Crypto Currents: Legislation stalls as bitcoin rally fuels record ETF inflows

While bitcoin surges past $97,000 to trigger massive ETF inflows, the legislative landscape in Washington fractures as Coinbase withdraws support for key market structure bills. Meanwhile, traditional finance and crypto-native firms alike, from Bank of America to Galaxy Digital, are issuing strategic updates on stablecoins, tokenization, and infrastructure. Stay up on the crypto news that matters with “Crypto Currents,” daily from The Fly. Join us at 2 PM ET for your essential briefing on the fast-moving world of cryptocurrency on FlyCast radio.

SENATE DELAYS VOTE AFTER COINBASE WITHDRAWS SUPPORT AND ROBINHOOD DIGS IN: Legislative momentum has stalled after the Senate Banking Committee postponed its markup of the crypto market structure bill. In a public statement, Coinbase (COIN) CEO Brian Armstrong announced the company could not support the current draft, arguing it would enact a “de facto ban” on tokenized equities and restrict stablecoin rewards. Conversely, Robinhood (HOOD) CEO Vlad Tenev reaffirmed his commitment to the process, stating on X that the brokerage sees a path forward to help Congress pass the framework despite the delay.

BANK OF AMERICA CEO WARNS OF $6T DEPOSIT MIGRATION TO STABLECOINS: During a Wednesday earnings call, Bank of America (BAC) CEO Brian Moynihan issued a warning regarding the potential impact of interest-bearing stablecoins. Moynihan told analysts that up to $6T, roughly 30% to 35% of total U.S. commercial bank deposits, could migrate to these digital assets if permitted. He noted that such a shift would move funds outside the traditional banking system, resembling money market funds and potentially shrinking the capital base available for lending.

GALAXY DIGITAL AND LSEG DEBUT BLOCKCHAIN PLATFORMS AMID MRBEAST DEAL: Institutions are advancing infrastructure projects despite the regulatory gridlock. Galaxy Digital (GLXY) announced the closing of a $75M tokenized collateralized loan obligation on the Avalanche blockchain, the network powered by the avalanche token (AVAX-USD), to fund operations for Arch Lending .In a separate move highlighting the convergence of creators and crypto, Bitmine Immersion Technologies (BMNR) announced a $200M investment in Beast Industries, the company behind YouTube star MrBeast.

Meanwhile, the London Stock Exchange Group (LDNXF) launched a new platform to settle transactions using tokenized commercial bank deposits. Across the channel, Societe Generale (SCGLY) stated it is working with SWIFT to settle tokenized bonds using its compliant stablecoin.

ARK INVEST PORTFOLIO SHIFTS AS BLACKROCK SEES RECORD INFLOWS: In fund news, Ark Invest released its quarterly report revealing that Coinbase and Roblox (RBLX) were significant detractors in Q4. However, the fund highlighted strong contributions from other holdings including AMD (AMD), Alphabet (GOOGL), Shopify (SHOP), Roku (ROKU), and Tesla (TSLA). Ark also maintains exposure to Block (XYZ) and Circle Internet Group (CRCL).

Elsewhere, institutional demand for spot bitcoin products is accelerating. Data from SoSoValue reveals that BlackRock (BLK) saw its iShares Bitcoin Trust lead a daily surge of over $840M in total inflows as the price of bitcoin rallied on Wednesday.

PRICE ACTION: As of time of writing, bitcoin was trading at $96,260.01, while ether was trading at $3,312.38, according to price data from TipRanks.