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Policymakers across North America are worrying about what the energy usage of crypto, artificial intelligence and other data centers might mean for the affordability of regular customers, but crypto investment firm Paradigm argues that the government should leave bitcoin mining operations out of it.
Mining bitcoin does take a tremendous amount of electricity. But the business model only works when that energy is particularly cheap — such as when it’s provided by off-peak renewable sources — and can be given back at the times when it’s most needed by the public, according to a report produced by Paradigm, which has miner Genesis Digital Assets in its investment portfolio.
The report, viewed by CoinDesk, disputes widely shared claims about bitcoin mining’s energy use and waste issues by citing data that the sector actually uses about 0.23% of global energy and emits about 0.08% of the carbon. And the miners have to operate under a “break even price” per megawatt hour of electricity to enable profits.
“This means that by its very nature, Bitcoin mining counter-balances the bulk of the average community’s energy consumption, bringing equilibrium to the grid — not strain,” according to the report compiled by Justin Slaughter, vice president for regulatory affairs at Paradigm, and Veronica Irwin. “It is, in a word, bringing balance to our energy force.”
Federal and state policy efforts are beginning to pile up that would seek to restrict data centers and digital mining operations, which could arguably fit under the “data center” definition in U.S. law. On Thursday, U.S. Senators Richard Blumenthal, a Connecticut Democrat, and Josh Hawley, a Missouri Republican, introduced a bill to stop data centers from pushing up electricity costs for consumers, though the legislative text doesn’t explicitly mention bitcoin or crypto. New York state lawmakers have similarly been pursuing a data-center moratorium.
“Artificial intelligence (AI) and cryptomining are fueling a rising demand for energy driven by massive, energy-intensive data centers,” several Democratic U.S. senators wrote in a November letter to the chief of the Federal Energy Regulatory Commission that asked for “immediate action” to protect consumers.
In Canada, British Columbia said in October it planned to halt new crypto mining operations from its energy grid.
The Paradigm report countered, “Bitcoin miners who use energy that would otherwise go to waste, or who participate in state-led programs to give energy control agencies more control over the grid, should be rewarded for their good behavior.”
Financial markets are expected to experience a turbulent start in 2026 before turning positive. A significant market downturn is anticipated before a sharp recovery. Short to medium-term indicators suggest a high risk of market correction.
Darius Dale is the Founder and CEO of 42 Macro, an independent research firm delivering systematic macro risk management insights to institutional investors, financial advisors, and high net worth individuals. Prior to founding 42 Macro, he served as Managing Director and Partner at Hedgeye Risk Management, where he headed the macro team and architected the firm’s economic outlook and investment strategy. His award-winning research on macro risk management frameworks is widely sought after in the institutional investment community.
2026 is likely to be an up year for most financial markets, but the beginning of the year may be turbulent.
— Darius Dale
Darius thinks that one year from now in January 2027 we’ll probably look back on 2026 as an up year for most financial markets.
— Darius Dale
Put your seat belt on for the first few months of the year which he thinks could be quite turbulent.
— Darius Dale
The markets are likely to experience a significant downturn before recovering sharply.
— Darius Dale
We thought the markets would crash to price that in and ultimately recover very sharply and violently to the upside.
— Darius Dale
There is a high risk of a correction in financial markets over the short to medium term.
— Darius Dale
Both of those are breaching their respective bull market peak thresholds.
— Darius Dale
This is about the third highest credit bullish positioning we’ve ever seen.
— Darius Dale
The current market dynamics suggest we are likely due for a correction in the near term.
— Darius Dale
Four of the six are currently headwinds for the market now.
— Darius Dale
Historically when you have these capex bubbles… those capex bubbles tend to precede secular bear markets.
— Darius Dale
The monetary policy cycle will transition from being a headwind to a tailwind for risk assets within the next three to six months.
— Darius Dale
We expect the monetary policy cycle which is currently a headwind for risk assets will ultimately transition to becoming a tailwind.
— Darius Dale
Fiscal policy is likely to transition from a headwind to a tailwind within the next three to six months.
— Darius Dale
The fiscal policy cycle which is currently a headwind for the financial markets is ultimately gonna become a tailwind.
— Darius Dale
The current liquidity cycle is a modest headwind but is expected to transition to a tailwind over the medium term.
— Darius Dale
We got a modest headwind right now of the liquidity cycle ultimately we think that’ll transition to becoming a tailwind.
— Darius Dale
The bond market is becoming less concerned about the Federal Reserve making a dovish policy error that could reignite inflation.
— Darius Dale
Last year restored crypto’s institutional footing. This year, according to Silicon Valley Bank (SVB), is when it becomes more integrated into the financial system.
Regulatory clarity improved in 2025, institutional engagement accelerated and capital markets reopened. Now the focus is shifting from price cycles to infrastructure as digital assets become more deeply embedded into payments, custody, treasury management and capital markets.
“Regardless of how tangible or visible, all the forces shaping crypto today share a common thread: Crypto is moving from expectations to production. Pilot programs are scaling and capital is consolidating,” Anthony Vassallo, senior vice president of crypto at SVB, told CoinDesk in an interview.
The bank, which maintains more than 500 relationships with crypto companies and venture firms investing in the sector, says institutional capital, consolidation, stablecoins, tokenization and AI are converging to reshape how money moves.
After its 2023 collapse, SVB was bought by North Carolina–based First Citizens Bank and now operates within a top-20 U.S. bank with $230 billion in assets. In 2025, it added 2,100 clients and ended the year with $108 billion in total client funds and $44 billion in loans.
“The suits and ties have arrived,” according to the bank’s 2026 outlook report.
Venture funding in U.S. crypto companies rose 44% last year to $7.9 billion, according to PitchBook data cited by SVB. While the deal count fell, median check sizes climbed to $5 million as investors concentrated capital into stronger teams. Seed valuations jumped 70% from 2023 levels.
The bank warns that demand for institutional-grade crypto companies could outstrip the number of investable firms.
“In 2026, conditions are ripe for continued growth in VC investment in crypto. As institutional adoption accelerates, driving larger venture capital checks, we expect continued capital concentration in fewer companies with investors prioritizing higher-quality projects and follow-ons into proven teams,” Vassallo said.
“For end users, the result will be a more seamless experience across everyday financial interactions, from sending cross-border payments to managing an investment portfolio.”
Corporate balance sheets are reinforcing the shift. At least 172 public companies held bitcoin in the third quarter of 2025, up 40% from the second, collectively controlling roughly 5% of circulating supply, according to data referenced by SVB.
A new class of digital asset treasury companies, firms that treat crypto accumulation as a core strategy, has emerged. The bank expects consolidation as standards tighten and volatility tests business models.
Meanwhile, traditional banks are moving deeper into the sector. JPMorgan, the largest U.S. bank by assets, plans to accept bitcoin and ether as collateral, Bloomberg reported last year. SoFi Technologies offers direct digital asset trading. U.S. Bank provides custody through NYDIG. SVB expects more institutions to roll out lending, custody and settlement products as compliance guardrails solidify.
Why build when you can buy?
More than 140 venture capital-backed crypto companies were acquired in the four quarters ending in September, a 59% year-over-year jump, according to the bank’s analysis of PitchBook data. Coinbase’s $2.9 billion acquisition of Deribit and Kraken’s $1.5 billion purchase of NinjaTrader underscored the scale.
The trend extends to banking charters. In 2025, 18 companies applied for charters from the Office of the Comptroller of the Currency (OCC), most of them blockchain-enabled firms. The OCC granted conditional approval to digital-asset-focused trust banks including custody provider BitGo (BTGO), Circle Internet (CRCL), the company behind the second-largest stablecoin, trading platform Fidelity Digital Assets, stablecoin issuer Paxos and payments network Ripple.
For SVB, that marks a turning point: stablecoin and custody infrastructure moving inside the federal banking perimeter. The bank expects traditional financial institutions to accelerate dealmaking rather than risk being disrupted by vertically integrated crypto-native rivals.
“We expect M&A to set a record again in 2026. As digital asset capabilities
become table stakes for financial services, companies will focus on acquisition strategies instead of building products from scratch,” Vassallo says.
“To meet market demands ranging from stablecoin capabilities to full-stack crypto banks, exchanges, custodians, infrastructure providers and brokerages will consolidate into multiproduct companies,” he said.
Stablecoins, SVB said, are evolving from trading tools into digital cash.
With near-instant settlement and lower transaction costs than interbank transfer system ACH or card networks, dollar-backed tokens are attractive for treasury operations, cross-border payments and business-to-business settlement.
Regulatory clarity is accelerating adoption. The U.S. GENIUS Act, passed in July, established federal standards for stablecoin issuance, including 1:1 reserve backing and monthly disclosures. Similar frameworks are in place in the EU, U.K., Singapore and the UAE.
Beginning in 2027, only permitted entities such as banks or approved nonbanks will be allowed to issue compliant stablecoins in the U.S. SVB expects issuers to spend 2026 aligning products with federal oversight.
Banks are already experimenting. Société Générale introduced a euro stablecoin. JPMorgan expanded JPM Coin to public blockchains. A group including PNC, Citi and Wells Fargo is exploring a joint token initiative.
Venture dollars are following. Investment in stablecoin-focused companies surged to more than $1.5 billion in 2025, up from less than $50 million in 2019, according to SVB.
In 2026, the bank expects tokenized dollars to move into core enterprise systems, embedded in treasury workflows, collateral management and programmable payments.
Real-world asset tokenization is scaling. Onchain representations of cash, Treasuries and money-market instruments exceeded $36 billion in 2025, according to data cited by the bank.
Funds from BlackRock (BLK) and Franklin Templeton have amassed hundreds of millions in assets, settling flows directly onchain. ETF issuers and asset managers are testing blockchain-based wrappers to reduce transfer costs and enable intraday settlement. Robinhood (HOOD) now has tokenized stock exposure for European users and plans U.S. expansion.
SVB sees private and public markets converging on shared settlement rails, with tokenization expanding beyond Treasuries into private markets and consumer-facing applications.
Then there’s the convergence with AI. In 2025, 40 cents of every venture dollar invested in crypto went to companies also building AI products, up from 18 cents the year prior, according to SVB’s analysis. Startups are building agent-to-agent commerce protocols, and major blockchains are integrating AI into wallets.
Autonomous agents capable of transacting in stablecoins could enable machines to negotiate and settle payments without human intervention. Blockchain-based provenance and verification tools are being developed to address AI’s trust deficit.
The consumer impact may be subtle. SVB predicts that next year’s breakout apps won’t brand themselves as crypto. They will look like fintech products, with stablecoin settlement, tokenized assets and AI agents operating quietly in the background.
Silicon Valley Bank’s overarching message is to treat crypto as infrastructure.
Pilot programs are scaling. Capital is concentrating. Banks are entering. Regulators are defining the perimeter. Blockchain technology is poised to underpin treasury operations, collateral flows, cross-border payments and parts of capital markets.
Volatility will remain, and headlines will continue to move prices. But the deeper narrative, the bank argues, is about the plumbing.
“In 2025, momentum in onchain representations of cash, treasuries and money market instruments carried real-world assets into the financial mainstream,” Vassallo said. “This year, cryptocurrency will be treated as infrastructure.”
Read more: R3 bets on Solana to bring institutional yield onchain
At ITC London 2026, Sondre Aarrestad, Managing Director for Onics‘ Norwegian business says the company builds end-user services for insurance providers with tools that help insurers stay connected with customers beyond the moment a claim happens. His main point is that insurers need to engage people more consistently if they want stronger loyalty and better results which, done well, that “stickiness” can also help reduce claims costs, which is a big challenge across the insurance industry.
Aarrestad describes Onics’ work with IF as a practical example: improving the customer experience by giving people better control over the assets they insure, and enabling faster interaction when something goes wrong. Onics highlights prevention and quick response as key themes — reducing damage by spotting issues early and acting sooner while also noting these challenges are broadly similar in the UK and the Nordics, but says the Nordics are generally more advanced, with a few insurers already pushing these services into the market.
Most of the focus is on water claims, which Aarrestad calls one of the most expensive claim types for insurers. Onics prioritises solutions that help detect and respond to water-related risks, with the aim of limiting damage and lowering overall claim costs and adds that the same approach can extend to other areas like fire and smoke, burglar alarms, as well as new sensor use cases. One example is humidity: while it’s not always an immediate danger, but high humidity over time can create major problems, such as in basements. Aarrestad says Onics wants to expand and use these kinds of data points more effectively within insurance companies.
From a customer point of view, Aarrestad says insurance still feels like “a piece of paper” that people check once a year, with contact only when a claim is made and sees that as a big gap and a big opportunity; Insurers can be more relevant day-to-day by helping customers take better care of what they’re insuring with the added upside of fewer and smaller claims. Onics believes customers will increasingly expect this, and that insurers across the ecosystem can’t stay reactive; And Onics expects this shift to accelerate over the next decade and in his view is that insurers need to rethink how they communicate and take responsibility for customer experience over time building habits and engagement every day, not just when damage happens.
Harvard Management Company switched up its crypto exposure in the fourth quarter of fiscal year 2025, establishing its first position in an Ethereum exchange-traded fund while cutting back its Bitcoin holdings, according to a regulatory filing released Friday.
The endowment’s investment manager purchased 3.87 million shares of BlackRock’s iShares Ethereum Trust, a stake valued at $86.8 million as of Dec. 31. The move marked Harvard’s first publicly disclosed investment tied to Ethereum.
At the same time, Harvard reduced its position in BlackRock’s iShares Bitcoin Trust. The firm held 5.35 million shares worth $265.8 million at quarter’s end, down from 6.81 million shares in the prior quarter. The reduction amounted to roughly 1.48 million shares, or about 21%.
Despite the trim, Bitcoin remained Harvard’s largest publicly disclosed equity holding, exceeding the endowment’s reported stakes in major technology firms such as Alphabet, Microsoft, and Amazon. Combined exposure to the two cryptocurrency funds totaled $352.6 million at the close of the quarter.
The portfolio shift took place during a turbulent period for digital assets. Bitcoin reached a peak near $126,000 in October 2025 before sliding to $88,429 by Dec. 31, according to Bitcoin Magazine Pro data.
Ethereum declined roughly 30% over the same span.
According to Harvard’s The Harvard Crimson, the university’s investment strategy has drawn criticism from academic observers. Andrew F. Siegel, emeritus professor of finance at the University of Washington, described the endowment’s Bitcoin investment as risky, pointing to a 22.8% decline year-to-date and arguing that Bitcoin’s risk stems in part from its lack of intrinsic value.
Beyond crypto, Harvard opened a new $141 million stake in Union Pacific Corporation, one of the largest freight rail operators in the United States.
The investment followed Union Pacific’s July 2025 announcement of a planned merger with Norfolk Southern, a deal expected to create the country’s first transcontinental railroad network.
The quarter also brought exits from prior holdings. Harvard sold its entire 1.1 million-share stake in Light & Wonder, a gambling products manufacturer that had been among its largest positions, and liquidated a smaller stake in Maze Therapeutics, a biotechnology firm focused on precision medicines.
Harvard increased exposure to several technology companies, more than tripling its stake in Broadcom and raising holdings in Google and Taiwan Semiconductor Manufacturing Company. The endowment reduced positions in Amazon, Microsoft, and Nvidia.
Ray Dalio warned that the post-World War II order has “officially broken down,” with the world now sliding into what he bluntly calls a “law of the jungle” phase, where power, not rules, decides outcomes, and crypto investors are using the moment to renew the case for assets designed to operate outside state control.
In his latest article on X describing both internal and external disorder, the Bridgewater Associates founder wrote that great powers are now locked in a persistent “prisoner’s dilemma.” They must either escalate or look weak across trade, technology, capital flows and, increasingly, military flashpoints, making what he calls “stupid wars” frighteningly easy to trigger.
That external disorder tends to collide with internal stress, Dalio said. When economies are under strain and wealth gaps are wide, governments reliably reach for higher taxes and “big increases in the supply of money” that devalue existing claims rather than pushing explicit defaults.
That combination is exactly the type of environment in which apolitical assets like Bitcoin (BTC) and gold have typically thrived. The pitch from crypto advocates is straightforward: As governments lean more heavily on sanctions, asset freezes and money creation, investors will look harder at assets that can be held and transferred without relying on a bank or a state-backed payments system.
Data from Econovis found that global broad money climbed to an estimated $142 trillion in 2025 from $26 trillion in 2000.
According to ex-fund manager Asymmetry, every major BTC rally has coincided with M2 expansion, and “the next wave is building.”
Gold prices have also generally tracked the US M2 money supply, reflecting the precious metal’s status as a traditional hedge against monetary expansion.
Related: ‘No privacy’ CBDCs will come, warns billionaire Ray Dalio
Dalio’s framework also emphasizes how states use asset freezes, capital market bans and embargoes as standard tactics, showing how dependent traditional savings and payments are on political discretion and jurisdictional risk, and placing the case for an apolitical, borderless money front and center.
Bitwise CEO Hunter Horsley captured the crypto community’s thoughts in a single comment, saying, “Is anyone working on global, permissionless, apolitical monetary assets and financial rails?? Could be important.”
Asymmetry made a similar point from the portfolio side, arguing that the setup Dalio is describing, a fracturing world order layered on top of what macro analysts such as Lyn Alden or Luke Gromen call fiscal dominance, where government borrowing needs effectively dictate central bank policy, is among the “most structurally bullish backdrop for hard assets in 80 years.”
Still, Dalio’s warning is not a direct forecast for Bitcoin, and the investment case for crypto remains sensitive to a wide range of factors, including interest rates, regulation, market liquidity and risk appetite. What his latest comments do provide is a clear macro narrative that many in the crypto market are using to argue that demand for “neutral money” could increase as the world becomes more fractured.
Magazine: Big questions: Would Bitcoin survive a 10-year power outage?
Nexo is set to return to the U.S. market, saying it has officially rolled-out a suite of digital asset offerings and trading infrastructure from the U.S.-based Bakkt.
The digital asset wealth platform withdrew from the U.S. in late 2022 after what it called a “dead end” in negotiations with state and federal regulators over its Earn Interest Product. The company said in 2022 it could no longer operate in an “impossible environment” following multiple enforcement actions, including from California and New York. However, in April 2025, it announced it would return, adding had $11 billion in assets under management.
The company’s U.S. product lineup includes fixed and flexible yield programs, an integrated crypto exchange, and crypto-backed credit lines. These services are offered through a compliant framework designed to support portfolio management and liquidity access for retail and institutional clients. Fiat on- and off-ramps are available via automated clearing house (ACH) and wire transfers.
The re-entry to the U.S. follows what the company called a “period of deliberate recalibration,” signaling a longer-term commitment to regulated markets. Nexo says the move also follows its “ongoing global expansion.” Nexo cited $371 billion in global transactions processed to date, in Monday’s statement.
The firm’s broader expansion includes the acquisition of Argentina’s Buenbit and sponsorships with the ATP Dallas Open and the Audi Revolut F1 Team.
Harvard University’s $56.9 billion endowment made its first foray into ether last quarter, even as it scaled back its exposure to bitcoin .
According to an SEC filing, the Harvard Management Company (HMC) bought almost 3.9 million shares of BlackRock’s iShares Ethereum Trust (ETHA), valued at around $86.8 million.
The company also reduced its stake in the iShares Bitcoin Trust (IBIT) by 21%, selling roughly 1.5 million shares. The bitcoin exchange-traded fund remains Harvard’s largest publicly disclosed holding at $265.8 million.
The shift comes after the price of bitcoin dropped from an all-time high of around $125,000 in October to close the quarter just below $90,000.
The move, however, may have less to do with sentiment and more to do with market dynamics, according to Andy Constan, founder and chief investment officer at Damped Spring Advisors.
The sale could reflect the unwinding of a trade that meant to capitalize on bitcoin treasury companies trading at premiums to the value of their BTC holdings, as measured by the multiple of net asset value, or mNAV, which compares enterprise value to bitcoin value.
When bitcoin’s price was booming, digital asset treasury (DAT) firms like Strategy (MSTR) traded at high premiums to the value of the bitcoin in their treasuries. MSTR, for example, at one point traded near 2.9 mNAV, meaning investors buying the shares were paying around $2.9 to own $1 of BTC.
That premium reflects not only the underlying cash-generating business, but also the company’s potential to keep accumulating bitcoin. Still, various investors bet on that mNAV gap narrowing. They held bitcoin indirectly through IBIT and shorted the shares of Strategy and similar digital asset treasury (DAT) companies.
Then the unwind took place, according to Constan. As the price of bitcoin plunged, so did that of DAT shares. Strategy, for example, now trades at 1.2 mNAV. These traders may also be rebalancing their portfolios, as bitcoin’s price nearly doubled last year despite the drawdown, suggesting it could be above the institution’s desired portfolio allocation, he wrote on X.
Data from 13F filings with the SEC gathered by Todd Schneider at 13.info backs these points. It shows that institutions reported owning 230 million IBIT shares in the fourth quarter, down from 417 million in the third.
Harvard also boosted investments in chipmakers Broadcom and TSMC, as well as in Google’s parent company Alphabet and railroad operator Union Pacific, while trimming stakes in Amazon, Microsoft and Nvidia.
Harvard Management Company reduced its bitcoin exchange-traded fund (ETF) holdings in Q4 while initiating an $86.8 million position in Blackrock’s Ishares Ether Trust, maintaining significant exposure to both leading cryptocurrencies. Ivy League Endowment Rebalances Into Ether ETF Harvard Management Company adjusted its crypto-linked portfolio in the fourth quarter, trimming its bitcoin exchange-traded fund (ETF) exposure […]
