Bitcoin News Today: Institutions Pivot to Tokenized Treasuries as Bitcoin's Liquidity Crisis Deepens

Bitcoin's recent struggles have reignited debates about its long-term viability as capital flows toward tokenized real assets and stablecoin-driven infrastructure. The cryptocurrency fell nearly 30% from its 2025 peak, lagging behind traditional assets like tech stocks and Treasury bills, while institutional investors increasingly pivot to tokenized treasuries and cross-chain liquidity solutions. A viral essay arguing that Bitcoin's era is ending has gained traction amid these shifts, highlighting growing skepticism about its role as a store of value and hedge according to market analysis.

The underperformance of Bitcoin has been exacerbated by thinning liquidity and heightened selling pressure from institutional investors, who now hold the asset via ETFs. Deutsche Bank analysts noted that this dynamic creates a self-reinforcing cycle of declining prices and reduced market depth. Meanwhile, stablecoins and tokenized real-world assets (RWAs) are gaining momentum as alternatives. For example, USDT0, a cross-chain liquidity network, surpassed $50 billion in total value moved within 10 months of its launch, enabling seamless transfers of Tether across 15 blockchain ecosystems. The platform's success underscores the demand for unified liquidity infrastructure, with CEO Paolo Ardoino of Tether calling it a "foundation for the next generation of borderless finance."

Institutional adoption of tokenized RWAs has also accelerated. Ondo Finance invested $25 million in Figure's yield-bearing stablecoin to bolster its tokenized U.S. Treasury fund. This move diversifies OUSG's reserves, which now include assets from BlackRock and Fidelity. Figure's CEO emphasized the strategic alignment between tokenized RWAs and blockchain's potential to "transform how money moves," while Ondo's president highlighted the partnership's role in institutionalizing on-chain finance.

Paxos further signaled the sector's growth by acquiring Fordefi, a multi-party computation wallet firm to enhance its stablecoin and tokenization infrastructure. The $100+ million deal integrates Fordefi's institutional-grade custody solutions with Paxos' regulated services, catering to enterprises like PayPal and Mastercard. This consolidation reflects broader industry trends, as DeFi protocols expand into institutional markets.

Despite these shifts, Bitcoin's ecosystem remains influential. Bitfarms reported a 122% surge in adjusted EBITDA in Q3 2025, though its pivot raises execution risks. The company still holds 1,827 BTC on its balance sheet, representing 10% of its market cap, tying its stock performance to Bitcoin's price movements. Similarly, Coinbase's recent inclusion in the S&P 500 and its acquisition of Vector-a Solana-based trading platform - highlight ongoing bets on crypto's integration into mainstream finance.

Regulatory clarity is another critical factor. The U.S. SEC's recent settlement with Ripple and its XRP lawsuit closure have spurred ETF launches, including Franklin Templeton's XRP ETF. These products offer regulated access to digital assets, potentially stabilizing demand. However, Deutsche Bank warns that Bitcoin's maturation hinges on broader adoption and stablecoin integration to bolster liquidity.

As the crypto market evolves, the interplay between Bitcoin's volatility and the rise of tokenized assets will define the next phase of digital finance. While Bitcoin remains a bellwether, its dominance faces growing challenges from infrastructure-focused innovations and institutional-grade tokenization.