Bitcoin News Today: Institutions Double Down as Crypto Liquidity Crisis Deepens

Bitcoin and ether prices fell sharply this week as global liquidity conditions tightened, with market participants pointing to wounded market makers as a key culprit. The crypto downturn coincided with a significant shift in Japanese bond yields, which climbed past 1.7%-the highest level since 2008-prompting capital to flow back into the country and reducing liquidity for risk assets like cryptocurrencies. Meanwhile, institutional investors continued to navigate the volatile environment, with some taking aggressive positions. Ark Invest, for instance, added $39.6 million in exposure to crypto-related stocks, including Bullish (BLSH), Circle (CRCL), and Bitmine (BMNR), as their shares dropped amid the broader market selloff according to reports.

The move by Cathie Wood's firm underscored a broader trend of bargain hunting during periods of distress. Bullish, which owns CoinDesk, fell 3.63% on Wednesday, while CRCL and BMNR declined nearly 9%. Ark Invest's strategy aligns with its long-term bullish stance on crypto infrastructure, though the firm also aims to rebalance its ETFs within targeted parameters.

In a separate development, MEXC, one of the world's largest crypto exchanges, announced a partnership with Fibonacci Capital, a high-frequency trading firm specializing in liquidity engineering. The collaboration aims to deepen market depth and reduce slippage across spot and futures markets, with Fibonacci's proprietary InfoFi analytics platform providing real-time liquidity insights for listed projects. Alex Iugai, CEO of Fibonacci Capital, emphasized the partnership's focus on "building long-term value for founders" through institutional-grade liquidity strategies.

The liquidity crunch also impacted stablecoins. Tether, the largest stablecoin issuer, announced a $100 million investment in Parfin, a Latin American crypto infrastructure firm, to expand USDT adoption among institutions. The move follows Opera's recent integration of USDT with local payment systems in Argentina and Brazil, signaling growing mainstream acceptance of stablecoins in emerging markets .

Meanwhile, Abu Dhabi's investment arm tripled its holdings in IBIT, the first Bitcoin ETF, during Q3 as the asset neared a record high. However, IBIT experienced its largest single-day outflow since its January 2024 launch.

The market turbulence coincided with a surge in presales for new crypto projects. Mutuum Finance (MUTM), a decentralized lending platform, reported nearing $20 million in presale funding, with Phase 6 of its token offering reaching 90% allocation. At $0.035 per token, MUTM has risen 250% since its early 2025 launch, attracting over 18,000 holders.

As the crypto market digests these developments, analysts remain split on the outlook. While Japan's yield spike has tightened liquidity, some see the current correction as a precursor to renewed easing cycles, with Bitcoin historically reacting swiftly to macro shifts.