Banks Struggle with Restrictive Capital Rules as Bitcoin Demand Surges

Banks are facing significant challenges in meeting the growing institutional demand for Bitcoin due to stringent capital requirements imposed by the Basel Committee. These rules make it economically unviable for banks to hold Bitcoin on their balance sheets, despite increasing interest in digital assets. According to a report by The Banker, financial institutions are eager to enter the cryptocurrency market but are being pushed to the sidelines by these restrictive regulations. Arnab Sen, CEO of GFO-X, a UK-based firm, highlights the tension between regulatory frameworks and market demand, underscoring the need for a more balanced approach to capital rules to accommodate the rising popularity of Bitcoin and other digital assets. As of June 2025, this regulatory hurdle continues to stifle banks' ability to participate fully in the burgeoning crypto market, potentially limiting institutional access to Bitcoin and slowing its mainstream adoption.

Banks Stifled by ‘Punitive’ Capital Rules Amid Rising Bitcoin Demand

Banks are struggling to meet growing institutional demand for Bitcoin due to restrictive capital requirements that make holding the cryptocurrency on balance sheets economically unviable.

Despite rising interest in digital assets, current Basel Committee rules are pushing banks to the sidelines of a market they say they are eager to enter, according to a report by The Banker.

Arnab Sen, CEO of GFO-X, a UK-based digital asset derivatives exchange, warned that regulatory constraints are preventing traditional financial institutions from participating in crypto markets.

Speaking at the Financial Times’ Digital Assets Summit in London, Sen said, “The market is crying out for banks to intermediate Bitcoin trading and collateral services, but the existing rules make it almost impossible.”

Bitcoin Surges To $97K, Gold Hits $3,300, What’s Fueling This Rally?

Bitcoin and Gold are experiencing a significant rally, driven by macroeconomic shifts and changing investor sentiment. Bitcoin, after struggling to maintain its position above $100,000, has surged past $90,000, reaching a high of $97,625.81. The cryptocurrency's 24-hour gain stands at 2.28%, trading at $96,552.21 at press time.

Gold's parallel ascent to $3,300 underscores a broader trend of safe-haven asset appreciation. Market watchers attribute the momentum to institutional inflows and hedging against inflationary pressures. The rally reflects a recalibration of risk appetite in global markets.

Bitwise CIO Warns of 'Risky Crypto Summer' Amid U.S. Legislative Uncertainty

Bitwise Chief Investment Officer Matt Hougan has issued a stark warning about mounting risks for the cryptocurrency market this summer if U.S. Congress fails to pass crucial stablecoin and market structure legislation. The potential regulatory vacuum could hit altcoins particularly hard, creating what Hougan describes as 'a long summer for non-Bitcoin crypto assets.'

The warning comes as political support wavers for key bills like the GENIUS Act, with Democrats recently withdrawing backing from the Senate's stablecoin proposal. Galaxy's Alex Thorn echoed these concerns, though Galaxy Digital CEO Mike Novogratz maintained Optimism about legislative progress. Market participants now face heightened uncertainty as the regulatory landscape hangs in the balance.

One Crypto Bill Could Make or Break the Market This Summer—Bitwise CIO Explains Why

The crypto market faces potential turbulence this summer as US lawmakers stall on regulatory progress. Bitwise CIO Matt Hougan warns that political gridlock could reverse recent gains, despite the White House's favorable stance. "People often ask me what could derail crypto. My answer is simple: people. More specifically, politicians," Hougan wrote in a blog post.

While long-term bullishness remains intact—with bitcoin and other tokens projected to reach new highs—the short-term risk of legislative inaction looms large. The market's trajectory now hinges on Washington's ability to advance clear crypto frameworks during this critical window.

Bitcoin Institutional Investors Trim Exposure Ahead of FOMC as BTC ETFs See Outflows

Institutional investors are scaling back Bitcoin exposure amid uncertainty around the Federal Reserve's policy decision. Spot BTC ETFs recorded $85.64 million in net outflows on Tuesday, interrupting three consecutive days of $1 billion inflows. The retreat reflects defensive positioning ahead of potential market volatility from the FOMC announcement.

Market participants appear to be locking in gains after recent inflows, prioritizing risk management over short-term speculative positions. The outflow pattern suggests institutions are treating Bitcoin as a risk asset rather than an uncorrelated hedge during macroeconomic events.

Top Bitcoin & Crypto Casinos with No KYC Dominate $80B Gambling Market in 2025

The cryptocurrency gambling industry has surged to an $80 billion valuation, driven by the rise of no-KYC Bitcoin casinos. Cloudbet leads the pack with a $2,500 welcome package and support for 40+ digital assets, catering to players seeking anonymity and provably fair games.

Platforms avoiding Know-Your-Customer requirements are gaining market share as regulatory scrutiny intensifies elsewhere. The sector's growth mirrors broader crypto adoption trends, though it remains controversial among traditional finance observers.