Bitcoin holds strong as alts show mixed performance

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State of crypto

• Bitcoin holds strong above US$96k as altcoins show mixed performance
• XRP ETF filing acknowledged by US SEC, 65% approval probability expected
• ETF outflows: Bitcoin ETFs see US$585M outflows, as Ethereum struggles
• Solana declines 17% amid cooling market demand

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Bitcoin holds strong above US$96k as altcoins show mixed performance

Bitcoin (BTC) has seen a slight decline in price this week, now trading around US$96,600. Despite this minor pullback, its dominance in the market remains strong at more than 60%, signalling that BTC continues to hold a solid position amidst broader market fluctuations.

Meanwhile, several major altcoins seem to have performed better over the past week, with XRP surging over 10% at its peak, likely driven by ongoing positive regulatory developments. Litecoin and Chainlink also posted healthy gains, reflecting relative stability in a volatile market. Cardano also experienced a modest rise of more than 2%, showing somewhat steady growth.

In contrast, both Ethereum and Solana have experienced declines. Ethereum has seen a slight drop before recovering, while Solana has faced a significant pullback, with its price dropping to about US$168 after a strong rally in January.

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XRP ETF filing acknowledged by US SEC, 65% approval probability expected

The US Security and Exchange Commission (SEC) has formally acknowledged Nasdaq's filing for the CoinShares XRP ETF, opening a 21-day public comment period. This move follows several similar filings for spot XRP ETFs from firms like 21Shares, Grayscale, and Bitwise. Although the acknowledgment doesn’t guarantee approval, it marks a shift towards crypto-friendly policies at the SEC, with analysts giving a 65% probability of the ETF's approval.

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ETF outflows: Bitcoin ETFs see US$585M outflows, as Ethereum struggles

Bitcoin ETFs recorded US$585 million in outflows, ending a six-week inflow streak that had previously brought in over US$5 billion. Despite this, institutional demand remains evident, with BlackRock’s IBIT ETF attracting US$68.44 million while other funds faced withdrawals.

Source: TheBlock.co

Meanwhile, Ethereum ETFs saw weekly outflows of US$26.26 million, highlighting ETH’s ongoing struggle to maintain strong institutional interest. The divergence in ETF flows underscores Bitcoin’s continued dominance, even as its price dipped below US$95,000, influenced by the Federal Reserve’s hawkish stance and higher-than-expected inflation data.

Source: TheBlock.co

This shift suggests that while Bitcoin remains a focal point for institutional investors, Ethereum is facing challenges in sustaining momentum. Market participants are now closely watching how these trends evolve in response to macroeconomic factors and investor sentiment.

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Solana declines 17% amid cooling market demand

Solana, which has been one of the standout performers in attracting capital flows, has just experienced another 17% price drop in the past week. This decline is attributed to a combination of factors, including market-wide cooling and negative sentiment from broader economic pressures. Solana's struggle is further compounded by a slowdown in speculative trading, with its meme coins and decentralised finance (DeFi) projects also seeing reduced interest. These factors seem to have created a "perfect storm".

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Crypto Fear & Greed Index

Source: Fear & Greed Index

BTC Markets in the news

Fear & Greed Podcast Interview: Ethereum fell 26% in a day. What lies ahead for crypto?

BTC Markets CEO Caroline Bowler joins Sean Aylmer to break down the outlook for Bitcoin, Ethereum, and the broader crypto landscape.

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Why should you care?

Because the regulatory landscape is shifting dramatically, especially in regions like the US, APAC, the UK, and the EU, and these changes will define the future of innovation, investment, and adoption in the digital economy. Policy Week 2025 is focused on creating actionable outcomes, ensuring that frameworks are not only adaptive to these changes but also drive sustainable growth.

If you’re passionate about the intersection of technology and regulation, or if your business operates in this evolving space, Policy Week 2025 offers the chance to influence the conversation, network with industry pioneers, and stay ahead of the curve in shaping tomorrow’s digital landscape.

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The week ahead: economic events

Thursday February 20th 

• 12:30am US Building Permits and US Housing Starts
• 6:00am US Fed Funds Interest Rate
• 11:30am Australia Unemployment Rate

Friday, February 21st 

• 10:30am Japan Inflation Rate
• 6:00pm UK Retail Sales MoM
• 7:30pm Germany Manufacturing PMI
• 8:30pm UK Manufacturing PMI and UK Services PMI

Saturday, February 22nd 

• 2:00am US Existing Home Sales

Monday, February 24th 

• 8:00pm Germany Ifo Business Climate Index

Wednesday, February 26th 

• 6:00pm Germany GfK Consumer Climate

Source: Trading economics

Market reflections

Overview

The RBA has reduced the cash rate target to 4.10% after inflation dropped to 3.2% in the December quarter, faster than expected. Australia’s big four banks have passed the rate cut on to home loan customers, easing borrower pressures. Meanwhile, US inflation remains high due to rising costs and falling retail sales. Germany enters a technical recession, Japan sees economic acceleration, the UK experiences modest growth despite trade challenges, and Canadian inflation eases with a cooling housing market.

Australia

• The RBA reduced the cash rate target to 4.10%.
• Australia’s big four banks passed the rate cut on to home loan customers.
• Inflation is easing faster than expected, falling to 3.2% in the December quarter.

Inflation is cooling, rates are falling: What it means for crypto

The Reserve Bank of Australia (RBA) Board lowered the cash rate target to 4.10% and the interest rate on Exchange Settlement balances to 4.00%. The long-awaited 0.25% rate cut was quickly followed by all four of Australia's major banks, Westpac, ANZ, Commonwealth Bank, and NAB, announcing they would pass on the cut to home loan customers. Treasurer Jim Chalmers welcomed the decision, calling it "the rate relief that Australians need and deserve." While acknowledging that the cut won’t solve all economic challenges, he pointed to it as proof of the progress made in the fight against inflation.

According to the RBA, inflation is easing faster than expected, with underlying inflation dropping to 3.2% in the December quarter. This suggests that higher interest rates have effectively rebalanced supply and demand. Wage pressures are also easing, and private sector demand remains subdued, giving the RBA confidence that inflation is heading toward its 2–3% target. However, risks remain, labour market conditions appear tighter than expected, and inflation forecasts for 2026 have been revised slightly higher. While the RBA recognises the progress made, it remains cautious about loosening monetary policy too soon.

What this means for crypto

The RBA's decision to lower interest rates marks a shift in policy that could benefit risk-on assets like crypto. Historically, lower rates improve liquidity and risk appetite, making digital assets more attractive. If inflation continues to moderate, further rate cuts may follow, creating a more supportive macroeconomic environment for crypto. However, uncertainty remains, labour market resilience and global economic risks could influence future monetary policy decisions. Investors will be watching closely, as any further easing could drive renewed momentum in digital asset markets.

Global

• US Inflation pressures persist amid rising costs, retail sales plunge
• Germany enters technical recession as industrial output weakens from sluggish demand
• Japan’s economy accelerates with stronger business investment and trade dynamics
• UK economy shows modest growth, despite weak trade and industrial setbacks
• Canadian inflation eases as housing market slows

United States

Inflation pressures persist amid rising costs, retail sales plunge

US producer prices rose 0.4% in January, exceeding expectations due to surging diesel, food, and energy costs. Core inflation climbed to 3.6% annually, highlighting persistent price pressures. Services saw their sixth consecutive increase, while revised figures suggest inflationary trends remain stronger than initially anticipated.

US retail sales fell 0.9% in January, marking the sharpest drop since March 2023. Harsh weather and Los Angeles wildfires dampened spending, with steep declines in sporting goods, vehicles, and online sales. Only gasoline stations and food services saw gains, signalling weakening consumer demand heading into 2025.

Sources: US BLS, US Census

Germany

Germany enters technical recession as industrial output weakens from sluggish demand

Germany’s economy shrank by 0.3% in Q4 2024, confirming a technical recession. Weak industrial output, sluggish consumer spending, and declining exports weighed on growth. While the labour market remained stable, business sentiment was pessimistic. With high energy costs and weak global demand, economic recovery remains uncertain.

Source: ZEW

Japan

Japan’s economy accelerateswith stronger business investment and trade dynamics

Japan’s economy grew by 0.7% in Q4 2024, accelerating from Q3's 0.4% and exceeding expectations. This marks the third consecutive quarter of growth, driven by a 0.5% increase in business investment and positive contributions from net trade, with exports up 1.1% and imports down 2.1%. Private consumption rose 0.1%, supported by wage growth despite inflation and higher borrowing costs. Government spending increased by 0.3%. With strong business investment and trade dynamics, Japan’s economic outlook is improving as it enters 2025.

Source: Cabinet Office, Japan, Ministry of Finance, Japan

United Kingdom

UK economy shows modest growth, despite weak trade and industrial setbacks

The UK economy grew by 0.1% in Q4 2024, driven by a 0.2% rise in services and a 0.5% increase in construction, although industrial production fell 0.8%. Year-on-year GDP growth reached 1.4%, surpassing forecasts. Despite growth, trade weakened, with exports down 2.5% and imports up 2.1%. Government spending rose 0.8%, offsetting weaker business investment. In December, the economy expanded by 0.4%, led by strong growth in services and manufacturing. The labour market remained robust with an unemployment rate of 4.4%, while employment increased by 107,000, and the inactivity rate slightly decreased.

Source: Office for National Statistics

Canada

Canadian inflation eases as housing market slows

Canada’s inflation slowed to 2.9% in January 2025, driven by lower energy costs. The housing market cooled, with declining sales and stabilising prices. The Bank of Canada may hold rates steady, though strong wage growth remains a concern. Unemployment rose slightly to 6.2%, reflecting job losses in retail and construction.

Source: Statistics Canada

Regulation roundup

Crypto industry ramps up political influence, pushes for regulatory clarity

The crypto industry is intensifying its efforts to solidify its political influence, with key players like Trump’s crypto czar, David Sacks, pushing for legislative action on cryptocurrency regulations. After spending heavily to support crypto-friendly lawmakers, the industry is now eager for concrete regulatory frameworks, including rules for stablecoins and clear guidelines for crypto exchanges. Despite some early victories under the Trump administration, such as repealing SEC rules and initiating a working group on crypto, the industry faces internal divisions as it seeks broader bipartisan support, fuelled by substantial political spending.

European regulator proposes MiCA guidelines for crypto staff competence

The European Securities and Markets Authority (ESMA) has proposed new guidelines for assessing the competence of staff at crypto asset service providers as part of the EU’s Markets in Crypto-Assets Regulation (MiCA). These guidelines aim to ensure that staff providing advice on crypto assets are well-versed in key features, market risks, blockchain technology, and regulatory frameworks. The proposal also calls for minimum qualifications, ongoing professional development, and annual reviews, all aimed at enhancing investor protection and boosting trust in the markets.

Scam awareness

Types of scams on websites

Scammers can pretend to be anyone online to deceive you into trusting them.

Scammers create fake websites to look like well-known brands. They impersonate famous people and make it look like they recommend the product or service. They use fake reviews to make you trust them.

Advertising banners or pop-up windows that contain fake warnings or error messages can pressure you into acting.

Learn more at scamwatch.gov.au

Discover more on our ‘Compliance conversation’ blog page, where we share the latest updates on safeguarding against scams and protecting your assets. Stay informed and stay protected!

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