Monetary Policy

JPMorgan estimates the Bitcoin production cost has dropped to $77,000 due to recent declines in network hash rate and mining difficulty. The analyst team states that the decrease in mining difficulty alleviates pressure on remaining miners, but the rebound in hash rate indicates that difficulty and costs may rise during the next adjustment. JPMorgan remains optimistic about the crypto market in 2026, expecting institutional capital inflows to rebound, and the passage of the CLARITY bill will promote this trend.

Bitcoin drops to around $66,000, with US Bitcoin ETFs experiencing outflows of over $3.2 billion in the past 30 days. Data released on Wednesday shows that the US labor market in 2026 started stronger than expected, with non-farm payrolls increasing by 130,000 in January, well above expectations, and the unemployment rate decreasing from 4.4% to 4.3%. The January CPI release on Friday will be the next key point, with expectations of a 0.3% increase in both overall and core CPI month-over-month.

The Federal Reserve's new report recommends treating cryptocurrencies as a separate asset class, highlighting their differences in volatility compared to traditional assets, proposing separate risk weights, and simulating market behavior through benchmark indices to support initial margin requirements for the derivatives market.

ChainCatcher News, according to Jinshi reports, CME “Federal Reserve Watch” shows that the probability of the Federal Reserve maintaining interest rates unchanged until March is 92.2%, and the probability of a 25 basis point rate cut is 7.8%. By April, the probability of a total 25 basis point rate cut is 25.3%, the probability of keeping rates unchanged is 73.1%, and the probability of a total 50 basis point cut is 1.6%. By June, the probability of a total 25 basis point rate cut is 49.9%.

SBF posted on X stating that during Biden's era, companies are forced to relocate overseas, while Trump attracts companies back to the U.S. Democratic Party increases corporate taxes and tightens regulations, leading to capital outflows. Now, the U.S. Department of Justice is no longer prosecuting broadly, and the crypto market is gradually opening up to Americans.

Evercore ISI's Krishna Guhar believes that Kevin Walsh's tough stance on inflation has been exaggerated; Walsh is more of a pragmatic conservative who can distinguish between supply-driven and demand-driven inflation, and his policies may be more flexible. In a tense political environment, the Fed's consensus policy will still face pressure.

The crypto market faces extreme panic this week, with the Fear Index dropping to 9. The total market capitalization is $2.29 trillion, with major cryptocurrencies BTC and ETH remaining weak and consolidating. ETF funds continue to flow out, and the derivatives market is de-leveraging. Despite industry compliance and technological advancements, short-term market sentiment remains subdued. Investors should watch for support levels stabilizing and signs of capital inflow.

Malaysia's central bank has initiated three sandbox programs to test ringgit-pegged stablecoins for institutional payments. Collaborating with major banks, these pilots aim to enhance transaction efficiency while ensuring strict risk management. Successful trials could increase stablecoin adoption in Southeast Asia.

The Digital Asset Innovation Center of Bank Negara Malaysia launched three major projects this year to test the applications of the "Ringgit stablecoin" and "tokenized deposits." Participating institutions include Standard Chartered Bank, Maybank, and United Overseas Bank Group. The tests will be conducted in a controlled environment to assess their impact on financial stability, with plans to provide clear guidelines by the end of 2026.

Recently, China has once again tightened cryptocurrency regulations, banning the issuance of RMB-pegged stablecoins by overseas entities and cracking down on the development of Hong Kong as a digital asset hub. The market response has been tepid, with funds accelerating their withdrawal, and the crypto industry returning to a pragmatic development approach. The contradiction between capital controls and crypto innovation is becoming increasingly apparent.

ChainCatcher News, according to Jinshi reports, German Commercial Bank analyst Michael Pfister stated in a report that the better-than-expected U.S. non-farm employment data prompted the market to lower expectations of Fed rate cuts, and the dollar remains high. However, U.S. President Trump called for further rate cuts, which to some extent restrained the dollar from rising further. He pointed out that Trump's stance contradicts traditional economic theory and may imply that the Fed's future rate cuts will exceed current market expectations.

The Central Bank of the United Arab Emirates and the Hong Kong Monetary Authority held their third meeting in Abu Dhabi to discuss strengthening financial services cooperation and connectivity, covering topics such as cross-border debt markets, digital assets, and stablecoin regulation, as well as promoting interoperability of the central settlement system for debt instruments.

QCP Capital's Elbert Iswara believes that the current bear market is a liquidity reset, with the market affected by risk aversion sentiment, ETF fund outflows, and derivatives adjustments amplifying volatility. Bitcoin, as a risk asset sensitive to liquidity, performs closely with macro factors. In the short term, attention should be paid to key price levels, ETF fund flows, and leverage liquidations. In the long term, Bitcoin's value drivers are adoption rate and market structure maturity.

ChainCatcher News reports that according to Jinshi, Monex's Head of Macro Research Nick Rees stated in a report that the U.S. employment data for January was strong, eliminating market expectations of a rate cut by the Federal Reserve in March. However, Monex still expects the Federal Reserve to resume rate cuts in June. Rees pointed out that the market is digesting this robust employment data, and as a result, expectations for rate cuts have naturally decreased.

On February 12, the largest banking lobbying organization in the United States—the American Bankers Association (ABA)—submitted a comment letter to the Office of the Comptroller of the Currency (OCC), urging it to slow down the approval process for cryptocurrency-related licenses until Congress completes rules for stablecoins and digital assets. The association warned that prematurely approving new digital asset institutions into the national banking system could pose potential risks to financial stability and resolution mechanisms. Currently, institutions including Circle, Ripple, BitGo, Paxos, and Laser Digital (a subsidiary of Nomura Securities) are applying for or already hold OCC conditional trust bank licenses. World Liberty Financial, associated with Trump, also submitted an application covering its $1 stablecoin. The ABA believes that, in the absence of the implementation of the GENIUS Act and its supporting regulations, the OCC should not follow the traditional approval pace.

The Bank of England announced on February 10th the selection of Chainlink to participate in the "Synchronous Lab" project, exploring how central bank digital currencies can be atomically settled with blockchain assets. Eighteen institutions including Swift, London Stock Exchange Group, Chainlink, UAC Labs, and others are testing scenarios such as tokenized bonds, collateral management, and foreign exchange trading. The plan will launch in spring and operate for six months, simulating real-world transactions in a controlled environment without handling actual funds.

The Bank of England has launched the "Sync Lab," collaborating with 18 institutions including Chainlink to test settlement mechanisms for central bank digital currencies and blockchain assets, aiming to modernize the real-time gross settlement system RTGS. This move reflects a focus on digital asset integration, paves the way for future stablecoin regulations, and demonstrates the UK's firm stance in the global digital finance race.