Bitcoin Reclaims $71,000 as Kraken Becomes First Crypto Bank with Federal Reserve Access
Bitcoin(BTC-USD)reclaimed the $71,000 level Wednesday morning after days of selling pressure tied to the U.S.-Israeli strikes on Iran. Crypto-linked equities were surging in pre-market trading, with Strategy(MSTR)up 6.7%, Coinbase(COIN)up 5.6%, and Circle(CRCL)up 2.9%. Meanwhile,on-chain data showed the strongest weekly inflow into spot bitcoin ETFs since mid-January, 20,816 BTC over seven days, a sharp reversal from five consecutive weeks of outflows that defined February, perLookonchain.Underpinning the rally: a landmark Federal Reserve decision on Kraken, a presidential broadside against the banking lobby, and a continued stampede by former miners into AI infrastructure, all reshaping the investable crypto landscape in real time. Stay up on the crypto news that matters with Crypto Currents, daily from The Fly. Join us at 2 PM ET for your essential briefing on the fast-moving world of cryptocurrency on FlyCast radio.KRAKEN BECOMES FIRST CRYPTO BANK WITH FEDERAL RESERVE ACCESS:Kraken Financial, the Wyoming-chartered banking arm of crypto exchange Kraken, has been granted a Federal Reserve master account by the Kansas City Fed, the first digital-asset bank in U.S. history to gain direct access to the Fed's payment infrastructure, as reported byThe Wall Street Journal.The account gives Kraken direct connectivity to Fedwire, eliminating the need for intermediary correspondent banks when settling fiat transactions for institutional clients Kraken Financial operates on a full-reserve model, and the account carries an initial one-year approval with a phased services rollout, perReuters.Bloombergnoted that the account allows Kraken to "move money on rails reserved for licensed banks, a privilege that lenders have long monopolized" Kraken's parent Payward is not yet publicly listed but has filed a confidential draft IPO registration with the SEC following an $800M funding round at a $20B valuation, according to aFor equity investors, the move is the clearest signal yet that crypto firms are being woven into core U.S. financial plumbing, the same payment rails used by thousands of banks and credit unions, and any Kraken IPO would immediately become one of the largest crypto-native listings available to public-market investors.TRUMP ATTACKS BANKS, PUSHES CLARITY ACT AS STABLECOIN YIELD FIGHT INTENSIFIES:President Trump attacked the banking industry late Tuesday for obstructing crypto legislation, posting on Truth Social that banks should not "derail our robust Crypto Agenda" and urging Congress to pass the CLARITY Act "ASAP," withThe Wall Street Journal reportingthat the comments are escalating pressure on a stalled Senate bill The CLARITY Act, a market structure bill that passed the House last summer, has stalled over a dispute about whether crypto companies can offer yield on stablecoin holdings, banks argue this constitutes paying interest, a regulated banking activity, while crypto firms contend rewards are essential for stablecoins to compete. Journalist Eleanor Terrettreportedthat a Coinbase delegation including CEO Brian Armstrong visited the White House, signaling continued high-level engagement between the crypto industry and the administration The visit comes amid a public clash: JPMorgan (JPM) CEO Jamie Dimon this week toldCNBCthat crypto firms wanting to pay stablecoin rewards "should become banks," perDL NewsThe outcome directly affects COIN, CRCL, and every listed entity seeking to offer yield-bearing stablecoin products, stablecoins already account for roughly $1.35B in annual Coinbase revenue.IRAN CONFLICT RATTLES MARKETS AS CIRCLE GETS A RATE-DRIVEN BOOST:Bitcoin's rebound above $71,000 represented a surge of more than 5% from Tuesday afternoon levels as the Middle East conflict entered its fifth day,Bloomberg reportedBloombergalso reported that Iran's $7.8B cryptocurrency market is drawing fresh scrutiny, with Elliptic data showing outflows from Nobitex, Iran's largest exchange, surged 700% within minutes of the first airstrikes, and total outflows from Iranian exchanges reached roughly $10.3M between February 28 and March 2. Circle's premarket gain came after the stock surged over 20% this weekBarron'snoted that Mizuho raised its price target from $90 to $100, citing rising oil prices and fading Fed rate-cut expectations. Because Circle earns the bulk of its revenue from interest on U.S. government debt reserves backing USDC, a higher-for-longer rate environment is directly accretive, the stock had already rallied 62% over the prior week after a Q4 revenue beat of $770M, up 77% year-over-year.MINERS ACCELERATE AI PIVOT AS APPLIED DIGITAL PRICES $2.15B BOND AND CORE SCIENTIFIC DUMPS ALL BTC:Applied Digital(APLD)filed anSEC 8-Kannouncing the pricing of a $2.15B offering of 6.750% senior secured notes due 2031, with proceeds funding a 200-megawatt AI data center, Polaris Forge 2, in North Dakota leased to Oracle(ORCL)The facility is expected to generate roughly $5B in revenue over a 15-year contract period, asBloomberg reportedIn a related filing, Babcock & Wilcox(BW)disclosed viaSEC 8-Kthat it received full notice to proceed on a $2.4B power generation project to supply 1.2 gigawatts of electricity to Applied Digital's AI Factory campuses. Core Scientific(CORZ)expects to sell all remaining BTC by the end of Q1 2026, with funds earmarked for liquidity and its AI strategy, the company already sold 1,924 BTC from December through February for roughly $176M,Yahoo Finance reportsRiot Platforms(RIOT)reported record annual 2025 revenue, nearly doubling year-over-year, but Wall Street cut price targets, Cantor Fitzgerald lowered to $29 from $31 and Needham went from $30 to $24, citing rising mining costs.Riot's average cost per bitcoin mined jumped from $32,216 in 2024 to $49,645 in 2025 For equity investors, the question is whether these names should still be classified as crypto or AI infrastructure.BITCOIN TREASURY ARMS RACE HEATS UP WITH A WAVE OF WEDNESDAY FILINGS:A cluster of filings and press releases underscored the accelerating bitcoin treasury trend among publicly traded companies. Jiuzi Holdings(JZXN)announced a $1B plan to acquire 10,000 BTC via equity consideration, sending shares up 36%, per acompany press release.DDC Enterprise(DDC)announced viaSEC 6-Kthat its BTC treasury expanded to 2,183 BTC after purchasing an additional 65 BTC, alongside record 2025 revenue of $39-41M ProCap Financial(BRR)disclosed it repurchased 196,043 shares on March 3 and holds 5,457 BTC, ranking among the top 20 largest publicly traded corporate bitcoin holders, per.Hyperscale Data(GPUS)reported its bitcoin treasury at 610.92 BTC and is targeting a $100M bitcoin balance sheet via weekly dollar-cost averaging, perBarchart. MARA Holdings(MARA)drew attention after its 2026 10-K filing revealed an expanded bitcoin strategy that now permits the sale of BTC held on its balance sheet, not just newly mined coins, perYahoo FinanceMARA VP of Investor Relations Robert Samuels clarified on X that the policy change is not an intention to liquidate most reserves but allows periodic purchases and sales based on market conditions, perCryptoBriefing.MARA holds roughly 53,822 BTC. Separately, American Bitcoin(ABTC), the Hut 8subsidiary co-founded by Eric Trump, announced the purchase of 11,298 new miners adding approximately 3.05 EH/s to its fleet, per acompany press release.ETF FLOWS REVERSE, ARK BUYS THE DIP, AND WALL STREET BUILDS CRYPTO PLUMBING:U.S. spot bitcoin ETFs recorded a 4,046 BTC net inflow on Wednesday, approximately $290.89M, with the trailing seven-day total of 20,816 BTC marking the strongest weekly figure since mid-January and a sharp reversal from February's extended outflow streak, perLookonchainThe prior day, March 3, spot BTC ETFs took in $458.2M and spot ether (ETH-USD) ETFs added $38.7M, according toFarside dataARK Invest's Tuesday trade disclosures showed Cathie Wood purchased $16.15M in crypto-linked equities, 22,452 shares of Coinbase(COIN)($4.09M) and 158,587 shares of Robinhood(HOOD)($12.06M), across ARKK, ARKW, and ARKF, as reported byTraders Union. On the institutional infrastructure front, Tradeweb Markets(TW)led a $31M Series B at a $200M valuation for Crossover Markets, an institutional digital asset ECN, per acompany press release.Tradeweb CEO Billy Hult called it the firm's "entry into institutional crypto," with plans to provide global clients algorithmic order-routing access to crypto spot liquidity.REGULATORY LANDSCAPE SHIFTS FROM D.C. TO ANKARA:SEC Chairman Paul Atkins will headline Day 1 of the Blockworks Digital Asset Summit in New York on March 24-26, alongside BlackRock's Samara Cohen, Morgan Stanley's Amy Oldenburg, and Binance CEO Richard Teng, per acompany press release.Separately,Reuters reportedthat British and U.S. regulators are divided over how to test blockchain-based versions of financial securities, with Britain pushing for a more cautious approach in joint Transatlantic Taskforce talks. Turkey's parliament is considering a draft law that would impose a 10% withholding tax on crypto gains and a 0.03% transaction tax on crypto service providers, expected to generate at least $96M annually,Reuters reported.The CBOE BZX Exchange published aFederal Register noticeproposing listing criteria for options on multi-crypto ETFs, requiring each underlying asset to have at least $700M in average daily market value.PRICE ACTION:As of time of writing, bitcoin was trading at$73,055.88, while ether was trading at$2,146.07,.according to price data from TipRanks.
