Good Morning, Asia. Here’s what’s making news in the markets:

Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk’s Crypto Daybook Americas.

As bitcoin

trades near $119,500, having just recently broken through another all-time high of $120,000, digital asset investment products are also breaking records for inflows – but there’s a regional disparity.

According to CoinShares, U.S.-listed funds dominated with $3.74 billion in inflows, while Germany saw $85.7 million in outflows, underscoring a growing divergence in global institutional sentiment.

This robust institutional appetite in the U.S. is exemplified by Vanguard’s evolving stance on crypto investments. Despite once branding bitcoin as an “immature asset class,” the $10 trillion asset manager is now Michael Saylor’s MicroStrategy (MSTR)‘s largest shareholder, indirectly becoming the most significant Bitcoin holder in traditional finance, as Presto Research recently noted in a daily markets update.

Meanwhile, QCP Capital highlights in a recent note that institutional enthusiasm remains notably robust, exemplified by over $2 billion net inflows into spot BTC ETFs last week.

Yet, derivatives markets suggest a more nuanced approach. Leveraged long positions are expanding aggressively, with perpetual funding rates approaching an elevated 30% and open interest surpassing $43 billion, levels unseen since BTC reclaimed $100k in January. Such aggressive positioning raises caution flags, recalling February’s abrupt $2 billion liquidation event.

“Froth is building,” QCP warns.

BTC Continues to Outpace Luxury Watches

Bitcoin

is up 27.87% year-to-date and 13.22% in the past month, easily outperforming the luxury watch market’s modest +4.5% rebound in Q2, according to a recent report co-authored by Morgan Stanley and WatchCharts.

Gains were concentrated in flagship models, Daytona, Nautilus, Royal Oak, while brands like Panerai, Breitling, and IWC underperformed. Inventory for watches under $5,000 remains historically elevated, and dealer turnover in that range continues to lag.

“Price recovery remains narrow and concentrated,” the report notes, driven by “renewed interest from high-end collectors and improved global risk appetite.”

Both BTC and watches, it adds, tend to benefit from “expansionary monetary environments and periods of wealth creation.”

But the speculative capital isn’t flowing evenly. Bitcoin has attracted more of the macro-driven bid, with institutional inflows and 24/7 liquidity making it the preferred high-beta asset.

The pandemic-era correlation between BTC and watches, both beneficiaries of easy money and speculative excess, broke down in late 2023 with the approval of U.S. spot bitcoin ETFs.

BTC has since matured into a macro-sensitive, institutionally backed asset, while watches have returned to their roots: fashion.

Market Movements:

BTC: Bitcoin briefly approached $123,000 before cooling off, while crypto-related stocks held modest gains and analysts said the market remains far from euphoric, with one projecting BTC’s $2.5 trillion market cap could eventually converge with gold’s $22 trillion.

ETH: ETH surged past $3,079 in early trading on strong volume before retreating in the afternoon to settle near $3,011, forming a textbook breakout-pullback pattern with support holding above the key $3,000 level.

Gold: Gold slipped 0.1% after hitting a three-week high amid renewed tariff threats from President Trump and focus on trade talks and U.S. data, while silver surged to its highest level since September 2011.

Nikkei 225: Asia-Pacific markets opened mixed Tuesday, with investors brushing off President Trump’s tariff shifts and turning attention to upcoming Chinese economic data, while Japan’s Nikkei 225 remained flat.

S&P 500:RBC Capital Markets raised its 2025 S&P 500 target to 6,250 from 5,730, but unlike Goldman and BofA, it expects little upside from current levels, with the index already above 6,280 as of July 11.

Elsewhere in Crypto

• U.S. Banking Regulators Issue Crypto ‘Safekeeping’ Statement, Not Pushing New Policy (CoinDesk)
• China’s Stablecoin Studies Hint at ‘Tiered’ But Fractured Approach (Decrypt)
• Grayscale Files Confidential Submission for IPO With SEC (CoinDesk)

The CEO of Tether Holdings, Paolo Ardoino, is highlighting that the USDT stablecoin is largely backed by an asset widely regarded as safe and highly liquid.

In a new CNBC interview, Ardoino says if Tether were a country, the USDT issuer would rank among the top 20 largest foreign holders of US Treasuries.

“We have $152 billion now in issued tokens. And we have $172 billion in total reserves. We have more than $125 billion in US Treasuries, and the rest is very, very high liquid assets.

We own more Treasuries than Germany. Well, Tether is not a nation, but if we were a nation, we would be the 18th-largest nation holding US Treasuries.

We have more Treasuries than Germany, UAE [United Arab Emirates], Spain, Australia and we are growing. Our approach is to keep growing our US Treasuries base.”

As of March, Germany and the UAE held $111.4 billion and $104.4 billion in US Treasuries, respectively, according to US Treasury data. The countries that hold more US Treasuries than Tether as of March are Japan, China, the United Kingdom, Cayman Islands, Canada, Luxembourg, Belgium, France, Ireland, Switzerland, Taiwan, Hong Kong, Singapore, India, Brazil, Norway, Saudi Arabia and South Korea.

Last week, the U.S. Treasury Secretary Scott Bessent said stablecoins could serve as a major source of demand for the government debt.

“I’ve seen estimates that just over the short term, stablecoins could create $2 trillion of demand for US Treasuries and Treasury bills. Put that in context, the number is probably about $300 billion right now…”

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A decentralized platform, Lukso offers an alternative to creators depending on centralized platforms such as Google, Meta, and Spotify.

The company recently appointed Cell as new CEO and is committed to shifting the power dynamics of current centralized systems through the LUKSO Standard Proposal (LSP) smart contract system, which gives Creaters complete control over their identity and content.

The platform promotes the universal identity of creators and AI that are resistant to censorship, completely chained, easily exposed, and allows creator content to be accessible and interactive to everyone, including apps and protocols.

Big movements with luxo.
Former CEO of Coinbase Germany, @JanosellI just participated @universal_every As a COO that will help make Web3 mainstream.
With universal profiles, creator-owned content and AI-driven identity, Lukso is more than just a blockchain. pic.twitter.com/2l68ihvczc

– ninjafromqueens.base.eth (@ninjafromqueens) May 15, 2025

Shadow, which prohibits profiles and content that are prevalent in centralized systems, is part of a space where content is not permitted to share, as published thanks to the platform’s LSP smart contracts.

As a result, creators can experiment with content without fear of exhaustion.

Explore: 10+ crypto tokens that can hit 1000X in 2025

Lukso Universal Profile – Progress for AI Transparency and Web3 Adoption

Web3 platforms (transparency, ownership, user agents, etc.) have many advantages, but so far they have been rarely popular in the creator community due to usability factors such as unfamiliar tools, confused interfaces, and security concerns.

Cell said, “It’s not the tools or Dapps that carry Web3 on your back, but the lack of foundations, pure private key account systems, and a proper standardized smart contract-based account system.”

According to the sale, Lukso’s Universal Profile addresses these issues by integrating the identity of a smart, recoverable, user-friendly blockchain into the blockchain through LSP smart contracts.

Furthermore, as AI continues to evolve, universal profiles become increasingly important. With growing concerns about authors, attribution and accountability, AI agents can establish a verifiable on-chain presence through Lukso’s universal profile, ensuring transparency and trust.

Additionally, universal profiles are modular and programmable, allowing developers and creators to manage AI profiles through Lukso’s LSP6 Key Manager Standard, enabling secure, collaborative governance for AI agents.

Like human creators, AI agents can develop their own reputation, gain follow-up, and evolve socially, due to their universal profile.

Explore: 20+ next ciphers that will explode in 2025

A distributed system can match intensive convenience with appropriate criteria

“Distributed systems often face hurdles of scalability, speed and user experience,” explains the sales, relying on centralized systems.

However, by having the right standards and leveraging universal profiles, Web3 offers smart, recoverable, scalable accounts, providing a better user experience when compared to Web2.

A key advantage of Web3 is its complexity. Unlike the siloed approach of the Web 2 platform, Lukso’s ecosystem allows users to embed protocols directly into profiles.

Therefore, mini apps can serve multiple purposes. For example, an artist’s profile could be a ticket store or a project’s profile could be a launch pad. This level of modularity does not exist in Web2, so the possibilities are endless.

With the right standards, a decentralized Web3 platform can outweigh the intensive convenience by increasing flexibility, ownership and creative potential.

Explore:12+ Hottest Encryption Presale to Buy Now

The post, the former Coinbase German CEO joins Lukso, aims to break Big Tech’s grip against Creator Autonomy, which first appeared in 99bitcoins.

BaFin, Germany’s financial regulator, banned all public sales of Ethena GmbH’s USDe token this week, citing flaws in the approval process and violations of the European Union’s Markets in Crypto-Assets Regulation (MiCAR).

The regulator outlined several immediate actions against Ethena GmbH to enforce the ban.

According to BaFin, the synthetic dollar token had been offered as an unregistered security in Germany, prompting the authority to restrict its operations without delay.

BaFin Orders Asset Freeze and Website Shutdown for USDe Token

In its announcement, BaFin instructed Ethena GmbH to freeze the reserve assets backing the USDe token and halt all new customer registrations.

The company must also shut down its website, and a special representative has been appointed to oversee compliance with these directives.

“The BaFin also has reasonable grounds to suspect that Ethena GmbH in Germany sells securities in the form of sUSDe tokens from Ethena OpCo. Ltd. without the required prospectus,” the regulator said.

“The USDe and sUSDe tokens are interconnected in such a way that investors can receive a sUSDe token in exchange for a USDe token,” it added.

Despite the prohibition on primary sales and issuance, secondary market trading of USDe remains unaffected by the ban.

BaFin identified “serious deficiencies” in Ethena GmbH’s approval process, including noncompliance with MiCAR’s capital and asset reserve requirements.

Ethena GmbH had been operating under a transitional provision that allows issuers of asset-referenced tokens to continue business while awaiting regulatory approval.

The company applied for authorization on July 29, 2024, a day before the deadline, and has been issuing USDe in Germany since June 28, 2024.

Currently, approximately 5.4 billion USDe tokens are in circulation, with a substantial portion issued outside Germany before MiCAR took effect.

To safeguard customer interests, BaFin has ordered the company’s asset reserves to block and restrict the authority of its managing directors over those funds.

Holders of USDe tokens cannot redeem them directly with Ethena GmbH, though trading on secondary markets continues as normal.

BaFin’s statement also raised concerns about the company issuing sUSDe tokens, suggesting they could constitute unregistered securities.

The tokens are linked to USDe, allowing investors to exchange them while receiving additional returns.

The regulator is now considering further enforcement actions, which could include a complete ban on the public offering of these securities.

BaFin is overseeing the authorization process in collaboration with the European Central Bank (ECB), the European Banking Authority (EBA), and the European Securities and Markets Authority (ESMA).

Further details will be provided upon completion of the licensing process.

Ethena Defends USDe Token Amid BaFin Ban

Following BaFin’s ban on USDe in Germany, Ethena Labs reassured users that redemptions remain unaffected through its British Virgin Islands-based entity, Ethena BVI Limited.

The company, addressing the situation on X, stated that while its German subsidiary’s MiCAR application was denied, USDe remains fully backed.

“We are disappointed by this decision but will continue evaluating alternative regulatory frameworks,” Ethena wrote.

The firm also dismissed claims that its assets were frozen, clarifying that all funds remain accessible.

It plans to update its terms in the coming week to reflect the regulatory developments.

Ethena’s regulatory challenges come as institutional interest grows.

Recent investments include a $20 million backing from MEXC and a 500,000 ENA token purchase by World Liberty Financial.

BaFin Tightens Oversight on Synthetic Assets Across Europe

BaFin’s decision reflects the regulator’s cautious approach towards crypto assets operating within Germany’s jurisdiction.

Its ban on Ethena’s USDe token highlights the tightening regulatory grip on stablecoins and synthetic dollar tokens in Germany and across Europe.

With MiCAR enforcement ramping up, stablecoin and synthetic asset issuers will face increased scrutiny over compliance with capital, reserve, and disclosure requirements.

The outcome of BaFin’s assessment of Ethena GmbH could set a precedent for how synthetic dollar tokens are regulated under MiCAR across the EU.

Frequently Asked Questions (FAQs)

The post BaFin Bans Ethena’s USDe Token in Germany Over Approval Process Flaws appeared first on Cryptonews.