Inflation Jumps, Markets Shake as Bitcoin Drops Below $95K

DAILY MARKET OVERVIEW

Market Reacts To CPI

👋 Hey Crypto Enthusiasts! Inflation fears, Federal Reserve decisions, and Trump’s aggressive economic stance are driving markets today. Despite a negative reaction, Goldman Sachs is doubling down on Bitcoin and Ethereum investments. Let’s dive in!

📉 Inflation & CPI: The Macro Shock

The latest U.S. Consumer Price Index (CPI) report showed inflation rising to 3% YoY - higher than expectations. Core inflation hit 3.3%, reinforcing fears that inflation remains sticky.

💡 Key Implications:

• Higher-than-expected inflation could delay Federal Reserve rate cuts, keeping liquidity tight for risk assets.

• Crypto markets reacted negatively, with Bitcoin dropping below $95,000 and the broader crypto market losing 5% in value.

• The Fear and Greed Index fell to “Fear” levels, showing increased market uncertainty.

🎭 Trump vs. Powell: The Interest Rate Battle

President Donald Trump is calling for immediate rate cuts, claiming they would align with his tariff policies to boost the economy. However, Fed Chair Jerome Powell remains firm:

💥 This push-and-pull between Trump and Powell is making markets more volatile. Investors now await further signals from the Fed, as rate cuts remain uncertain.

🛠️ Tariffs & Market Jitters

Trump’s tariffs on China, Canada, and Mexico have already caused turbulence:

• Trade war fears triggered $2 billion in liquidations in early February.

• Some analysts believe the tariffs could fuel inflation further rather than reduce it.

• Gold, often seen as a hedge against inflation, hit a new all-time high, while Bitcoin failed to maintain its previous rally.

Despite the uncertainty, some investors see Bitcoin as "digital gold" and expect it to recover as inflationary pressures continue.

💰 Goldman Sachs Doubles Down on Bitcoin & Ethereum

While markets panic, Wall Street is buying. Goldman Sachs has increased its Bitcoin ETF holdings to $1.5 billion and boosted its Ethereum exposure by over 2,000%.

🔎 Goldman Sachs’ Crypto Moves:

• Bitcoin ETF holdings jumped 177% to $1.52 billion.

• Ethereum ETF holdings skyrocketed from $22M to $476M.

• Major investments went into BlackRock’s iShares Bitcoin Trust (IBIT) and Ethereum Trust (ETHA).

This institutional investment signals long-term confidence in crypto, despite short-term bearish sentiment.

📌 Final Thoughts

• Inflation concerns and Fed policy are keeping markets volatile.

• Trump’s tariffs and rate-cut demands add uncertainty to the macro outlook.

• Institutional investors like Goldman Sachs are still accumulating BTC and ETH, betting on long-term upside.

🧐 Will Bitcoin regain its role as an inflation hedge, or will macro conditions drive it lower? Stay tuned as 2025 continues to unfold.

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The Unexpected Launch of Pi Coin ⁉️ 

After years of anticipation, Pi Network has finally announced its Open Network launch, surprising the whole crypto space.

• The long-awaited event is set for February 20, marking a significant milestone for its massive user base.

Major exchanges OKX and Bitget have confirmed they will list the PI/USDT trading pair on launch day, and speculation is mounting that Binance may follow suit, further amplifying Pi’s exposure.

📌 A Six-Year Journey: From Mobile Mining to Open Network

Launched in 2019, Pi Network introduced a unique model allowing users to mine Pi directly from their smartphones, eliminating the need for traditional mining hardware. However, the project has faced years of skepticism due to its extended development timeline and lack of a fully functional blockchain - until now? 🤔 

Pi Coin Overview

• 15 million KYC-verified users on their app, surpassing its initial goal.

• 19 million total verified users, creating significant demand potential.

• Unverified users can still complete KYC after launch and access Pi-based applications.

• High volatility is expected as Pi’s price remains unknown ahead of trading.

⏳ Will Pi Network Finally Deliver?

With multiple delays and mounting skepticism, February 20 could be a defining moment for Pi Network. Will it successfully transition to a fully operational ecosystem, or is another setback on the horizon?

NEWS OVERVIEW

The Latest Crypto Headlines 📰 

SEC Prioritizes Solana ETFs, Raising Hopes for Altcoin Approvals
The SEC opens a review for four Solana ETF applications, signaling increased institutional demand for altcoin investment products.

Japanese Game Developer Gumi Expands Into Bitcoin and Staking
Gumi Inc. announces a $6.58M Bitcoin acquisition, becoming the first publicly listed Japanese company to stake BTC in Babylon protocol.

Fed Chair Powell Confirms No CBDC Under His Leadership
Federal Reserve Chair Jerome Powell shuts down the possibility of a U.S. digital dollar, aligning with Republican lawmakers’ stance against CBDCs.

Ethereum Hits Deep Undervaluation According to Bitwise
Ethereum has underperformed against Bitcoin, but Bitwise analysts predict a price recovery, citing historical February trends and long-term fundamentals.

YOUTUBE INFLUENCER SUMMARY

Summary From The Top Influencers 📷️ 

Lark Davis - Sorry, But The Crypto Bull Market Is Not Over (12.02.2025 Summary)

Lark Davis is pushing back against the growing sentiment that the crypto bull market has peaked. While some traders are convinced it’s time to pack up and wait for the next cycle, Davis argues that the biggest moves are still ahead. Here’s why he believes the bull market is far from over.

1. Bitcoin’s Cycle Still Has Room to Run

• Despite recent market downturns, Bitcoin remains mid-cycle based on multiple on-chain and technical indicators.

• Previous bull cycles didn’t peak until Bitcoin dominance started to decline. Right now, Bitcoin dominance is still rising, signaling we haven’t reached mass euphoria.

• Historically, the crypto market tops when retail investors flood into altcoins, which hasn't happened yet.

2. Liquidity & Macro Factors Support Further Growth

• M2 Money Supply Expansion: Analysts predict the M2 supply will continue increasing into early 2026. Historically, more liquidity fuels risk asset rallies, including crypto.

• Rate Cuts Incoming: The Fed is expected to pivot toward interest rate cuts, reducing borrowing costs and increasing liquidity.

• Weaker Dollar Ahead: A declining U.S. dollar boosts Bitcoin and other risk assets, reinforcing bullish momentum.

3. The Four-Year Cycle Theory Aligns with Late 2025 Top

• The historical four-year cycle suggests a Bitcoin peak around October 2025, aligning with the expected vote on the Bitcoin Strategic Reserve Bill in Congress.

• If history repeats, the crypto market may not top until Q4 2025, with a major local top potentially in March/April 2025.

• The Pi Cycle Top Indicator also points to a late 2025 peak.

4. Global Adoption & Policy Shifts

• China’s Crypto Unban Rumors: Speculation is growing that China may reverse its crypto ban, following Russia’s pro-crypto stance and the U.S. embracing digital assets.

• India & Japan Changing Stance: India is reportedly reconsidering its restrictive crypto policies, while Japan is easing crypto taxation and allowing ETFs.

• Trump’s Crypto Push: Trump’s campaign is focusing on making the U.S. a global crypto leader, with influential voices like David Sacks advocating for strong pro-crypto policies.

5. Market Volatility is Normal – Smart Investors Take Profits

• The recent liquidation event was likely a bear trap, not a sign of a market top.

• While volatility will continue, Davis warns traders to take profits consistently rather than riding their bags into the next bear market.

• Altcoins, especially AI and meme coins, are highly reflexive – they pump hard but also crash hard in bear markets.

Final Take

Lark Davis remains bullish on crypto, believing the best days of the bull market are ahead. Liquidity expansion, rate cuts, historical cycle patterns, and global policy shifts are all lining up for a major rally into late 2025. However, he reminds investors to stay disciplined and take profits, because when the bear market finally arrives, it will be brutal.

🚀 The bull market is not over – get ready for the next leg up!

Benjamin Cowen - The Misallocation of Capital in Crypto (Memecoins) (12.02.2025 Summary)

Benjamin Cowen dives into what he sees as one of the biggest problems in crypto right now: the misallocation of capital toward meme coins while everything in between Bitcoin and speculative gambling gets ignored. He argues that the market has shifted away from development and real utility, creating a two-tiered ecosystem of Bitcoin maxis and meme coin speculators.

1. Bitcoin Dominance Continues to Climb – And That’s a Good Thing

• Bitcoin dominance has risen from 38-39% in 2021 to 64% today, following a historical trend where altcoins bleed against Bitcoin until the Federal Reserve pivots.

• Many traders keep calling for altseason, but Cowen reminds us that true altseason doesn’t begin until alt/BTC pairs reach historical lows, which hasn’t happened yet.

• Altcoins are still bleeding against Bitcoin, just as they have been since 2021, showing that the market isn’t ready for a broad altcoin rally yet.

2. Meme Coins – The Biggest Misallocation of Capital in Crypto

• Crypto’s attention is polarized between Bitcoin and meme coins, with everything in between being ignored or undervalued.

• The idea of a "meme coin super cycle" is a myth, pushed by influencers who profit from promoting these projects.

• Others/BTC (a measure of small-cap altcoins vs. Bitcoin) has been declining for years, proving that meme coins collectively bleed against Bitcoin over time.

• Influencers pump meme coins, make money, and move on – leaving their followers holding worthless bags.

• Retail traders are getting rugged within 48 hours, losing money and leaving the market again, preventing long-term adoption.

3. Crypto Has Stopped Focusing on Development

• Previous cycles were driven by innovation (DeFi in 2020, NFTs in 2021), but this cycle has focused only on speculation and ETFs.

• Regulatory fears in 2023-2024 discouraged builders, leading to fewer new projects with real utility.

• Investors and traders have stopped looking for value and are now only chasing quick gains in meme coins.

• The crypto industry is currently more focused on getting retail back into the market rather than building something meaningful that would attract them naturally.

4. The Market Needs to “Heal” Before Real Growth Happens

• The current cycle is similar to past market resets, where altcoin pairs against BTC continue to drop until they reach historic lows.

• Bitcoin will likely remain dominant until the Federal Reserve officially pivots from quantitative tightening (QT) to quantitative easing (QE).

• Only after altcoins reach extreme lows against BTC will there be an environment for real altseason and new opportunities.

• The market needs to shift back toward development and real use cases, rather than endless speculation on meme coins.

Final Take

Cowen believes that meme coin speculation is not sustainable, and that as an industry, crypto must move away from the current cycle of pump-and-dump projects and return to focusing on innovation. Bitcoin remains the safest bet, while most altcoins continue to bleed against BTC. Until real development resumes, most investors are better off sticking with Bitcoin rather than gambling on short-lived meme coin hype cycles.

🚨 Crypto needs to refocus on real value – not just hype.

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