Market Highlights
- Tariffs, the Bybit hack and geopolitical risks caused selling pressure this week.
- President Trump’s updates on U.S. crypto reserve sparked a weekend rally for BTC, ETH, SOL, XRP and ADA.
- The FBI officially linked the US$1.4 billion Bybit hack to North Korea.
- Bitcoin ETFs saw the largest day of outflows ever with US$1.1 billion leaving funds.
- The SEC is dropping its cases against Coinbase, Kraken, Consenys and Uniswap Labs.
Markets Overview
Macro Market Updates:
Market jitters continued for much of the week on fresh tariff threats. President Trump confirmed that 25% tariffs on Canadian and Mexican imports will go ahead, plus an extra 10% tariff is set to begin on all Chinese imports into the U.S. on Tuesday, 4 March. He has also threatened a 25% tariff on imports from the European Union. The S&P 500 lost 1.9% on the news, the Nasdaq declined by 2.6%, and the Dow lost 700 points, signalling the degree of uncertainty that the implementation (and threat of) tariffs brings to the economy and financial markets.
Also this week, a tense exchange between Trump and Ukraine’s President Volodymyr Zelensky added to the week’s volatility. The heated discussion ended with Zelensky being asked to leave the White House without the US-Ukraine minerals deal being agreed upon — a key part of rebuilding Ukraine after the war.
In macro data, U.S. unemployment claims came in above forecast at 242,000. Preliminary gross domestic product (GDP) data for the quarter ending 30 December 2024 came in at 2.3%, sparking a rally in the US Dollar. This week, all eyes will be on President Trump to see how trade policy develops. Plus, the non-farm employment change will be delivered on Friday, 7 March. The European Central Bank delivers its next rate decision on Thursday, 6 March, where it’s expected to deliver a 25-basis-point cut.
Crypto Market Sector Performance
Generation 1 smart contracts was the biggest gainer this week, led by Cardano (ADA) and Hedera (HBAR) growing by 26.9% and 14.1%, respectively. ADA’s gains are due to the 80% rally following President Trump’s updates about Cardano being part of the U.S. crypto asset reserve. HBAR saw gains on news that Canary Capital filed with the SEC to launch an HBAR ETF.
Staking services, bridge networks and AI saw the biggest losses, presumably due to investors deleveraging as risk assets sold off on global macro concerns. This week’s average sector performance was -4%.
Bitcoin (BTC)
This week saw bitcoin dip to its lowest level since November 2024 as the Bybit hack rocked markets and trade war tensions continued. Opening the week at US$96,266, the cryptocurrency declined to a low of US$78,167 on Friday. Much of the week’s losses were recouped throughout Sunday, 2 March, as President Trump outlined the assets that will be in the country’s crypto reserve assets — XRP, Solana, Cardano, Bitcoin and Ethereum. Bitcoin gained almost 12% on the news, but the gains were short-lived after President Trump confirmed his previously announced tariffs would go ahead on Tuesday, 4 March. Bitcoin is currently trading at US$85,655, a decrease of 8.8% on the week.
Short-term holders (STHs), those who have held bitcoin for less than 155 days, have been the most active in selling bitcoin throughout the recent pullback. Throughout 28 February alone, STHs moved 55,000 BTC worth US$4.6 billion to exchanges and sold at a loss. In contrast, long-term holders have been less active with the total supply of bitcoin amongst these investors growing by 47,000 since 14 February.
BlackRock’s iShares Bitcoin Trust (IBIT) is now included in its model portfolio offerings. Going forward, a 1% to 2% share of IBIT will be added to the asset management firm’s Target Allocation with Alternatives and the Target Allocation with Alternatives Tax-Aware portfolios.
Bitcoin’s mining difficulty plunged this week, presumably sparked by a cold snap in the U.S. causing higher energy prices and miners shutting down amid bitcoin’s recent pullback. The difficulty level to produce a new block declined from over 114 trillion to 110.5 trillion.
South Dakota joined four other U.S. states when it blocked a bill to allocate 10% of the State’s funds to establish a bitcoin reserve. Montana, North Dakota, Pennsylvania, and Wyoming recently blocked their respective bitcoin reserve bills.
Bitcoin exchange-traded funds (ETFs) had their worst day on record on Tuesday, 25 February, with over US$1.1 billion leaving funds. The week’s events saw outflows of US$2.6 billion from bitcoin asset investment products, while short bitcoin had minor inflows of US$2.3 billion.
Past performance is not a reliable indicator of future results.
Ethereum (ETH)
Declining throughout most of the week, Ethereum opened at US$2,819 and fell to a low of US$2,073. Sunday saw some of the week's losses regained as ETH rallied by over 17% on President Trump’s update about the assets chosen for a U.S. crypto reserve. ETH later declined by almost 16% on his next announcement about tariffs.
The Federal Bureau of Investigation (FBI) officially linked last week’s US$1.4 billion hack of Bybit to North Korean hackers, tying the attack to Kim Jong Un’s regime. The agency has requested that exchanges block transactions from 48 Ethereum addresses linked to the attack as the group begins laundering its stolen funds.
Following recent calls for leadership changes at the Ethereum Foundation, Aya Miyaguchi, currently executive director, will become the President of the foundation. In a post on X, Ethereum co-founder Vitalik Buterin said that the Ethereum Foundation needs to help the network promote decentralisation rather than evolve like a traditional corporation. He said a new leadership structure will be shared soon.
Ethereum asset investment products saw record outflows of US$300 million this week.
Past performance is not a reliable indicator of future results.
Altcoins
Renzo roadmap
- Renzo (REZ) gained 27.8%, taking its market cap to US$63.5 million. The Solana and Ethereum restaking network gained over 70% when Coinbase announced that REZ has been added to its roadmap. REZ is currently trading at US$0.019.
Computer says yes
- Propy (PRO) gained 26.4%. This takes its market cap to US$61.5 million. The shared storage network that brings real estate on chain saw gains throughout the end of the week, presumably due to Robinhood saying its app will one day be a place where people buy and sell real estate. A series of speaking engagements and the announcement that Propy will attend the White House’s crypto summit also presumably buoyed PRO’s price this week.
DeFi declines
- Aleph.im (ALEPH) lost 38.7%, taking its market cap to US$11.8 million. The open-source decentralised physical infrastructure (DePIN) network may have seen losses due to this week’s developments in artificial intelligence. Chinese company Tencent’s large language model, Hunyuan Turbo S, is now responding faster to increasingly difficult tasks. AI developments often causes a decline in token prices for computing networks.
- Raydium (RAY) declined by 33.8%. This takes its market cap to US$808.6 million. The declines continued this week as Pump.Fun’s testing of a new automated market maker sustained selling pressure.
- Reef (REEF) lost 23.9%, which takes its market cap to US$26.5 million. The layer-1 network built using the Substrate Framework presumably declined as investors’ risk appetites lowered this week. This biggest decline occurred on 27 February when 480 million REEF were swapped with Paribu.
Past performance is not a reliable indicator of future results.
In Other News
This week saw record outflows for US$3.8 billion from digital asset investment products due to the Bybit hack, sustained geopolitical tension, the U.S. Federal Reserve’s hawkish statements, and President Trump’s tariff threats and implementation. The U.S. saw the most notable outflows at US$2.9 billion, while Switzerland and Canada followed with US$73 million and US$16.9 million of outflows, respectively.
In altcoins, Sui saw US$15.5 million of inflows, and XRP saw inflows of US$5 million.
Other crypto news
- Crypto wallet MetaMask will start supporting Solana and Bitcoin transactions this year. From May, users will be able to buy, sell and swap tokens within the Solana ecosystem. And from the third quarter of 2025, users will be able to do the same with Bitcoin. These latest developments form part of MetaMasks’s goal to be “permissionlessly extensible”.
- The Bank of America plans to launch a stablecoin, “Bank of America Coin”, when the U.S. Government passes stablecoin legislation. CEO Brian Moynhihan said that the bank’s stablecoin would be fully dollar-backed. Further, he added that stablecoins are different to bitcoin or blockchains as they share more similarities with money market funds.
Regulatory
- The U.S. SEC released a statement on Thursday saying that the agency doesn’t consider meme coins securities based on the current interpretation of the Howey test. The agency’s statement explained that meme coins won’t be considered a security because they don’t generate yield or offer rights to future income, profiles or assets.
- The U.S. SEC’s case against crypto exchange Coinbase is officially dismissed. Using its discretion to dismiss pending enforcement action, the agency cited its efforts to renew its regulatory approach towards the crypto industry as a key reason that the case is not proceeding. Similarly, Uniswap Labs’ team, Kraken and Consensys also said the SEC is closing investigations into their businesses, though the SEC hasn’t made any official statement about these cases yet. These developments mark the latest in numerous lawsuits that the SEC has dropped, including those against Robinhood and OpenSea.
- A new bill, The Modern Emoluments and Malfeasance Act (MEME Act), has been introduced in the U.S. House of Representatives. The bill will make it illegal for high-ranking government officials to create or promote crypto tokens while also retroactively punishing President Trump and his team for launching meme coins ahead of his inauguration. With a Republican majority in the House, the bill has little likelihood of passing.
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Disclaimer: This assessment does not consider your personal circumstances, and should not be construed as financial, legal or investment advice. These thoughts are ours only and should only be taken as educational by the reader. Under no circumstances do we make recommendation or assurance towards the views expressed in the blog-post. Past performance is not a reliable indicator of future results. The Company disclaims all duties and liabilities, including liability for negligence, for any loss or damage which is suffered or incurred by any person acting on any information provided.
from Caleb & Brown Cryptocurrency Brokerage.
