Crypto Market Steadies, But Fed Jitters Linger
BTC’s modest Saturday gain helped steady the broader crypto market, which rose by 1.01%, taking the total market cap to $3.14 trillion. However, geopolitical risk and uncertainty about the Fed rate path continued to temper BTC demand.
Trump’s ongoing tariff threats remain a crypto headwind. US tariffs could increase import duties, potentially fueling inflationary pressures. A spike in inflation may force the Federal Reserve to maintain a more hawkish stance, weighing on BTC demand.
Trump spooked global markets this week, threatening sweeping tariffs on autos, semiconductor chips, and pharmaceuticals. Significantly, these tariffs may trigger a full-blown US-China trade war, potentially impacting the global economy.
Since Trump’s initial threat of tariffs on Canada, China, and Mexico, BTC has fallen from $105,993 to a February low of $91,274 before steadying.
US BTC-Spot ETF Market Hit by Fed and Regulatory Uncertainty
Recent US tariff developments and Fed signals impacted the US BTC-spot ETF market, which logged outflows of $552.5 million in the week ending February 21 (previous week: -$580.2 million). According to Farside Investors, key flow data for the week ending February 21 included:
- Fidelity Wise Origin Bitcoin Fund (FBTC) saw net outflows of $165.5 million, extending its outflow streak to 4-weeks.
- Bitwise BTC ETF (BITB) reported net outflows of $105.2 million.
- iShares Bitcoin Trust (IBIT) had net outflows of $22 million, its first weekly outflows since January 3.
Prolonged outflows may dampen BTC demand further as investors await fresh price catalysts.