In markets
“It’s always darkest before the dawn”, they say, and if that’s true, dawn should be coming soon. We are only two months into 2026, and already Bitcoin is on track for its worst quarter since 2018. Since the October 10 flash crash, crypto has only seen 4 positive weeks out of 21 in total. Delphi Digital reports that only 4 of 98 altcoins it tracks have increased in value since last year, while the average coin has dropped 81.4%. The Crypto Fear and Greed Index has fallen to 8, and sentiment is so grim, people have taken to posting terrible news as indicators that things can’t possibly get worse.
So the fact that searches for “Bitcoin is going to zero” are at record highs, or that Bitcoin is closing in on five negative months in a row, are both being interpreted as a sign that things will turn around soon, as these indicators have preceded turnarounds in the past.
President Donald Trump’s erratic tariff war entered a new phase this week, after the Supreme Court disallowed the tariffs he’d imposed under emergency provisions. He immediately imposed 15% tariffs across the board under different powers that will expire in 150 days, so there is more uncertainty to come as the administration searches for other methods to impose them.
Tariff uncertainty and the threat of war with Iran were blamed for Bitcoin’s sharp 5% drop on Monday, although it could also just be the usual low-liquidity weekend shenanigans. It’s not just crypto in turmoil; delivery, payments, and software stocks are falling sharply overnight in the US, in response to AI disruption fears outlined in Citrini’s sci-fi-style AI doom scenario, looking back from 2028. “It is a remarkable reaction,” said Michael O’Rourke, chief market strategist at Jonestrading. “A literal work of fiction sends [the market] into a tailspin.”
Bitcoin mining difficulty surged 15%, suggesting the temporary hashrate decline was more due to winter storms in the US than to unprofitable miners leaving the industry. The Other Parker also put out a detailed theory suggesting the crash was caused by too many funds going long on Bitcoin, meaning that when a short (volatility) fund blew up in October, they were forced to sell to hedge in a downward spiral.
Bitcoin finishes the week down 5.7% to trade around A$91,901 (US$64,932), while Ethereum fell 6.8% to trade around A$2,640 (US$1,863). XRP, Solana & Cardano fell by more than 9% while Dogecoin dropped 8.4%.
From the OTC desk
OTC Heading
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Key Economic Calendar Events (AEDT)
- Wednesday, Feb 25 2026 – 01:00 PM – US President Trump State of the Union Speech
- Friday, Feb 27 2026 – 06:45 PM – FR Inflation Rate YoY (Consensus 0.8%)
- Friday, Feb 27 2026 – 09:30 PM – IN GDP Growth Rate YoY (Consensus 7.2%)
- Saturday, Feb 28 2026 – 12:00 AM – DE Inflation Rate YoY (Consensus 2%)
- Saturday, Feb 28 2026 – 12:30 AM – CA GDP Growth Rate
- Monday. March 02 2026 – 12:45 PM – CN RatingDog Manufacturing PMI
In headlines
SEC offers a shorter haircut
The SEC has issued new guidance allowing broker-dealers to apply a 2% haircut to positions in payment stablecoins, meaning the holdings now count towards net capital requirements. This is more of a big deal than it sounds, as many funds previously assumed they had to set aside 100%, which made crypto trades less appealing. The CEO of Exodus JP Richardson said, “The SEC just handed crypto its most important win of the year so far.”
Clarity is becoming clearer
The chances of the US crypto market structure bill, the Clarity Act, passing have increased following a positive third meeting at the White House between banking and crypto industry representatives. White House Executive Director Patrick Witt said the meeting was “a big step forward… I fully expect we will meet our deadline” to resolve the dispute by March 1. The prospect of crypto firms providing yield on stablecoin deposits “is effectively off the table,” according to journalist Eleanor Terrett, with a potential compromise shaping up whereby crypto protocols provide rewards on transaction activity instead. Coinbase lawyer Paul Grewal called the meeting “constructive and the tone cooperative”, while Ripple’s Stuart Alderoty said they had “rolled up our sleeves and went through specific language.” SkyBridge Capital’s Anthony Scaramucci believes the Democrats will pass the bill because “they don’t want to get crushed in the midterms.”
Bitdeer sells all of its Bitcoin
Publicly traded Bitcoin miner Bitdeer Technologies now owns zero Bitcoin, after selling off its entire stack of almost 2,000 BTC in the past few weeks. Bitdeer recently announced a US$325 million (A$460.7M) convertible notes offering and a US$43.5 million (A$61.7M) equity placement, both aimed at funding data centre expansion and its AI pivot.
UAE sits on US$344 million unrealised profit
The UAE holds about 6,782 BTC worth roughly US$454 million, representing an estimated US$344 million in unrealised profit. Most of the held BTC was generated through state-linked mining operations tied to the Abu Dhabi royal family and major partners such as Marathon Digital.
Its facilities produce about 4.2 BTC daily, reflecting a large-scale, ongoing effort that began in 2022 and has expanded with significant infrastructure investments. Most of its mined bitcoin is used to build a strategic sovereign digital reserve.
CME launches weekend trading
The world’s top derivatives marketplace, CME Group, is set to launch 24/7 trading on May 29. Previously, markets traded around the clock on weekdays but closed on weekends. This led to a difference between the actual Bitcoin price and the CME futures closing price, which was known as the CME Gap. CME trading over the weekend may reduce the risk of sharp sell-offs amid low liquidity.
Bitcoin price discounted over quantum fears
Charles Edwards, founder of Capriole, released new research into Bitcoin’s “existential” threat from quantum computers. He argues that by 2028, QCs will be able to reverse-engineer private keys from public keys, which means the “fair value of Bitcoin should be reduced by 20% today.” Unless Bitcoin upgrades to post-quantum, he says fair value will be reduced by 40% next year and 60% in 2028. Edwards blames Bitcoin’s 50% price drop since the ATH on quantum fears, but Bitcoin Core dev Matt Corallo said that “if that were true, ETH would be up massively”, given ETH already has a post-quantum team. The good news, however, even taking that into consideration, Edwards says Bitcoin is still undervalued by about 30%.
The Moonshot Dispatch
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Until next week, happy trading!
