A $7 billion crypto ETF plumbing boom just ran into the IRS
A $7 billion crypto ETF plumbing boom just ran into the IRSTreasury questions a crypto fund tax strategy, while Bitcoin’s rally leaves leveraged bulls exposed.
Crypto’s next ETF hurdle is in the tax code. Treasury and the IRS are questioning how some funds handle digital-asset gains, a dispute that could shape the next wave of crypto investment products. Also today: Bitcoin’s $87,000 rally is leaving leveraged bulls exposed, and El Salvador’s remittance push is turning to stablecoins. Top News
A $7 billion crypto ETF plumbing boom just ran into the IRSBlackRock’s Bitcoin and Ethereum funds distributed $7.22 billion of crypto through in-kind redemptions in the first half of 2026. That shows how quickly the machinery for moving crypto directly out of funds has scaled. Treasury’s concern is narrower: some regulated investment companies use those redemptions to keep digital-asset gains out of the 90% income test that preserves their tax treatment. IBIT and ETHA are grantor trusts, outside that test. The review remains open, but its outcome could complicate how future funds package crypto exposure. Bitcoin’s $87,000 rally just flipped from short squeeze to long riskBitcoin’s squeeze has changed sides. With spot demand weakening and the largest remaining liquidation clusters concentrated in long positions, a price drop could force leveraged buyers to sell and deepen the move. The data points to a vulnerability, rather than confirming a market top. El Salvador targets $9 billion in transfers, but chooses stablecoinsSivar is offering eligible US users $2 transfers to El Salvador, with debit-card funding, stablecoin settlement on Base, and cash-out at more than 1,000 locations. Over 25,000 people signed up before launch; the next test is whether that interest becomes regular use. From Our Sponsor
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Elsewhere in CryptoBitcoin drops to $82,000 on US data, and inflation fear is blamedThe September 29 report pairs softer job openings with rising rate anxiety; neither survey establishes Bitcoin’s price driver. Fed proposes two-business-day stablecoin redemptions; exchange withdrawals remain separateThe proposed issuer deadline has screening exceptions; the cited $76 billion measures July exchange balances, not blocked funds. Tether claims $550 million in Iran freezes, but $35 million slipped past SenateMinority staff allege delayed freezes; Tether’s 2026 totals address a different period and do not resolve those allegations. Hut 8 locks in $1B credit line, but faces 40% liquidity rulesThe unused secured facility provides development financing capacity; parent guarantees and liquidity covenants constrain subsequent borrowing. Anthropic lost $42 billion, warned AI could resist shutdowns, but traders still price it at $2 trillionFinancing-related accounting adjustments explain most reported losses; synthetic pre-IPO instruments confer no common-equity ownership. The Catalyst by CryptoSlateWhat’s moving crypto. Why it matters. What to watch next. CryptoSlate has covered crypto, markets, and decentralized technology since 2017. Read CryptoSlate · Tips, questions & corrections · Sponsor The Catalyst For information, not investment advice.
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