The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

Happy Tuesday! Bitcoin (BTC) is stuck near $70,000 as analysts warn geopolitical tensions and shifting Fed expectations are clouding direction, with a thin liquidity "air gap" above $72,000 that could amplify the next move.

In today's newsletter, Balancer protocol's corporate entity is shutting down after a $128 million exploit, Bernstein says bitcoin looks bottomed and reiterates its $150,000 price target, the NYSE taps Securitize for its 24/7 tokenized securities platform, and more.

Meanwhile, the CFTC formed an innovation task force to help shape rules for crypto, artificial intelligence, and prediction markets.

P.S. Don't forget to check out The Funding, a biweekly rundown of crypto VC trends. It's a great read — and just like The Daily, it's free to subscribe!

Balancer Labs to shut down after $128 million exploit; protocol eyes 'lean' restructuring

Balancer Labs, the corporate entity behind the DeFi protocol Balancer, is winding down after a $128 million exploit created "real and ongoing legal exposure" for the firm.

• In a forum post on Monday, co-founder Fernando Martinelli said the technology remains intact, but flawed tokenomics and repeated security incidents eroded trust.
• Martinelli had considered a complete protocol shutdown, but pointed to recent performance metrics, noting that Balancer has generated more than $1 million in annualized fees.
• Instead, the protocol will continue operating under a leaner structure, shifting toward DAO-led governance and a service provider model.
• The restructuring plan proposes ending BAL (BAL) emissions, sunsetting veBAL, and redirecting 100% of fees to the DAO treasury.
  Core contributors are expected to move to a new entity, Balancer OpCo, pending governance approval.
• Leadership said the next 12 months will be critical as Balancer attempts to prove sustainable product-market fit and rebuild confidence.
• The decision follows a November attack that affected Balancer v2 pools across multiple chains, which was attributed to a rounding flaw in its swap logic.

Bernstein says bitcoin looks bottomed, sees 226% upside for Strategy

Bernstein analysts said bitcoin has likely bottomed, underpinning its bullish thesis for treasury firm Strategy as a leveraged play on the upside.

• The analysts projected a potential 226% rise for Strategy with a $450 price target, citing its resilient balance sheet and 3.6% share of bitcoin supply.
• Bernstein argued that Strategy's increasing shift to perpetual preferred instruments like STRC reduces volatility risk and provides non-dilutive, long-term capital for continued bitcoin accumulation.
• The analysts also reiterated a $150,000 bitcoin price target for the end of 2026 and see a cycle peak of $200,000 in 2027.

NYSE taps Securitize to develop 24/7 tokenized securities platform

The New York Stock Exchange partnered with Securitize to develop a blockchain-based platform for issuing and trading tokenized stocks and ETFs.

• The initiative advances NYSE's January plan to launch a 24/7 tokenized securities venue, formalizing a key piece of its infrastructure.
• Securitize will handle the creation and management of tokenized shares, leveraging its experience working with institutions like BlackRock.
• The collaboration reflects a broader Wall Street push into tokenization, as exchanges and regulators increasingly move to support digital securities experimentation.

Tether hires Big Four auditor for first full reserves audit

Stablecoin issuer Tether has hired a Big Four accounting firm to conduct its first full independent audit of USDT reserves, marking a shift beyond quarterly attestations.

• Executives said the audit will provide a comprehensive review of Tether's financials, including assets, liabilities, and internal controls.
• The company did not disclose the auditor's name in its Tuesday announcement, though candidates include Deloitte, PwC, EY, and KPMG.
• Deloitte has previously issued a reserve attestation for Tether-linked USAT — a U.S.-regulated stablecoin issued via Anchorage Digital — though that review was limited to a point-in-time snapshot and did not extend to USDT or Tether's broader finances.
• The move comes as Tether scales globally and seeks to address long-standing scrutiny over its reserve transparency.
• Meanwhile, shares in rival Circle fell 20% on Tuesday amid proposed limits on stablecoin rewards and reports that the firm froze USDC in 16 wallets tied to an ongoing U.S. civil case.

BlackRock CEO Larry Fink sees tokenization making investing with your phone as easy as payments

In his annual shareholder letter, BlackRock CEO Larry Fink said tokenization could make investing as seamless as mobile payments by leveraging widespread digital wallet adoption.

• Fink emphasized that tokenization can improve access, liquidity, and efficiency by making assets easier to issue, trade, and fractionalize.
• His comments come as regulators and major institutions accelerate efforts to test and integrate tokenized securities into traditional markets.

In the next 24 hours

• UK CPI and PPI data are due at 3 a.m. ET on Wednesday. U.S. mortgage data follows at 7 a.m.
• AltLayer and Acala are among the crypto projects set for token unlocks.
• Next Block Expo and Digital Asset Summit continue. Crypto Assets Conference 2026 kicks off in Frankfurt.

Never miss a beat with The Block's daily digest of the most influential events happening across the digital asset ecosystem.