Tag: Business – Decrypt

Nasdaq Inc., the parent company of the second-largest stock exchange by market capitalization, wants to roll out its own prediction market offering.

The company intends to offer options contracts for yes-or-no bets, which would be priced between 1 cent and $1, according to an SEC filing submitted early Monday morning.

Nasdaq’s so-called Outcome Related Options would let traders take binary positions on whether a specified event happens. Binary options are a simplified version of more traditional option contracts that payout depending on the outcome of a yes-or-no proposition.

If the requested rule change is approved, this will be Nasdaq’s first foray into the prediction market space—albeit under the regulation of the SEC rather than the Commodities Futures Trading Commission. The company’s would-be competitors, like Kalshi, Polymarket, and Crypto.com, are all regulated by the CFTC through Designated Contract Markets licenses.

Prediction markets are effectively a form of derivative contracts that allow traders to wager on the outcome of virtually anything—from stock and crypto prices to sports, cultural, and political events. The industry has exploded over the last year, generating billions in trading volume on a weekly basis.

There’s been ongoing discourse, though, about which federal regulator, the SEC or CFTC, has jurisdiction over prediction market platforms. In February, CFTC Chairman Michael Selig said “see you in court” in response to state attorneys general and gaming commissions who have argued that prediction markets encroach on their regulatory frameworks.

But there’s also been some mention of the SEC having a role in overseeing prediction markets. SEC Chair Paul Atkins has suggested that some prediction markets could fall under the agency’s jurisdiction.

“Prediction markets are exactly one thing where there’s overlapping jurisdiction potentially,” Atkins said at the time, in response to a question from Sen. Dave McCormick (R-PA). “That is a huge issue we’re focused on.”

Other Wall Street giants have already gotten on the field.

In October 2025, New York Stock Exchange owner Intercontinental Exchange invested up to $2 billion in Polymarket, bringing the company’s valuation to a whopping $9 billion. Although a press release said the investment would be worth “up to $2 billion,” a Polymarket spokesperson told Decrypt that it was accurate to call it a $2 billion investment.

Derivatives exchange CME Group has teamed up with FanDuel for a prediction market offering. And Cboe, its competitor derivatives exchange operator, has taken a strategy similar to Nasdaq. Last month, the company began talks with brokers to offer yes-or-no contracts, unnamed sources told The Wall Street Journal.

Altcoins including Near Protocol, Polkadot and Jupiter have posted double-digit gains over the past week, far outpacing Bitcoin as traders rotated into higher-beta assets following the leading crypto’s attempted recovery.

Near Protocol jumped 19.4% over the past seven days, while Polkadot gained 16.5% and Jupiter climbed 15.8%, according to CoinGecko data.

Bitcoin, by contrast, is roughly breakeven over the same period, hovering near $66,100 after recovering 4.7% from its February 28 low of $63,176—a drop triggered by escalating Middle East tensions following a U.S.-led attack on Iran.

The divergence tests whether altcoins can sustain momentum without Bitcoin leading the way. The move reflects technical positioning rather than a fundamental shift in market structure, experts told Decrypt.

The altcoin rally comes despite fearful sentiment lingering in the crypto ecosystem, with the Crypto Fear & Greed Index hovering around 10—territory signaling “extreme fear.”

“When the Fear & Greed Index hits extreme lows like 10 or 11, it typically signals that the forced selling phase of a deleveraging event has reached exhaustion,” Lacie Zhang, research analyst at Bitget Wallet, told Decrypt. “Over the past week, as Bitcoin found tentative support near the $63,000–$64,000 range, high-beta altcoins began to bounce simply because they were oversold on a technical basis.”

“This explosion isn’t a sign of returning confidence but rather a result of thin liquidity and the clearing of over-leveraged short positions,” Zhang added. “In an environment of extreme fear, even a small amount of bottom-fishing by brave dip-buyers can cause outsized percentage gains in alts.”

The altcoin rally is also a result of “heavily positioned” bearish bets, Rachel Lin, CEO of SynFutures, told Decrypt. “When sentiment is depressed, even modest stabilization in Bitcoin can trigger short covering and rotation into higher beta assets,” she said. “This move appears more technical and liquidity-driven than a reflection of improving fundamentals.”

Macro pressures

Lin pointed to Bitcoin’s dip below $66,000 amid escalating Middle East tensions as evidence that crypto remains macro-sensitive. “While selling pressure has eased and dip buyers are active, we have not yet seen consistent safe-haven flows,” she added.

The SynFutures CEO noted a divergence between retail sentiment and institutional capital allocation, citing “selective allocation into DeFi infrastructures” such as Morpho, which supports certain alt sectors more than the broader market.

Lin said that for altcoins to sustain momentum, broader macro uncertainty needs to ease alongside improving liquidity conditions with renewed capital inflows—factors that could suggest a potential risk-on scenario and transition the ongoing rally into a sustained uptrend.

Zhang cautioned that calling this the start of a sustained uptrend remains premature. “While Bitcoin showed resilience by rebounding to the $66,000 to $68,000 zone after the reports involving Iran, the market remains in a state of geopolitical paralysis,” she said. “We are currently seeing a relief rally fueled by short-covering and tactical rotation into beta assets that were hit hardest during the weekend drop.”

She outlined three pillars needed for a sustained recovery: institutional stabilization, macro clarity, and technical confirmation. “We need to see a return to consistent net inflows in the Spot Bitcoin ETFs,” Zhang said. “The macro overhang must ease, specifically regarding the Fed’s interest rate trajectory and the potential for an energy-driven inflation spike due to Middle East tensions.”

U.S. spot Bitcoin ETFs posted their first weekly inflow in six weeks, adding $787 million, according to SoSoValue data—further underscoring a long-standing risk-off behavior from crypto investors.

Though altcoins have popped over the past week, their long-term performance remains deep in the negative. Users on prediction market Myriad, owned by Decrypt‘s parent company Dastan, reflect this pessimism, assigning a 6.4% chance to the likelihood of an “alt season” before April 2026 .

Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt. Subscribe to the Morning Minute on Substack.

GM!

Today’s top news:

• Crypto majors dip then rebound amidst Iran War; BTC at $66k
• HYPE wins the weekend, rallying 20%+ to $30 while HIP-3 sees record OI
• Bitcoin ETFs saw $787M in net inflows last week
• US declares Anthropic as supply chain risk after negotiations on how the US could use Claud fell through
• Paradigm announced a new $1.5B fund focused on AI & Robotics

🪖 Bitcoin Crashes, Rebounds During Early Hours of Iran War

Bitcoin was the only large liquid asset that anyone could sell when the bombs started dropping. And it only dropped 3%.

📌 What Happened

Early Saturday, US and Israeli forces launched coordinated missile strikes on Iran targeting nuclear, missile, and naval infrastructure.

President Trump confirmed “major combat operations” and urged Iranians to overthrow the regime.

Iran retaliated with missiles targeting Israel, Qatar, the UAE, Bahrain, and US bases in Iraq. Israeli Defense Minister Israel Katz declared a nationwide state of emergency.

Iranian state media later confirmed that Supreme Leader Ayatollah Ali Khamenei was killed in the strikes, along with 40 senior officials.

Crypto markets absorbed it all in real time.

BTC dropped from roughly $65,500 to $63,000 within hours. The total crypto market cap fell by $128B with $449M in longs liquidated.

Then, as Iranian state media confirmed Khamenei’s death, BTC shot back to $68,196 in a major recovery rally.

As of this morning, it’s back to $66,300.

Meanwhile, Hyperliquid was the surprising crypto winner of the weekend. Its HIP-3 markets set a new record in open interest, and Hyperliquid was featured in Bloomberg as the primary marketplace for those looking to trade the war.

The HYPE token rallied from $26 to $32 through weekend trading.

🗣️ What They’re Saying

“Bitcoin is the only large liquid asset trading 24/7, so it absorbed all the selling pressure that would normally spread across equities, bonds, and commodities. The real price discovery happens Monday when US equity markets and Bitcoin ETFs reopen.” – Hayden Hughes, Tokenize Capital

“With a lot of the leverage already cleared out and exhausted sellers, there’s only so much impact macro events can have.” – Justin d’Anethan, Arctic Digital

“Where price discovery happens when TradExchanges sleep.” – Arthur Hayes, responding to Hyperliquid’s weekend volume surge

🧠 Why It Matters

Fear and Greed was sitting at 14. ETF flows had flipped to net sellers in February.

And then the biggest geopolitical shock in years hits on a Saturday.

BTC dropped less than 4%. That was the signal.

Heading into April 2024, when Iran first fired missiles at Israel, BTC dropped about 6%. Then over subsequent months it broke to new all-time highs. The June 2025 strike on Iranian nuclear sites pushed BTC below $100K briefly before it ripped.

The pattern is consistent: war shocks trigger sell-offs, then the macro digestion reverses them. The question this time is whether the 50%-off ATHs and bear market make it different.

Two things to monitor: the Strait of Hormuz and the ETF bid.

If Iran’s IRGC retaliates by threatening the strait, through which about 20% of global oil passes daily, you get an inflation shock that would keep the Fed on hold indefinitely and crush risk assets broadly, crypto included. Goldman Sachs is already predicting Oil will hit $100/barrel if this war goes on for 4 weeks as Trump said it might on Sunday.

On the other hand, if Khamenei’s death accelerates regime destabilization and traders read it as shortening the conflict, the relief bid continues.

Monday’s ETF flows will be the first signal.

The Hyperliquid story is the other one to watch longer term.

Its HIP-3 open interest (where TradFi assets can be trading around the clock) hit an all-time high above $1.1B. Hyperliquid infrastructure is becoming the 24/7 layer for all asset classes, not just tokens.

And it was the big winner of the weekend.

Now we wait for what’s in store this week…

🌎 Macro Crypto and Markets

• Crypto majors fell and then rebounded on the initial Iran strike and have levelled off; BTC even at $66.3k; ETH -2% at $1,950; SOL -1% at $84
• Morpho (+5%), NEAR (+5%) and JUP (+3%) led top movers
• Oil is up 8% premarket this morning with the Straight of Hormuz closure
• Gold (+3%) and Silver (+2%) are both rallying amist the war
• HYPE rallied 13% over the weekend to $31 as Hyperliquid HIP-3 open interest set an all-time high above $1.1B and was featured in a Bloomberg headline about weekend markets
• The Department of War labeled Anthropic a “supply chain risk” and directed federal agencies to stop using its AI tools after negoations to use Claude for the Iran war fell through
• Iran’s crypto mining network is being monitored, as the regime operated between 2-5% of global Bitcoin hashrate using subsidized electricity
• Trump Media is weighing spinning off Truth Social into a separate public entity called SpinCo, which would merge with Texas Ventures III
• South Korea’s National Tax Service accidentally published unredacted Ledger seed phrases in a press release
• Minnesota lawmakers are considering a full statewide ban on crypto ATMs via HF 3642, which would make it the first US state to do so.
• Ripple introduced new funding routes for XRP Ledger development, including a new FinTech Builder Programme and university partnerships

Corporate Treasuries & ETFs

Meme Coin Tracker

• Meme majors were mostly red; DOGE -2%, SHIB -3%, PEPE -2%, TRUMP -1%, PENGU -1%, SPX -4%, FARTCOIN -2%
• WAR (+150%), Jellybean (+50%), PysopAnime (+30%) and HODL (+50%) led notable movers

💰 Token, Airdrop & Protocol Tracker

• One Polymarket trader banked $385K betting on a US-Israel Iran strike date every day since February 8, losing repeatedly until Saturday morning
• Meanwhile, Kalshi caught heat for not resolving its Khamenei market, leading to several comments on the matter from founder Tarek Mansour
• Crypto VC Paradigm announced a new $1.5B fund foducsed on AI, robotics and other frontier tech
• Backpack exchange explained the legal engineering behind its token-to-equity program, stating that the conversion right won’t attach to the token itself, it’ll attach to a VIP program requiring one year of staking and active trading

🚚 What is happening in NFTs?

• NFT leaders were mostly flat over the weekend; Punks even at 29.9 ETH, Pudgy +1% at 4.5 ETH, BAYC -1% at 6 ETH; Hypurr’s -2% at 460 HYPE
• CyberKongz (+36%) led top movers

Bitcoin has so far absorbed the latest escalation in the Middle East, following a spike in volatility in U.S. futures on Sunday, as traders continue to parse the impact on global energy markets.

U.S.-led strikes on Iranian targets have prompted retaliatory missile and drone attacks, raising fears of a wider regional conflict after reports that Ayatollah Ali Khamenei’s 36-year rule as Iran’s supreme leader had ended. 

Iran has warned of further retaliation, while shipping and aviation disruptions across the Gulf have sharpened concerns that the conflict could extend beyond a limited exchange.

Bitcoin is down 0.4% on the day to $66,600 after reclaiming ground lost over the weekend, when its price fell to as low as $63,000. The asset is down roughly 2.8% on the week, according to CoinGecko data. 

The decline was relatively smaller than losses implied by equity-index futures, which were down more than 1% across the Nasdaq, Dow, and S&P 500. Losses in equity-index futures suggests investors are marking down risk broadly in response to overnight macro and geopolitical developments ahead of the U.S. open.

“Bitcoin’s initial sell-off was almost textbook; markets hate uncertainty more than bad news, and the moment the Iran conflict looked contained, the reflexive bid came back fast,” Ryan McMillin, chief investment officer at Merkle Tree Capital, told Decrypt.

The expert pointed to a Fear and Greed index reading of 11, alongside Bitcoin futures funding rates swinging to -6%, indicating shorts are paying a significant premium to maintain a bearish bias in a situation not seen since Bitcoin traded at $16,000 back in 2022.

“The market is mechanically paying you to be long; it’s time to get long, McMillin said.

Echoing that sentiment, Pratik Kala, head of research at Apollo Crypto, told Decrypt Bitcoin’s price action suggested much of the initial shock had already been reflected. 

“Bitcoin would’ve sold off by now if it had to—the tape through the event over the weekend was very positive. CME futures have also opened, and if Bitcoin were to dump or follow equities, it would have by now,” Kala said.

Broader markets have focused on the potential for disruption around the Strait of Hormuz, the narrow shipping lane that carries roughly one-fifth of global oil supply.

Oil prices have surged sharply on the Iran conflict, with Brent crude jumping roughly 8–10% toward $80 a barrel and U.S. WTI up about 7–8%. 

“If oil stays elevated, there will be a risk to a higher inflation print, which is negative for risk assets—and Bitcoin,” Kala said. “However, I don’t expect that to be the base case.”

Kala cited large oil supplies from OPEC countries that could seek to “plug the gap” and President Donald Trump doing “things in his power” to keep prices low, as “he knows that will turn the sentiment of Americans most.”

Safe-haven gold, meanwhile, has leapt more than 2% to $5,388 per troy ounce. 

“The ongoing Middle East conflict is set to further fuel gold’s tailwinds, likely triggering a knee-jerk price spike on rising safe haven demand.” Han Tan, chief market analyst at Bybit Learn, told Decrypt.

“Still, seasoned market watchers would be well aware that geopolitical risk premiums are often faded out swiftly, once market and economic risks are digested and appear to be contained,” he added.

As tensions escalated over Iran-related headlines this weekend, Hyperliquid’s HYPE token rose about 6% as traders turned to the always-on decentralized perpetuals platform to express risk while many traditional markets were closed.

Bitcoin and other risk assets fell as Iran-related tensions escalated, while oil and gold moved higher amid a broader risk-off shift. Volatility rose, and funding rates turned negative across crypto derivatives markets as traders adjusted positioning.

Hyperliquid is a decentralized exchange that lets traders buy and sell perpetual futures contracts directly on-chain without using a centralized intermediary.

Its native token, HYPE, fell to about $26.2 at the end of February, in line with the broader market pullback, before surging to roughly $32 as volatility picked up on Sunday.

The token is up about 25% year to date, though it remains well below its September peak near $58, per CoinGecko data.

Trading volume over the last 24 hours for the exchange reached a near one-month high on Saturday, rising to a peak of $200 million before dissipating as traders digested the risk premium to global energy markets.

Always-on trading

Hyperliquid was one of the few venues open and liquid as volatility picked up over the weekend, drawing trading activity at a time when equity futures and many centralized crypto platforms were either closed or operating with thinner books.

“As a decentralized perpetuals platform, it was one of the few venues actually open and liquid when the Iran headlines hit, and in a weekend event where centralized venues are closed off to face thin liquidity,” Ryan McMillin, chief investment officer at Merkle Tree Capital, told Decrypt.

Geopolitical shocks “make the case for non-custodial, always-on trading infrastructure,” McMillin added, noting how HYPE appears to sit “at an interesting intersection.”

Hyperliquid’s token “benefits both from volume-driven fee revenue during chaos events and from any broader rotation away from centralised exchange risk,” he said. “It’s worth watching whether weekend crisis volume is becoming a structural tailwind rather than a one-off.”

For HYPE, this ties geopolitical shocks directly to trading volume and fee activity, supporting the view that off-hours crises may become a repeat source of demand.

First response

Decentralized platforms like Hyperliquid’s are increasingly serving as “the first-response venue for geopolitical risk,” Dominick John, analyst at Kronos Research, told Decrypt.

“Institutions leverage these always-on markets to anticipate moves in conventional venues, using on-chain perpetuals to hedge before broader markets open,” John explained, adding that such a function positions decentralized venues “for early risk pricing.”

Weekend geopolitical shocks provide decentralized perpetuals exchanges “a structural edge” that captures “risk-driven flow while TradFi sleeps,” he added.

While platforms like Hyperliquid could serve that purpose, most other perpetual decentralized exchanges, including its own HIP-3 markets, would still need to “achieve much deeper order book liquidity to onboard institutional traders,” Siwon Huh, researcher at Four Pillars, told Decrypt.

On Hyperliquid, new markets require HYPE to be staked, and much of the platform’s fees go toward HYPE buybacks, meaning volatility and trading growth can directly increase demand for the token, which has also shown lower correlation to Bitcoin than many other altcoins, he explained.

“For now, they appear to have already established themselves as highly useful exchanges at the retail level,” Huh said, adding that the weekend geopolitical shocks are likely to “capture demand from liquidity providers requiring hedging at a much larger scale.”

A key Treasury Department bureau released preliminary rules this week detailing how it will implement the stablecoin-focused GENIUS Act—and industry experts are split about whether the proposal could impact America’s top stablecoin rewards program.

On Thursday, the Office of the Comptroller of the Currency, the nation’s top banking regulator, released a massive, 376-page proposed rulemaking detailing how it intends to implement the GENIUS Act, which was signed into law by President Donald Trump last summer.

Among the proposed rules—which are subject to a 60-day public comment period—are multiple sections prohibiting certain types of stablecoin rewards. The prohibitions appear to outlaw certain arrangements between stablecoin issuers and third parties in which the third parties pass yield onto stablecoin holders in connection with their “holding, use, or retention” of the tokens.

That sounds not so far from the current arrangement between USDC issuer Circle and Coinbase. Both companies share revenue from the yield generated on USDC’s reserves, and Coinbase currently offers users roughly 4% yield, essentially a type of interest payment, on their USDC deposits.

Multiple crypto policy leaders told Decrypt they think the OCC’s proposed language could impact Coinbase’s current USDC rewards program, but emphasized the complexity of the proposed rule and the possibility that it could be worked around.

One of the policy leaders said Coinbase was likely always going to need to adjust its USDC rewards program at least somewhat after the implementation of the GENIUS Act. Coinbase did not immediately respond to Decrypt’s request for comment on this story.

Last year, Coinbase reported $1.3 billion in stablecoin revenue. The company cited its USDC rewards program as its key growth driver in 2025.

Some crypto executives have denounced the OCC’s proposed rulemaking, deeming it regressive.

Scott Johnsson, a finance lawyer and crypto-focused venture capitalist, told Decrypt he thinks the language “most likely does” impact Coinbase’s USDC rewards program. But he also expects the rule will be challenged, and changed.

But others have taken a different tune. Circle’s head of global policy, notably, commended the OCC on its proposed regulations—a sentiment echoed by Circle’s CEO, Jeremy Allaire.

“This is all part of accelerating U.S. leadership in transforming the economic and financial system and rebuilding it natively on the internet,” Allaire said.

Perhaps underscoring the possibility that Coinbase and Circle needn’t worry too much about the proposed rules, a banking industry source told Decrypt that the OCC’s announcement does not give them much comfort. The banking lobby has been pushing for months to restrict stablecoin rewards, which it worries could siphon customers away from traditional, low-yield bank accounts. 

“It really doesn’t solve the problem,” the banking industry source said, alluding to potential loopholes in the OCC’s proposed restrictions. The source emphasized that rulemakings “can always be changed.”

The banking industry would rather have restrictions on stablecoin yield permanently enshrined in law, the source said. For over a month, banking and crypto representatives have gone back and forth negotiating the issue of stablecoin yield, as part of negotiations on crypto’s stalled market structure bill. The meetings, led by the White House, were intended to arrive at a deal by this weekend—but a deal is unlikely to materialize so soon, Decrypt reported earlier Friday.

“This doesn’t fix the debate,” Todd Phillips, a law professor at Georgia State focused on bank regulation, said of the OCC’s proposed rules. “This is not going to satisfy the two warring sides.”

The price of Bitcoin rapidly fell overnight as the United States and Israel began joint “major combat operations” in Iran, bombing numerous military targets in what officials said were attempts to end the country’s nuclear and ballistic missile programs, as well as take out key military leaders.

But while Bitcoin plunged from a price of $65,572 to $63,176 in about an hour overnight following word of the strikes, the leading cryptocurrency has mostly recovered that ground in the hours since.

It’s currently trading for $65,051, according to data from CoinGecko, still showing an approximately 0.8% loss on the day and 5.2% fall over the last seven days.

Major altcoins like Ethereum, XRP, and Solana also fell sharply following the overnight attacks, but have similarly made up most of that ground as of this writing, showing daily losses of less than 2% each.

Crypto liquidations surged overnight amid the rapid market plunge, with CoinGlass showing about $490 million worth of positions liquidated over the past 24 hours, led by Bitcoin and Ethereum longs. Overall, Bitcoin positions make up $196 million worth of the liquidations, with Ethereum following at $132 million.

At its overnight low, Bitcoin was approximately 50% down from its all-time high mark above $126,000 set last October. The leading cryptocurrency has fallen sharply over the last month, about 23% during that span. Bitcoin started the year at a price around $87,000.

Crypto prices have historically been impacted by geopolitical turmoil, and this time around is no different. For example, the price of Bitcoin and other assets fell sharply after Russia invaded Ukraine in 2022.

The overnight strikes led Iran to launch retaliatory attacks against U.S. military assets across the Middle East, while Iran reckons with the fallout from the bombings. News agencies have reported mass civilian casualties in Iran, including a reported 85 deaths after a girls school was struck in the Minah province.

Users on Myriad—a prediction market operated by Decrypt‘s parent company, Dastan—increasingly believe that the Iranian regime will collapse before October, currently penciling in a 51% chance of that happening. Those odds rose 20% over the last day.

Publicly traded banking institution Barclays (BCS) is reportedly gathering information for a potential push into blockchain, according to a Friday report from Bloomberg. 

Sources familiar with the matter said the firm has requested information from “technology suppliers” while it considers a path forward. Its utilization of blockchain may include tokenized deposits and stablecoins, the report said.

The U.K.-based banking institution appears to be warming to crypto, investing in stablecoin settlement startup Ubyx after being named as one of a number of leading international banks exploring the joint issuance of a stablecoin last fall. 

“Specialist technology will play a pivotal role in delivering connectivity and infrastructure to enable regulated financial institutions to interact seamlessly,” Barclays Head of Digital Assets Ryan Hayward said at the time of the Ubyx investment. 

Now the firm is further investigating those technologies and could ultimately decide on a provider by April, according to Bloomberg. 

If the firm ultimately decides to offer tokenized deposits or experiment with stablecoins, it would join a list of major banking institutions that have already entered the crypto space. 

Last year, JPMorgan launched its tokenized deposit token—JPMD—to the Coinbase-incubated Ethereum scaling network, Base, letting institutional clients make payments using a digital representation of their JPMorgan deposits. The firm expanded the token to the Canton Network earlier this year. 

That decision followed a report that JPMorgan was working on a framework to allow its clients to use Bitcoin and Ethereum as collateral for loans. Plus, publicly traded US Bank began testing its own stablecoin on the Stellar Network, while Citi and Bank of America have registered their own interest as well. 

Barclays’ potential involvement in the space has not made a splash with shareholders on Friday, as shares in the firm are trading down nearly 4% as the broader market slides. Nevertheless, shares have risen around 54% in the last year of trading.

President Donald Trump has directed all U.S. federal agencies to stop using artificial intelligence technology developed by Anthropic, escalating a dispute between the AI company and the Pentagon over how the military uses the technology.

In a Truth Social post on Friday, Trump said agencies must “immediately cease” using Anthropic products, with a six-month phase-out period for departments that already use the company’s technology.

“The United States of America will never allow a radical left, woke company to dictate how our great military fights and wins wars!” Trump wrote. “That decision belongs to your commander-in-chief and the tremendous leaders I appoint to run our military.

The directive follows Anthropic’s refusal on Thursday to remove safeguards preventing Claude from being used for “mass domestic surveillance” or “fully autonomous weapons,” after Pentagon officials demanded contractors allow their systems to be used for “any lawful use.”

“The left-wing nut jobs at Anthropic have made a disastrous mistake trying to strong-arm the Department of War and force them to obey their terms of service instead of our Constitution,” Trump wrote.

President Trump called the situation a threat to U.S. troops and national security.

“Their selfishness is putting American lives at risk, our troops in danger, and our national security in jeopardy,” Trump said.

Anthropic has resisted Pentagon demands to grant unrestricted military use of its models, while also recently walking back safety language in its Responsible Scaling Policy.

On Friday, CNBC reported that OpenAI CEO Sam Altman said he is working to “help de-escalate” the situation. De-escalating the tension could be a heavy lift, however.

In his post, Trump said decisions affecting U.S. military operations must remain under presidential authority rather than “some out-of-control, radical left AI company run by people who have no idea what the real world is all about,” he said.

“Anthropic better get their act together and be helpful during this phase-out period, or I will use the full power of the presidency to make them comply, with major civil and criminal consequences to follow,” Trump said.

Defense Secretary Pete Hegseth chimed in on the matter following Trump’s post, offering similar comments regarding the decision and calling Anthropic’s move a “a master class in arrogance and betrayal as well as a textbook case of how not to do business with the United States Government or the Pentagon.”

“I am directing the Department of War to designate Anthropic a Supply-Chain Risk to National Security,” Hegseth wrote on X. “Effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic. Anthropic will continue to provide the Department of War its services for a period of no more than six months to allow for a seamless transition to a better and more patriotic service.”

“America’s warfighters will never be held hostage by the ideological whims of Big Tech,” he added. “This decision is final.”

Following Trump’s announcement, the nonprofit Center for Democracy and Technology commented on the move in a statement sent to Decrypt.

“The President is wielding the full weight of the federal government to blacklist a company for taking a narrowly-tailored, principled stance to restrict some of the most extreme uses of AI you could imagine—fully autonomous weapons and the mass surveillance of Americans,” said CDT President and CEO Alexandra Givens.

“This action sets a dangerous precedent. It chills private companies’ ability to engage frankly with the government about appropriate uses of their technology, which is especially important in national security settings that so often have reduced public visibility,” she added. “Retaliating against a company for setting tailored, principled conditions on its product’s use undermines basic market freedoms and makes us all less safe.”

Editor’s note: This story was updated after publication to include comments from Hegseth and the CDT.

After peaking above $69,000 on Wednesday and suggesting a potential rebound for the leading cryptocurrency, Bitcoin dropped more than 3% on Friday to nearly $65,000 as stocks dipped and gold enjoyed a 1.4% bump.

The S&P 500 has fallen 0.7% and the Nasdaq has slipped 1.15% since the New York opening bell on Friday.

At the time of writing, Bitcoin was changing hands for $65,222 and has lost 3.5% compared to the same time last week, according to crypto price aggregator CoinGecko.

The world’s largest cryptocurrency by market capitalization has been trading for nearly half its all-time high price of $126,080 for the better part of the past week.

Bitcoin had a bumpy week, starting with a sell-off Monday. There was more turbulence mid-week as President Donald Trump’s 10% global tariff went into effect, but a brief window of relief as Nvidia’s earnings steadied tech stocks and crypto markets alike.

“After reaching the $70K psychological level, upside momentum faded,” analysts at Tokyo-based crypto exchange Bitbank wrote in a note shared with Decrypt. “Since Thursday, in the absence of fresh catalysts, BTC has traded in a narrow range in the mid-to-high $60K area.”

Other major cryptocurrencies have fallen in line with Bitcoin, with Ethereum dropping more than 5% on the day to $1,918, while XRP is down about 4% to $1.35 and Solana has dipped over 5% to $81.50.

The price of gold, however, has ticked up to $5,268 as investors seek safe haven assets. Meanwhile, crypto stocks have taken a beating, with some falling much harder than indices indicate.

CoreWeave (CRWV), a Bitcoin mining firm turned AI-native cloud computing provider, had dropped 21% to $76.92 at the time of writing.

On Friday morning, analysts at Macquarie dropped their price target for the firm. They explained in a note shared with Decrypt that the company missed on its earnings and needs substantial investment before it can bring additional compute resources online.

“Execution at this scale could be choppy,” they added, dropping their price target for the stock from $115 to $90.

Ethereum treasury giant BitMine Immersion Technologies has seen its shares drop 7.3% in the past day, falling to $18.95. The company holds 4.42 million ETH that’s worth approximately $8.2 billion at the time of writing. And its Ethereum treasury competitor, Sharplink, has seen its shares drop 6.7% to $6.73. SBET currently holds over 863,000 ETH, which is worth approximately $1.6 billion at current prices.

Meanwhile, Jack Dorsey’s payments processor, Block Inc., has seen its shares buck the crypto stock trend. Block, which trades under XYZ, has gained nearly 15% since the opening bell after the company announced that it has cut 40% of its staff in a pivot to rely more on AI.