The U.S. tariff increase triggers turmoil in the cryptocurrency market, but the continued increase of stablecoins and ETFs suggests a promising outlook for the future | Hotcoin Research Market Insights: 2025
Cryptocurrency Market Performance
Currently, the total market capitalization of cryptocurrencies is $3.13 trillion, with BTC accounting for 60.9825%, amounting to $1.91 trillion. The market cap of stablecoins is $223.9 billion, with a 7-day increase of 3.08%, of which USDT accounts for 63.46%.
This week, BTC's price showed a range-bound fluctuation, with the current price at $96,628; ETH also showed a range-bound fluctuation, with the current price at $2,645.
Among the top 200 projects on CoinMarketCap, a small number increased while most decreased, including: OM with a 7-day increase of 12.92%, VIRTUAL with a 7-day decrease of 41.22%, FARTCOIN with a 7-day decrease of 51.85%, and SPX with a 7-day decrease of 48.72%. AI agent projects saw significant declines, returning to where the dream began.
This week, the net inflow for Bitcoin spot ETFs in the U.S. was $182.4 million; the net inflow for Ethereum spot ETFs in the U.S. was $420.4 million.
The "Fear & Greed Index" on February 8 was 44 (lower than last week), with this week's sentiment: 6 days neutral, 1 day greedy.
Market Prediction: This week, due to the U.S. government's executive order imposing tariffs on Canada, Mexico, and China, panic sentiment emerged in the crypto market, with a single-day drop exceeding 20% over the weekend. However, stablecoins continue to increase, and the inflow for U.S. BTC and ETH spot ETFs remains positive. On-chain observations indicate that short-term funds entering the market in the past six months are beginning to exit, while whales are starting to accumulate coins. This significant drop should be seen as a phase of chip turnover; this period should be cherished. The trading activity on DEX has also shown a certain decline. During this phase, it is recommended to hold mainstream coins and adopt a cautious wait-and-see attitude towards potential sectors.
Understanding Now
Review of Major Events of the Week
On February 3, Trump signed an order imposing a 25% tariff on imports from Mexico and Canada, and a 10% tariff on China, which will take effect on Tuesday. The cryptocurrency market showed a risk-averse trend, with BTC dropping 8% to $92,798.34. Jeff Park, head of alpha strategies at Bitwise, stated that the ongoing tariff war will be "remarkable" for Bitcoin in the long run as the dollar and U.S. interest rates will eventually weaken;
On February 5, according to The New York Times, the U.S. Securities and Exchange Commission (SEC) is cutting a special division that consisted of over 50 lawyers and staff dedicated to handling enforcement actions related to cryptocurrencies. Insiders indicated that this is one of the first concrete actions taken by President Trump and his administration regarding the regulation of cryptocurrencies and other digital assets. One of Trump's initial executive orders aims to promote the growth of cryptocurrencies and "eliminate excessive regulation of digital assets";
On February 5, according to Cointelegraph, Republican leaders of the U.S. House and Senate committees announced the formation of a task force focused on developing a legislative framework for digital assets and stablecoins;
On February 5, Litecoin's official Twitter account announced that the NYSE has submitted a 19b-4 filing to the U.S. SEC for Grayscale's Litecoin ETF, seeking to convert its Litecoin (LTC) trust into a spot ETF;
On February 6, according to Barron's, with the support of the Trump administration, the U.S. banking industry is expected to expand its cooperation with cryptocurrencies, potentially no longer restricting banks from entering the field as during the Biden administration. The Federal Deposit Insurance Corporation (FDIC) plans to modify banking guidelines to allow banks to conduct certain crypto businesses without prior regulatory approval;
On February 6, Arthur Hayes published a blog post stating that the Bitcoin strategic reserve policy is terrible, "The fundamental problem with the government hoarding any asset is that they buy and sell assets primarily for political gain, not financial gain." This policy may change with shifts in the political landscape, thus altering Bitcoin's original trend. Therefore, Arthur Hayes still believes that Bitcoin will retest the $70,000 to $75,000 range. Only if the Federal Reserve, U.S. Treasury, Japan, etc., print money in some form, or establish specific legislation allowing unlicensed cryptocurrency innovation, can the current market conditions improve;
On February 7, according to The New York Post, potential candidates for Trump's cryptocurrency advisory committee have been revealed, including former Kraken general counsel Marco Santori, Ripple co-founder Brad Garlinghouse, podcast host Frank Chaparro, Circle CEO Jeremy Allaire, Coinbase CEO Brian Armstrong, and Crypto.com CEO Kris Marszalek;
On February 8, according to Reuters, President Trump informed Republican lawmakers of plans to announce a reciprocal tariff policy as early as Friday.
Macroeconomics
On January 29, the first interest rate decision of 2025 saw the Bank of Canada cut rates by 25 basis points to 3.00%, in line with market expectations, marking the sixth consecutive meeting of rate cuts, following two previous meetings that cut rates by 50 basis points;
On January 30, the European Central Bank's first meeting of the new year saw the deposit facility rate cut by 25 basis points to 2.75%, in line with market expectations, marking the fourth consecutive meeting of a 25 basis point cut. The main refinancing rate and marginal lending rate were lowered from 3.15% and 3.40% to 2.90% and 3.15%, respectively;
On February 3, according to CoinDesk, Coinbase officially obtained cryptocurrency registration approval from the UK's Financial Conduct Authority (FCA), becoming the largest licensed cryptocurrency trading platform in the UK;
On February 6, the Bank of England cut rates by 25 basis points, lowering the benchmark rate from 4.75% to 4.5%, in line with market expectations, marking the third rate cut in this cycle;
On February 7, according to CME's "FedWatch" data, after the release of U.S. non-farm payroll data tonight, the probability of a 25 basis point rate cut by the Federal Reserve in March dropped from 14.5% to 8.5%, while the probability of maintaining rates rose from 85.5% to 91.5%;
On February 8, the Federal Reserve's monetary policy report indicated plans to stop balance sheet reduction at an appropriate time.
ETF
According to statistics, from February 3 to February 7, the net inflow for Bitcoin spot ETFs in the U.S. was $182.4 million; as of February 7, GBTC (Grayscale) had a total outflow of $21.86 billion, currently holding $19.231 billion, while IBIT (BlackRock) currently holds $56.122 billion. The total market capitalization of U.S. Bitcoin spot ETFs is $115.248 billion.
The net inflow for U.S. Ethereum spot ETFs was $420.4 million.
Envisioning the Future
Upcoming Events
CoinDesk will hold Consensus Hong Kong from February 18 to 20, 2025, in Hong Kong;
ETHDenver 2025 will take place from February 23 to March 2, 2025, in Denver, USA.
Project Progress
The AI data platform Pundi AI announced that its token FX will upgrade to PUNDIAI on February 10, 2025, with the token supply reduced to 1/100;
The AI Agent tokenization cultivation and trading platform Mars Protocol will begin internal testing on February 14;
The mainnet of the open-source software platform Tea Protocol on the Base chain will launch on February 14, 2025.
Important Events
- The UAE SCA released a draft regulation on the tokenization of securities and commodities, with public feedback open until February 14;
Token Unlocking
Cheelee (CHEEL) will unlock 11.85 million tokens on February 10, valued at approximately $93.27 million, accounting for 1.18% of the circulating supply;
The Sandbox (SAND) will unlock 187 million tokens on February 14, valued at approximately $68.81 million, accounting for 6.24% of the circulating supply;
Sei (SEI) will unlock 224 million tokens on February 15, valued at approximately $48.34 million, accounting for 2.25% of the circulating supply.
About Us
Hotcoin Research, as the core investment research department of Hotcoin, is dedicated to providing detailed and professional analysis for the cryptocurrency market. Our goal is to offer clear market insights and practical operational guidelines for investors at different levels. Our professional content includes the "Play and Earn Web3" tutorial series, in-depth analysis of cryptocurrency industry trends, detailed breakdowns of potential projects, and real-time market observations. Whether you are a newcomer exploring the crypto space for the first time or a seasoned investor seeking deeper insights, Hotcoin will be your reliable partner in understanding and seizing market opportunities.
Risk Warning
The cryptocurrency market is highly volatile, and investment carries risks. We strongly advise investors to conduct investments based on a full understanding of these risks and within a strict risk management framework to ensure the safety of funds.
