US Tariffs Trigger Volatility in Crypto Market, but Stablecoins and ETFs Continue to Grow — A Positive Outlook for the Future | Hotcoin Research Market Insights: February 3 — February 7, 2025

Cryptocurrency Market Performance

Currently, the total market capitalization of cryptocurrencies is $3.13 trillion, with Bitcoin (BTC) accounting for 60.98%, amounting to $1.91 trillion. The market capitalization of stablecoins is $223.9 billion, with a 7-day increase of 3.08%, and USDT holds 63.46% of the market share.
This week, BTC prices showed a range-bound movement, with BTC currently priced at $96,628. Ethereum (ETH) also displayed a range-bound trend, priced at $2,645.
Among the top 200 projects on CoinMarketCap, a small portion saw gains while the majority saw declines. Notable changes include: OM with a 7-day increase of 12.92%, VIRTUAL with a 7-day decline of 41.22%, FARTCOIN with a 7-day decline of 51.85%, and SPX with a 7-day decline of 48.72%. AI agent projects suffered significant losses and have returned to the starting point.
This week, net inflows for US Bitcoin spot ETFs were $182.4 million, and US Ethereum spot ETFs saw net inflows of $420.4 million.
As of February 8, the “Fear & Greed Index” stands at 44 (lower than last week), with market sentiment being neutral for 6 days and greedy for 1 day.

Market Outlook

This week, following the US government’s executive orders imposing tariffs on products imported from Canada, Mexico, and China, panic sentiment swept the crypto market, leading to a more than 20% drop on a single day last weekend. However, the continuous growth of stablecoins and the rise in market inflows into BTC and ETH spot ETFs suggest positive momentum for the future. On-chain observations show that short-term funds entering the market in the past six months are beginning to exit, while whales have entered a “coin accumulation” mode. This dip should be seen as a “chip handover” phase, and this period should be appreciated. The trading activity on decentralized exchanges (DEX) has also shown some decline. During this phase, it is recommended to hold mainstream coins and adopt a cautious outlook on potential tracks.

Recent Major Events

1. February 3: Trump signed an executive order imposing a 25% tariff on imports from Mexico and Canada and a 10% tariff on imports from China. This order will take effect on Tuesday. The cryptocurrency market showed a flight to safety, experiencing a sharp drop, with BTC falling 8% to $92,798.34. Jeff Park, Head of Alpha Strategy at Bitwise, stated that the ongoing tariff war will have “stunning” long-term effects on Bitcoin as the US dollar and US interest rates are likely to weaken over time.
2. February 5: According to The New York Times, the US Securities and Exchange Commission (SEC) is downsizing a special unit previously staffed by over 50 lawyers and employees responsible for handling enforcement actions related to cryptocurrencies. Sources indicated this is one of the first concrete actions taken by President Trump’s administration on cryptocurrency and digital asset regulation. One of Trump’s initial executive orders aims to promote cryptocurrency growth and “eliminate excessive regulation of digital assets.”
3. February 5: According to Cointelegraph, Republican leaders in both the House and Senate announced the formation of a working group focused on developing a digital asset framework and legislation for stablecoins.
4. February 5: Litecoin’s official Twitter account announced that the NYSE has submitted a 19b-4 filing to the SEC to seek approval to convert its Litecoin (LTC) Trust into a spot ETF.
5. February 6: According to Barron’s, with the support of the Trump administration, US banks are expected to expand their cooperation with cryptocurrencies, potentially reversing the Biden administration’s stance on restricting banks’ entry into the sector. The Federal Deposit Insurance Corporation (FDIC) plans to amend its banking guidelines to allow banks to engage in certain crypto activities without requiring prior regulatory approval.
6. February 6: Arthur Hayes, in a blog post, stated that Bitcoin’s strategic reserve policy is flawed. “The fundamental issue with governments hoarding any asset is that they trade them mainly for political gain rather than financial interest.” This policy may change with political shifts, thereby altering Bitcoin’s original trajectory. As a result, Hayes still believes that Bitcoin will retest $70,000 to $75,000. He further argues that only actions such as money printing by the Federal Reserve, US Treasury, or Japan, or specific legislation allowing unlicensed cryptocurrency innovation, can improve the current market conditions.
7. February 7: According to the New York Post, potential candidates for Trump’s cryptocurrency advisory council have been revealed. These industry executives include 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.
8. February 8: According to Reuters, President Trump informed Republican lawmakers of plans to announce a reciprocal tariff policy as early as Friday.

Macroeconomic Events

1. January 29: The first interest rate decision of 2025 saw the Bank of Canada raised rates by 25 basis points to 3.00%, in line with market expectations. This marks the sixth consecutive rate cut, with the previous two meetings cutting rates by 50 basis points.
2. January 30: The European Central Bank (ECB) held its first monetary policy meeting of the new year, lowering its deposit facility rate by 25 basis points to 2.75%, in line with market expectations. This is the fourth consecutive meeting with a 25 basis point rate cut. The main refinancing rate and marginal lending rate were reduced from 3.15% and 3.40% to 2.90% and 3.15%, respectively.
3. February 3: According to CoinDesk, Coinbase officially received crypto registration approval from the UK Financial Conduct Authority (FCA), becoming the largest licensed cryptocurrency exchange in the UK.
4. February 6: The Bank of England cut its benchmark interest rate by 25 basis points, reducing it from 4.75% to 4.5%, in line with market expectations. This marks the third rate cut in the current cycle.
5. February 7: According to CME “ FedWatch tool” data, after the release of the US non-farm payrolls data, 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 no change rose from 85.5% to 91.5%.
6. February 8: The Federal Reserve’s monetary policy report indicates that it plans to halt balance sheet reduction when the timing is appropriate.

ETFs

Between February 3 to February 7, net inflows into US Bitcoin spot ETFs totaled $182.4 million. As of February 7, the Grayscale Bitcoin Trust (GBTC) saw outflows of $21.86 billion, with $19.23 billion remaining in holdings. BlackRock’s iBIT (BlackRock) currently holds $56.12 billion. The total market capitalization of US Bitcoin spot ETFs is $115.25 billion.
Net inflows into US Ethereum spot ETFs totaled $420.4 million.

Looking Ahead

Upcoming Events

CoinDesk will hold Consensus Hong Kong from February 18 to 20, 2025 in Hong Kong.
ETHDenver 2025 will be held from February 23 to March 2, 2025 in Denver, USA.

Project Updates

The AI data platform Pundi AI will launch its token FX upgrade, rebranding it as PUNDIAL, on February 10, 2025, reducing the token supply to 1/100 of its current supply.
The AI Agent tokenized development and trading platform Mars Protocol will begin its internal testing on February 14, 2025.
The Tea Protocol on the Base blockchain will launch its mainnet on February 14, 2025.

Important Events

The UAE SCA has released a draft regulation on the tokenization of securities and commodities, with the public invited to provide feedback by February 14.

Token Unlocks

Cheelee (CHEEL) will unlock 11.85 million tokens on February 10, worth approximately $93.27 million, accounting for 1.18% of its circulating supply.
The Sandbox (SAND) will unlock 187 million tokens on February 14, worth approximately $68.81 million, accounting for 6.24% of its circulating supply.
Sei (SEI) will unlock 224 million tokens on February 15, worth approximately $48.34 million, accounting for 2.25% of its circulating supply.

About Us

Hotcoin Research, as the core investment research department of Hotcoin, is dedicated to providing comprehensive and professional analysis of the crypto market. Our goal is to offer clear market insights and practical operational guidance for investors at all levels. Our professional content includes “Play to Earn Web3” tutorial series, in-depth analysis of crypto market trends, detailed analysis of potential projects, and real-time market observations. Whether you are a newcomer exploring the crypto world or a seasoned investor seeking deep insights, Hotcoin is your reliable partner for understanding and seizing market opportunities.

Risk Disclaimer

The crypto market is highly volatile, and investment involves risks. We strongly advise investors to fully understand these risks and operate within a strict risk management framework to ensure the safety of their funds.

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