TLDR
- Bitcoin held steady at $68,000 on Tuesday as holiday closures in major markets reduced trading activity and investors awaited key U.S. economic data
- The cryptocurrency has lost nearly 50% of its value since hitting a record high in October due to concerns about Federal Reserve policy under Trump’s nominee Kevin Warsh
- Corporate Bitcoin holders Strategy Inc and Metaplanet Inc reported major losses on their holdings in the fourth quarter
- U.S. stock futures declined on Tuesday with S&P 500 futures down 0.4% and Nasdaq 100 futures falling 0.7% as AI disruption fears continue
- Markets face a shortened trading week after Presidents Day with key inflation data and Fed meeting minutes due this week
U.S. stock futures pointed lower on Tuesday as investors returned from the Presidents Day holiday. The S&P 500 futures dropped 0.4% while Nasdaq 100 futures fell 0.7%. Dow Jones Industrial Average futures declined 0.3%.
The tech-heavy Nasdaq Composite posted its fifth consecutive weekly loss on Friday. This marked the longest losing streak for the index since 2022. The Dow and S&P 500 have fallen in four of the past five weeks.
Concerns about artificial intelligence disruption across multiple industries have weighed on technology stocks. Wealth management, transportation, and logistics sectors have all faced scrutiny over AI’s potential impact. These worries have overshadowed positive inflation data from last week.
Bitcoin remained relatively stable on Tuesday, trading at $68,000 despite light volume. Holiday closures in several major markets reduced trading activity across cryptocurrency exchanges. Investors also showed caution ahead of important U.S. economic releases.
The world’s largest cryptocurrency has experienced a sharp decline in recent months. Bitcoin has lost nearly 50% of its value since reaching a record high in October. The prolonged sell-off has affected the broader cryptocurrency market.
Market participants have grown concerned about U.S. monetary policy direction. Kevin Warsh, President Donald Trump’s nominee for Federal Reserve Chairman, is viewed as less dovish than previous expectations. This has raised worries that monetary conditions will remain tighter than anticipated.
Reports emerged this week about a purported “loyalty pledge” signed by Warsh. Questions continue to circulate about the implications for Fed independence. The situation has added to market uncertainty about future policy decisions.
Corporate Bitcoin Holders Report Losses
Major corporate Bitcoin holders have disclosed substantial losses on their cryptocurrency investments. Strategy Inc stated it could withstand a Bitcoin price crash down to $8,000 per coin. However, the company reported a deep loss in the fourth quarter.
The recent Bitcoin selloff has raised concerns about Strategy’s debt structure. Some of the company’s debt is tied to the value of its Bitcoin holdings. This creates additional risk if cryptocurrency prices continue to decline.
Japanese hotelier Metaplanet Inc also reported major losses on its Bitcoin treasury. The company recorded a valuation loss of approximately 102.2 billion yen. These corporate losses highlight the risks of holding large cryptocurrency positions.
Economic Data and Market Outlook
Several key economic indicators are scheduled for release this week. Industrial production data and trade figures will provide insight into economic activity. The Personal Consumption Expenditures index, the Fed’s preferred inflation gauge, is due Friday.
Minutes from the Federal Reserve’s January meeting will be released Wednesday. Investors will scrutinize the minutes for clues about future monetary policy. The combination of data releases and Fed minutes will likely influence market direction.
Other major cryptocurrencies showed modest gains on Tuesday. Ethereum rose 0.9% to $1,976, while XRP increased 1.4% to $1.48. BNB, Solana, and Cardano posted gains between 1.7% and 3%.
Memecoins underperformed the broader market on Tuesday. Dogecoin fell 2.2% while Trump-themed token $TRUMP dropped 3.7%. The divergence shows continued volatility within different cryptocurrency segments.
Corporate earnings remain a focus for equity investors this week. Walmart, DoorDash, and Molson Coors are scheduled to report results. These reports will provide additional insight into consumer spending and business conditions.
January’s consumer price index data came in below estimates on Friday. The cooler inflation reading provided some relief on price pressures. However, concerns about economic growth and sector disruption have prevented a sustained market rally.
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