The episode comes amid renewed insolvency rumors tied to the October 2025 deleveraging event, which Binance and former CEO Changpeng “CZ” Zhao have repeatedly dismissed as unfounded.
• Ongoing distrust has fueled calls for mass withdrawals, though co-founder and current co-CEO Yi He said the campaign has actually coincided with rising balances while framing withdrawals as a good stress test for exchanges.

Spot Bitcoin ETFs register another $545 million in net outflows

U.S. spot Bitcoin ETFs logged a second straight day of withdrawals, with investors pulling $545 million on Wednesday to extend year-to-date net outflows to more than $1.8 billion.

• BlackRock’s IBIT led the redemptions with $373.4 million in net outflows, followed by Fidelity’s FBTC and Grayscale’s GBTC as bitcoin prices slid further.
• Despite the pullback, the combined U.S. spot Bitcoin ETFs have still amassed around $55 billion in net inflows since launch, with assets under management equal to about 6.4% of bitcoin’s market cap.
• Flows diverged across other crypto products, with U.S. spot Ethereum ETFs and spot Solana ETFs seeing $79.5 million and $6.7 million in net outflows, respectively, while spot XRP ETFs bucked the trend with $4.8 million in net inflows.

House launches probe into $500 million UAE deal linked to World Liberty Financial

Senior House Democrat Rep. Ro Khanna launched a probe into the Trump family-linked World Liberty Financial over a reported $500 million investment tied to the UAE royal family.

• The inquiry centers on a Wall Street Journal-reported deal granting a 49% stake to an entity controlled by Sheikh Tahnoon bin Zayed, with payments directed to Trump family entities and firms affiliated with Middle East special envoy Steve Witkoff just before Trump’s inauguration.
• Khanna said that the financial ties raise national security and constitutional concerns, citing links to Chinese interests and potential influence over U.S. AI chip export approvals.
• The representative’s letter demands documents and answers by March 1, including details on UAE- and China-linked transactions, a Binance deal, and alleged emoluments clause violations, with World Liberty Financial yet to respond publicly.

‘We don’t friggin need more copypasta EVM chains’: Vitalik Buterin says

Vitalik Buterin said copy-paste EVM chains and general-purpose rollups are a “dead end” as Ethereum’s base layer scales fast enough to supply abundant EVM blockspace.

• “We don’t friggin need more copypasta EVM chains, and we definitely don’t need even more Layer 1s,” Buterin wrote. “Layer 1 is scaling and is going to bring lots of EVM blockspace.”
• Buterin also narrowed the case for Layer 2s, urging builders to pursue specialized features such as privacy, app-specific efficiency, ultra-low latency, and algorithmic transparency.

In the next 24 hours

• It’s quiet on the economic calendar front.
• Hyperliquid, Wormhole, Berachain, and Axie Infinity are among the crypto projects set for token unlocks.
• Digital Assets Forum concludes in London.

Never miss a beat with The Block’s daily digest of the most influential events happening across the digital asset ecosystem.

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