WEEKLY CRYPTO MARKET UPDATE

Week Ending 12th February 2026

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HEADLINE

BTC US$67k. Extreme Fear Grips Markets Amid Broad Selloff

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IN MARKETS

Global risk assets faced renewed pressure this week as persistent inflation concerns and geopolitical tensions weighed on investor sentiment. Traditional equity markets experienced volatility, with technology sectors particularly affected, creating headwinds for digital assets correlated to risk-on positioning.

Bitcoin traded at US$67,290, declining 1.9% over the 24-hour period, reflecting broader market weakness. Ethereum underperformed significantly at US$1,947, down 3.4%, suggesting continued pressure on DeFi and smart contract platforms. XRP held relatively better at US$1.37, declining 2.1%, while Solana experienced pronounced weakness at US$79, down 3.8%, indicating sector rotation away from higher-beta Layer 1 protocols.

Market microstructure revealed elevated volatility across perpetual swap markets, with funding rates turning negative on major exchanges—a technical signal indicating short positioning dominance. Bitcoin dominance remained stable, suggesting the selloff affected the broader digital asset complex uniformly rather than representing specific altcoin weakness.

The Fear & Greed Index registered 11, firmly in "Extreme Fear" territory. This reading typically signals capitulation-level sentiment and has historically preceded medium-term bottoms, though timing remains uncertain. Institutional desks report defensive positioning with increased stablecoin allocations.

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FROM THE OTC DESK

White House Stablecoin Negotiations Reach Impasse

The most significant development impacting institutional positioning this week centers on stalled White House negotiations regarding comprehensive stablecoin legislation. According to multiple sources, discussions between administration officials and Congressional leaders ended without consensus on key regulatory frameworks, creating uncertainty around the timeline for formal digital dollar oversight.

This regulatory ambiguity has prompted institutional treasuries to reassess counterparty exposure to non-bank stablecoin issuers. Price action in major pairs showed increased basis spreads between spot and derivatives markets, reflecting hedging activity and reduced leverage deployment. The US$67,000 level for Bitcoin represents a technical support zone that has attracted modest accumulation, though conviction remains limited pending regulatory clarity.

OTC Desk Activity:

• Net selling pressure from macro funds reducing digital asset exposure amid broader risk-off positioning across portfolios
• Increased hedging flows through options markets, with three-month put skew expanding to highest levels since Q4 2025
• Stablecoin rotation into Treasury-backed instruments as institutional treasuries prioritize regulatory-compliant reserve assets ahead of potential legislation

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KEY ECONOMIC CALENDAR

Monday, 17 Feb, 00:30 SGT – US Retail Sales MoM (Consensus 0.3%) Tuesday, 18 Feb, 21:30 SGT – US Producer Price Index YoY (Consensus 3.2%) Wednesday, 19 Feb, 21:30 SGT – US Consumer Price Index YoY (Consensus 2.9%) Thursday, 20 Feb, 21:30 SGT – US Initial Jobless Claims (Consensus 215k) Friday, 21 Feb, 16:00 SGT – Eurozone Flash Manufacturing PMI (Consensus 47.2) Friday, 21 Feb, 23:00 SGT – US Existing Home Sales (Consensus 4.12M) Monday, 24 Feb, 04:00 SGT – FOMC Meeting Minutes Release

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IN HEADLINES

SEC Leadership Faces Congressional Scrutiny Over Enforcement Pivot

Democratic lawmakers intensified pressure on SEC Chairman Paul Atkins regarding the agency's abrupt withdrawal from multiple cryptocurrency enforcement actions initiated under previous leadership. Congressional testimony revealed concerns about potential conflicts of interest stemming from Atkins' prior industry advisory roles and alleged coordination with Trump administration officials on crypto policy.

The hearing highlighted dropped cases against major exchanges and DeFi protocols, with legislators questioning whether regulatory standards are being applied consistently. For institutional desks, this signals continued uncertainty around enforcement priorities, particularly affecting compliance frameworks for digital asset custody and trading operations. Market participants should monitor whether this Congressional pressure results in renewed enforcement activity or accelerates comprehensive legislative solutions. The regulatory vacuum creates operational risk for institutions expanding digital asset services, particularly regarding securities classification of tokens previously targeted by SEC enforcement.

Tether Emerges as Major US Treasury Buyer

Tether's expansion into US Treasury bills positions the stablecoin issuer among the top 10 global purchasers of short-term government debt in 2026, according to statements from USAT CEO Bo Hines. This development represents a significant shift in stablecoin reserve composition and has implications for both traditional fixed income markets and digital asset stability.

The increased Treasury allocation enhances USDT's reserve transparency and regulatory positioning, potentially attracting institutional users requiring auditable, government-backed collateral. For trading desks, this strengthens the case for USDT as a settlement layer in institutional workflows, particularly for cross-border transactions where traditional banking rails face friction. The move also signals stablecoin issuers' recognition that regulatory compliance requires demonstrable reserve quality. Market participants should note that Tether's Treasury purchases could influence short-term rates if sustained at scale, creating a feedback loop between crypto markets and traditional fixed income.

Paxful Settles Criminal Charges with US$4 Million Fine

Peer-to-peer cryptocurrency platform Paxful agreed to pay US$4 million in penalties after federal prosecutors alleged the exchange "profited from moving money for criminals" through inadequate anti-money laundering controls. The settlement includes enhanced compliance monitoring and operational restrictions on high-risk jurisdictions.

This enforcement action underscores regulators' continued focus on AML/KYC compliance across all digital asset platforms, regardless of decentralized or peer-to-peer operational models. For institutional counterparties, the case reinforces the importance of comprehensive due diligence on exchange partners and custodians. Trading desks should review exposure to platforms with similar operational profiles and ensure compliance frameworks meet evolving regulatory expectations. The US$4 million penalty, while modest relative to exchange revenues, establishes precedent for criminal liability in cases of willful compliance failures—a significant escalation from civil enforcement actions that dominated previous regulatory cycles.

BlackRock Integrates Uniswap for Direct Onchain BUIDL Trading

BlackRock announced integration with Uniswap protocol to enable direct onchain trading of its BUIDL tokenized money market fund, marking a significant step in traditional finance's adoption of decentralized infrastructure. The integration allows institutional investors to access BUIDL liquidity through automated market makers without intermediary custodians.

This development validates DeFi protocols as institutional-grade infrastructure and could accelerate tokenization of traditional securities. For trading desks, the BlackRock-Uniswap integration demonstrates viable pathways for 24/7 settlement and improved capital efficiency in tokenized products. The move also legitimizes Uniswap's position as critical market infrastructure, potentially influencing regulatory treatment of decentralized exchanges. Institutional participants should monitor whether other asset managers follow BlackRock's lead, as widespread adoption would significantly increase onchain liquidity and reduce friction in digital asset workflows. The integration also raises questions about custody models and operational risk management when traditional securities trade through decentralized protocols.

Solana DAT Upexi Reports US$179 Million Loss on Treasury Holdings

Digital asset treasury company Upexi disclosed a US$179 million loss in its latest earnings report, primarily driven by declining SOL token valuations in its treasury holdings, despite doubling operational revenues year-over-year. The loss highlights risks inherent in corporate treasury strategies heavily weighted toward volatile digital assets.

For institutional investors, this case study illustrates the accounting and volatility challenges facing companies adopting digital asset treasury strategies. While Upexi's revenue growth demonstrates operational success, mark-to-market losses on SOL holdings overshadowed fundamental business performance—a dynamic that complicates valuation and risk assessment. Trading desks should note that similar treasury strategies across publicly-traded crypto companies could face pressure if the current market weakness persists, potentially forcing liquidations that exacerbate downward price momentum. The disclosure also raises questions about optimal treasury diversification and hedging strategies for companies with significant digital asset exposure.

Coinbase Launches AI Agent Wallet Infrastructure

Coinbase unveiled new developer tools designed to "give any agent a wallet," enabling artificial intelligence systems to autonomously manage cryptocurrency transactions and interact with blockchain protocols. The infrastructure provides API access for AI agents to execute trades, manage DeFi positions, and conduct onchain operations without human intervention.

This development represents convergence between artificial intelligence and blockchain technology, potentially creating new market participants with algorithmic trading strategies distinct from traditional quantitative approaches. For institutional desks, AI agent wallets could increase market efficiency through automated arbitrage and liquidity provision, but also introduce novel risks around autonomous system behavior and potential flash crash scenarios. The technology may accelerate adoption of blockchain-based payments and smart contracts in AI applications, expanding addressable markets for digital assets. Market participants should monitor whether AI agent activity contributes to liquidity or introduces destabilizing feedback loops during periods of market stress.

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Until next week, happy trading!