The Daily: Bitcoin and ETH bounce after heavy ETF outflows, Bitwise sees BTC beating traditional assets, the SEC chair calls most crypto tokens non-securities, and more

The Block

Aug 21, 2025 04:38:32

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

Happy Wednesday, and welcome to The Daily.

Bitcoin briefly fell near $113,000 and ether hit $4,100 before rebounding slightly — as spot ETFs for both saw a combined $945 million in outflows Tuesday. Still, Bitwise expects bitcoin to outperform traditional assets over the next decade as volatility declines.

Stablecoins remain in the spotlight. Goldman Sachs sees the market reaching trillions of dollars, China may allow yuan-backed stablecoins to expand the currency’s global use, and U.S. crypto groups are pushing back against banks trying to amend the GENIUS stablecoin law.

In Washington, SEC Chair Paul Atkins said “very few” tokens are securities and pledged to future-proof crypto. Sen. Lummis is targeting year-end for market structure legislation, backing the House's recently passed market structure bill, while industry groups are urging Trump to appoint Brian Quintenz as CFTC Chair.

Elsewhere, Strategy’s MSTR stock hit a low not seen since April as it eyes a larger equity raise to fund more bitcoin buys. And the Bitcoin DeFi protocol Lombard is launching a $450 million BARD token community sale via Buidlpad.

P.S. I also write The Funding, a biweekly newsletter covering crypto VC trends. The latest edition explored whether massive treasury deals are hurting early-stage startup funding. Subscribe here.

Let’s dive in.

Spot Bitcoin and Ethereum ETFs see large outflows

Spot bitcoin and ether ETFs posted $523 million and $422 million in daily outflows on Tuesday, respectively, among the largest since launch.

Fidelity and Grayscale led the redemptions, which analysts say reflect institutional de-risking ahead of macro events.

"The scale of these outflows suggests a shift in institutional positioning, either funds are rotating out to lock in profits at recent highs and reallocate into cash or Treasuries, or we are seeing a broader de-risking response to renewed inflation concerns, stronger U.S. dollar moves and uncertainty around the Federal Reserve’s policy path," said Rachael Lucas, crypto analyst at BTC Markets.

The Federal Reserve’s July meeting minutes and Powell’s Jackson Hole speech later this week could determine whether flows rebound or worsen.

Strategy’s MSTR drops to April lows

Strategy’s MSTR stock fell 7.43% to $336.57 on Tuesday, its lowest since April. The drop followed the firm’s announcement to lower its threshold for issuing new shares.

The company can now issue MSTR even below 2.5x mNAV, a reversal from July’s earnings call guidance. The move aims to give Strategy the flexibility to raise capital for purposes such as covering debt interest and paying dividends.

The announcement sparked backlash from observers, accusing Strategy of flip-flopping on promises. CEO Michael Saylor defended the move, saying it is aimed "to provide greater flexibility in executing our capital markets strategy."

Other crypto stocks also dropped sharply on Tuesday, including Coinbase (-5.8%) and Galaxy (-10%).

SEC Chair: 'Very few' crypto tokens are securities

SEC Chair Paul Atkins said at the Wyoming Blockchain Symposium that “very few” crypto tokens qualify as securities, a sharp contrast to his predecessor, Gary Gensler’s, stance.

However, he also noted that classification depends on how the token is packaged and sold, not the asset itself.

He called for a framework that “future proofs” crypto against “regulatory mischief” and stressed collaboration with Congress and other agencies.

Atkins recently also introduced “Project Crypto” as part of his push to modernize securities laws and embrace onchain markets.

Lombard to launch BARD token at $450M valuation on Buidlpad

Bitcoin DeFi protocol Lombard will launch its BARD token via a $6.75M community sale on Buidlpad, implying a $450M fully diluted valuation.

The sale opens for registration on Aug. 26, with contributions accepted between Sept. 1–2; users can buy using USD1, BNB, or LBTC.

LBTC holders and Lombard users will get priority access, and 10% of the allocation is reserved for creators and educators.

Lombard also introduced the Liquid Bitcoin Foundation, a new governance body to manage grants, research, and partnerships.

Lombard’s core product, LBTC, has $1.5B TVL and integrations with Aave, Etherfi, Pendle, and others.

Bitwise sees bitcoin outperforming all major assets over the next decade

Bitwise forecasts bitcoin to deliver 28% annualized returns over the next 10 years, with declining volatility and low correlations to traditional asset classes.

The firm’s upcoming Bitcoin Long-Term Capital Market Assumptions report targets institutional platforms now treating BTC as a core portfolio asset.

Bitwise said 12 institutional platforms have requested long-term BTC projections this year, compared to zero from 2017 to 2024 — highlighting growing mainstream adoption.

The forecast frames bitcoin as diversification-friendly, with correlations between −0.5 and 0.5 versus major assets.

The full report, publishing later this week, will compare bitcoin forecasts to traditional asset outlooks from BlackRock, Vanguard, JPMorgan, and others.

In the next 24 hours

Atlanta Fed President Raphael Bostic speaks on Thursday, while the U.S. releases fresh data on initial jobless claims, PMI figures, and existing home sales.

In Europe, markets will watch the eurozone’s flash PMI prints.

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