Summary This week’s developments show how the U.S. market's core infrastructure and traditional finance are moving deeper into digital assets. The CFTC opened the door for BTC, ETH, and USDC to serve as regulated collateral in derivatives markets. DTCC secured SEC approval to tokenize U.S. securities with full shareholder rights. Major financial institutions began introducing more specialized Bitcoin-linked products. The CFTC’s new pilot program allows select firms to use BTC ( BTC-USD ), ETH ( ETH-USD ), and USDC ( USDC-USD ) as regulated collateral in U.S. derivatives markets, a shift that is expected to create a new steady source of demand for BTC and ETH. The core financial infrastructure provider DTCC has received SEC approval to launch a tokenization service that will allow U.S. securities to be issued on approved blockchains with full legal rights and protections. Traditional finance firms are beginning to roll out more specialized Bitcoin-linked products, such as JPMorgan’s structured IBIT note and the proposed AfterDark ETF. CFTC Opens Door to Digital Asset Collateral in Derivatives Markets The U.S. Commodity Futures Trading Commission (CFTC) has launched a pilot program that, for the first time, allows bitcoin, ether, and certain stablecoins such as USDC to be posted as collateral in U.S. derivatives markets. The pilot is limited to futures commission merchants that meet specific eligibility standards. Participating firms may accept approved digital assets as margin for futures and swaps but must adhere to heightened operational requirements. For the first three months, weekly disclosures on digital asset holdings are mandatory, along with immediate notification to the CFTC if any custody or risk issues arise. In practice, this could mean a registered firm accepting bitcoin as collateral for a leveraged swap tied to commodities, while the CFTC monitors the operational risks and custody arrangements behind the scenes. Key Take In derivative markets, trading firms and institutions need to post collateral to back their positions in futures, swaps, or other derivative instruments. They normally maintain sizable reserves of assets that regulators deem safe and liquid enough to serve as collateral, typically U.S. Treasuries or cash-like instruments. Bitcoin can now be accepted as a margin for futures and swaps. This creates direct incentives for institutions, including hedge funds, market makers, and FCMs, to maintain meaningful BTC balances. They will need readily accessible Bitcoin reserves to maintain trading flexibility, like meeting margin calls and managing intraday exposure. As institutions begin using bitcoin as collateral, this could create a new source of steady demand, reduce available float in spot markets, and further entrench bitcoin’s position as a mainstream, regulated financial instrument rather than a purely trading asset. DTCC Receives SEC Approval to Tokenize U.S. Securities The Depository Trust & Clearing Corporation (DTCC), the core post-trade infrastructure behind U.S. securities markets, has received a No-Action Letter from the U.S. Securities and Exchange Commission. The No-Action Letter authorizes the company to launch a controlled production-level tokenization service beginning in the second half of 2026. The approval allows DTC, a subsidiary of DTCC, to create tokenized versions of assets it already custodies, including securities in the Russell 1000, major index-tracking ETFs, and U.S. Treasuries, on pre-approved blockchains over a three-year period. These digital representations will carry the same legal rights, investor protections, and ownership entitlements as their traditional counterparts, while operating within DTCC’s established standards for safety and resilience. This is the first time the SEC has permitted a systemically important market structure company to tokenize core U.S. securities in a live environment. DTCC positions the initiative as a foundation for improving collateral mobility, enabling around-the-clock access, and supporting programmable asset workflows. Key Take DTCC is the central post-trade infrastructure for U.S. securities markets, responsible for clearing, settlement, and custody for the majority of equities and bonds traded in the United States. It is one of the most systemically important financial institutions in global markets. Under today’s broker-mediated system, DTCC holds securities in centralized custody while shareholder rights, such as voting and corporate action participation, flow through brokers to investors; DTCC’s role ensures the integrity of ownership records and the proper transmission of these rights across the market infrastructure. Most tokenized stocks today offer only price exposure and do not grant shareholder rights, but DTCC’s new tokenization framework is designed to issue digital representations that carry the full entitlements, investor protections, and ownership rights of traditional securities. New Bitcoin-Linked Financial Products Emerge In recent weeks, several traditional finance firms have introduced new Bitcoin-linked products, signaling that interest is now moving beyond straightforward spot ETFs. JPMorgan has filed to issue a structured note tied to BlackRock’s iShares Bitcoin Trust ( IBIT ). The product outlines several predefined payout scenarios: investors receive a fixed return if the ETF reaches a target price by 2026, while a separate payoff structure offers upside participation through 2028 with partial downside protection. Separately, the Nicholas Bitcoin and Treasuries AfterDark ETF has been submitted for SEC review. The fund proposes a time-based allocation model: during daytime trading hours, it would hold U.S. Treasuries, shifting into Bitcoin exposure overnight. The structure aims to capture periods when Bitcoin historically shows higher volatility outside of U.S. market hours. These products show how traditional institutions are experimenting with different ways to package Bitcoin exposure, using structured payoffs and time-based allocation models to appeal to a wider range of investor preferences. Key Take For most investors, a straightforward spot ETF is sufficient to gain Bitcoin exposure. However, this does not meet the needs of many sophisticated market participants. The structured note market in the US has developed very rapidly in recent years, driven by investor demand for customized risk-reward profiles. These products can be designed to match specific market views, offering flexibility and risk mitigation strategies that align with sophisticated investment goals. The JPMorgan's IBIT-linked note is designed for investors who want exposure to Bitcoin’s upside but require guardrails around volatility and drawdowns. It delivers a structured, asymmetric payoff: modest guaranteed return in the near term, leveraged upside long term, and a defined drawdown risk in 2028. Bitcoin trades 24/7, but its performance is not uniform throughout the day; in this cycle, and one notable phenomenon is that most of the gains have occurred outside the U.S. market hours. The AfterDark ETF is designed for investors who want exposure specifically during the periods when Bitcoin has historically shown the most movement, rather than holding the asset around the clock. Weekly Market Chart: Hyperliquid Dominates Blockchain Fee Capture According to data from The Block, Hyperliquid now captures roughly 50% of all blockchain fees, a steep climb from about 10% at the beginning of the year. This growth has come largely at the expense of Ethereum and Solana. Together, those two networks now represent only about 20% of the total fee share, down from more than half at the start of 2025. As we mentioned in our recent article, Whale’s Digital Asset View: Top Two at a Crossroad , emerging top decentralized applications this cycle, including Hyperliquid for perps and Polymarket in prediction markets, are not built on Ethereum. While Ethereum is a more decentralized network, and that is more attractive for large capital store assets for safety reasons, its high TVL does not directly lead to more economic activity or fee generation, challenging the value accrual thesis for ETH as an asset. Source: The Block Disclaimer: The information provided herein does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and should not be treated as such. All content set out below is for informational purposes only. Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
