Crypto Market

BTC and ETH Market Insight

The Federal Reserve kept rates steady as anticipated and pivoted to a hawkish policy stance, notably excising the critical phrase regarding "progress toward the 2% inflation objective" from its statement. Crypto markets extended their measured recovery for another week with absent retail FOMO pressure. In recent years, US rate cuts have typically been bullish and hikes bearish, but as the crypto market expands, its sensitivity to these changes may lessen, with major bull cycles historically occurring when there's little reliance on global stock markets. Bitcoin dominance marked its consecutive green candles, signaling a structural shift in this cycle with liquidity concentrating in BTC rather than ETH and altcoins.

Upcoming Macro Calendar – Source: Trading Economics

Options Market

The imposition of 25% tariff on Canadian and Mexican goods and a 10% levy on China by the US has triggered a sharp selloff across multiple asset classes. Crypto markets saw nearly $2 billion in liquidations, with ETH hit harder than BTC. Near-term implied volatility jumped on the drop, ETH in particular - saw 1-week ATM IV hit 120 handle at the high before cooling down to 90+. Downside protection demands and plays emerged with call unwinding and put buying. Skew drifted to favour puts in the front-end. The market is expected to remain volatile as Trump prepares to negotiate with Canada and Mexico.

Altcoins and Blockchain News

• The Salvadoran Congress quietly passed an amendment to the "Bitcoin Law," removing Bitcoin as the official currency and making its use entirely dependent on individual choice.

• On the 1st of the month, US President Trump signed an executive order imposing a 10% tariff on goods imported from China. Goods imported from Canada and Mexico are subject to a 25% tariff.

• By 2025, the total amount of USDC minted on Solana by Circle has reached 6 billion coins.

• Chainlink has announced the launch of a new data product, the Chainlink DeFi Yield Index (CDY Index), which aggregates DeFi lending rates across the market using the Chainlink standard.

• Circle officially announced that native USDC is now live on the Aptos network.

• The on-chain infrastructure for token distribution and credential verification, Sign, has completed a $16 million financing round with Yzi Labs leading. Altos Ventures, HackVC, and Amber Ventures also participated.

• Metaplanet, a listed Japanese company, has officially announced its Bitcoin strategic plan for 2025 to 2026, intending to hold 10,000 bitcoins by the end of 2025, increasing to 21,000 bitcoins by the end of 2026.

• pump.fun is facing a collective lawsuit where the plaintiffs accuse pump.fun of violating US securities laws by marketing and issuing unregistered and highly volatile meme coins, exposing investors to significant financial risks.

Macro

The major benchmarks finished a volatile week mostly lower: the DJIA added +0.3%, the S&P 500 lost 1.0%, and the Nasdaq lost 1.6%. The high-tech oriented Nasdaq Composite started the week with a steep drop following the emergence of a Chinese AI developer named DeepSeek, with the tech giant NVIDIA dropping around 17% on Monday. Chinese equities closed from Tuesday for the Chinese New Year.