Bitcoin Plunge Tests Mining Economics as Costs Vary Widely

Bitcoin’s sharp decline below $63,000 has pushed its price perilously close to—and in some cases below—the estimated cost of mining the cryptocurrency. The sell-off triggered over $2 billion in liquidations, raising concerns about miner profitability as production costs vary dramatically across the industry. Analysts caution that widely shared mining cost estimates may be misleading, with real expenses depending heavily on energy deals and operational efficiency.

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Bitcoin’s Identity Crisis: Slow Security vs. Fast Markets

Bitcoin is grappling with a fundamental tension between its original design as secure, long-term digital gold and the market’s growing demand for speed and programmability. According to a NYDIG research report, while retail traders often misinterpret price corrections as failures, institutional players view them as necessary ‘tourist flushes’ driven by shifting macro liquidity. The core challenge is Bitcoin’s ‘programmability gap,’ which new Layer 2 infrastructure like Bitcoin Hyper ($HYPER) aims to address by integrating the Solana Virtual Machine (SVM), allowing Bitcoin to retain its security while enabling high-speed decentralized applications.

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Tokenized Assets Need Regulatory Evolution for DeFi Integration

The tokenization of real-world assets like stocks is poised to reshape financial markets, but its immediate impact on the cryptocurrency ecosystem will be muted without significant regulatory evolution, according to analysis from NYDIG. Greg Cipolaro, the firm’s Global Head of Research, argues that while blockchain networks like Ethereum will earn initial revenue from transaction fees, the transformative benefits—enhanced network effects, interoperability, and composability—hinge on regulatory frameworks that enable deeper integration with decentralized finance (DeFi). This cautious outlook underscores that the long-term promise of asset tokenization is tethered not to technology alone, but to policy adaptation.

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Bitcoin’s Rally Drivers Now Fueling Decline: NYDIG

The same factors that propelled Bitcoin to record highs are now driving its sharp decline, according to NYDIG research. Exchange-traded fund inflows and corporate treasury demand have reversed into significant outflows, suggesting actual capital flight rather than mere negative sentiment as Bitcoin prices drop to multi-month lows.

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Bitcoin’s Price Driven by Dollar Strength, Not Inflation

New research from NYDIG reveals Bitcoin’s price movements are more closely tied to US dollar strength and liquidity conditions than direct inflation links. The analysis shows Bitcoin is developing an inverse relationship with the dollar similar to gold, while on-chain data indicates renewed selling pressure. This challenges the long-held narrative of Bitcoin as primarily an inflation hedge.

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Strategy Buys $27M Bitcoin Before Price Plunge

Strategy, the world’s largest corporate Bitcoin holder, made a $27 million cryptocurrency purchase last week that now appears poorly timed, acquiring 220 Bitcoin at an average price of $123,500 just before the digital asset’s price declined significantly. The company’s latest acquisition, funded through preferred share issuance, represents its third-smallest Bitcoin purchase this year and comes as the firm’s stock premium relative to its Bitcoin holdings has dramatically decreased, raising questions about its funding strategy moving forward.

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NYDIG: Retire Misleading Crypto Valuation Metric mNAV

Greg Cipolaro, global head of research at NYDIG, has issued a forceful call for the crypto industry to abandon the widely used market to net asset value (mNAV) metric, branding it as fundamentally flawed and misleading for investors. In a recent note, Cipolaro declared that mNAV should be ‘deleted and forgotten,’ arguing that it fails to accurately capture company value and serves no useful purpose in investment analysis.

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Bakkt Stock Soars 40% as Crypto Veteran Joins Board

Bakkt Holdings saw its share price surge more than 40% on Monday following the announcement that crypto industry veteran Michael Alfred is joining its board of directors. The appointment signals Bakkt’s intensified focus on digital asset infrastructure as the company undergoes significant restructuring. Alfred brings substantial credibility from his track record at Digital Assets Data and investments in prominent crypto firms.

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Bitcoin Premiums Narrow as DAT Firms Face Market Pressure

New York Digital Investment Group (NYDIG) has issued a warning about growing instability in Bitcoin-focused investment vehicles. According to their research, the gap between share prices and net asset values (NAV) of companies like Metaplanet and Strategy continues to narrow even as Bitcoin achieves record prices. Analyst Greg Cipolaro identifies multiple contributing factors including investor concerns about upcoming supply unlocks, evolving corporate strategies, increased share issuance, profit-taking behavior, and lack of differentiation among treasury management approaches. This compression suggests that markets are becoming more skeptical about the premium valuation of Bitcoin holding companies relative to their actual Bitcoin holdings, potentially indicating a shift in investor sentiment toward more conservative valuations despite strong underlying asset performance.

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US Bank Resumes Bitcoin Custody for Institutions After 3-Year Pause

Minneapolis-based US Bank, with over $685 billion in assets, has resumed its Bitcoin custody services for institutional investment managers after a three-year pause caused by regulatory challenges. The service, initially launched in 2021, was suspended following SEC Staff Accounting Bulletin 121, which required banks to treat held crypto assets as on-balance-sheet liabilities, making custody operations impractical. With recent regulatory changes, including the rescinding of SAB 121 and improved clarity under new leadership, the bank is now able to offer custody services again through its partnership with NYDIG. The service remains limited to institutional clients and includes support for Bitcoin ETFs, providing comprehensive custody and administration solutions.

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U.S. Bank Resumes Bitcoin Custody for Institutions

U.S. Bank has reinstated its cryptocurrency custody services specifically for institutional investment managers, marking a significant return to digital asset custody after halting operations in 2022. The pause was triggered by SEC Staff Accounting Bulletin No. 121, which created regulatory hurdles for banks custodying digital assets. With the rescission of this bulletin in January and broader regulatory clarity under the current administration, the bank is now offering Bitcoin custody alongside support for Bitcoin ETFs. The service expansion reflects both improved regulatory conditions and growing client demand, with U.S. Bank partnering with NYDIG to provide these services while maintaining strict risk and compliance standards for additional cryptocurrency evaluations.

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