Institutional adoption continued to reshape the digital asset market this week, even as geopolitical tensions reminded investors that crypto remains sensitive to broader macro conditions.
Digital asset funds suffered more than $1 billion in outflows as traders reduced risk exposure amid fading hopes for a durable ceasefire between the United States and Iran. At the same time, Tether tightened its grip on Twenty One Capital, Bernstein argued that Bitcoin miners are carving out a strategic role in the race to build artificial intelligence infrastructure, and Polymarket teamed up with Nasdaq to launch prediction markets tied to private companies.
This week’s Crypto Biz underscores how institutions continue to influence the digital asset ecosystem.
Crypto funds bleed $1 billion as geopolitical tensions trigger risk-off move
Digital asset investment products posted more than $1 billion in outflows last week as escalating tensions in the Middle East sent investors to the sidelines.
According to CoinShares data, the withdrawals marked one of the largest weekly reversals so far this year, with Bitcoin and Ether products accounting for the bulk of the redemptions. The sell-off came as markets dialed back hopes for a durable ceasefire between the US and Iran, prompting a broader flight from risk assets despite Bitcoin’s reputation as a macro hedge.
The pullback underscores how quickly sentiment can shift when geopolitical shocks hit global markets. Institutional demand for crypto remains structurally stronger than in prior market cycles, but the latest outflows suggest allocators are still treating digital assets as part of the broader risk-on complex during periods of heightened volatility.
Despite last week’s outflows, crypto exchange-traded products have recorded nearly $4.9 billion in year-to-date inflows. Source: CoinShares
Tether deepens its Bitcoin treasury bet with SoftBank-backed Twenty One
Tether has acquired SoftBank’s stake in Twenty One Capital, tightening its grip over one of the crypto industry’s largest corporate Bitcoin vehicles.
The stablecoin issuer purchased the Japanese conglomerate’s roughly 26% stake in the company for an undisclosed amount as Twenty One Capital prepares to broaden its business beyond Bitcoin accumulation into Bitcoin-related financial services. Led by Strike founder Jack Mallers, Twenty One launched with backing from Tether, Bitfinex, Cantor Fitzgerald and SoftBank, and has accumulated more than 42,000 BTC on its balance sheet.
The transaction further consolidates Tether’s influence over the company as institutional demand for Bitcoin treasury exposure expands.
Twenty One Capital has amassed a $3.34 billion Bitcoin position. Source: BitcoinTreasuries.NET
Bernstein says Bitcoin miners are becoming strategic assets in the AI race
Bitcoin miners are emerging as valuable infrastructure partners for artificial intelligence developers, giving these companies a longer runway to diversify into data centers and high-performance computing, according to Bernstein research.
Bernstein’s analysts said miners possess two resources that are increasingly scarce amid the AI boom: large-scale power access and data center capacity. Companies that built their operations around energy-intensive Bitcoin mining are now repurposing portions of that infrastructure to host high-performance computing workloads for AI customers.
Bernstein argued that the shift could unlock new revenue streams and higher valuations for miners, particularly as block rewards become less lucrative following each Bitcoin halving cycle. The convergence of crypto and AI is transforming what were once cyclical commodity businesses into strategic infrastructure plays tied to two of the market’s most capital-intensive industries.
11 publicly traded crypto miners have expanded their planned power portfolios. Source: Bernstein
Polymarket partners with Nasdaq to bring prediction markets to private companies
Polymarket has partnered with Nasdaq to launch a category of prediction markets that lets users forecast the future valuations of private, pre-IPO companies.
The initiative will allow participants to trade on private-company milestones, including valuation targets, IPO timing and secondary market activity. By expanding beyond elections and macro events, the partnership pushes prediction markets deeper into the world of venture capital and startup investing.
The collaboration also highlights how institutions are warming to event-based forecasting. For crypto-native platforms like Polymarket, alliances with established financial infrastructure providers could help legitimize prediction markets as an alternative tool for price discovery and investor sentiment.
Source: Cointelegraph
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