Risk-Off Tune Keeps Cryptos at Bay
A little over a month into the new US administration, investor optimism around Donald Trump's pro-crypto trade is turning to where the next boost is coming from.
US growth fears have compounded tariff nerves despite some relief in bits and phases.
Last week, stocks were hammered, keeping risk assets like cryptos in check on Trump's trade tariff rhetoric. Macro data added to the risk-off sentiment.
Cryptos have fallen off track from their peaks as the dwindling rally in Wall Street stocks has lagged European, Chinese, and Mexican indices, and the so-called Trump Trade for the dollar has become anaemic.
In digital assets, Bitcoin has wavered in a range and is trading under the $96,000 mark, about $13,000 below its record high on the day of Trump's inauguration.
Wall Street's decline on Friday followed data indicating a surprising decrease in service activity amid apprehensions regarding tariffs and cost constraints.
Reports indicated that the White House was exerting pressure on Mexico to impose tariffs on Chinese goods as a component of an agreement.
While Trump said a trade deal with Beijing is possible and that he shares a great rapport with Chinese President Xi Jinping, the US President also proposed 25% universal tariffs on autos, chips, and pharmaceutical imports.
The tariff strike strategy has kept markets on edge through the past month despite investors showing some tolerance to Trump's rhetoric.
Last week, the Nasdaq had its worst week in three months, falling 2.5%. The Magnificent Seven mega stocks were the worst hit.
The wavering of stocks puts the spotlight on Nvidia's earnings report this week.
Investors' predictions for December-quarter sales of approximately $38.5 billion and March-quarter projections of about $42.5 billion will be scrutinized, and their findings could steer the US stock market's course.
Investors want reassurance that the trend of AI-driven investments, which has supported stocks over the previous two years, is still going strong after the panic selling caused by the Chinese startup DeepSeek last month.
According to LSEG, Nvidia is the second most valuable company in the world, with a 6.3% stake in the S&P 500.
It is seen as a measure of the growing artificial intelligence industry. The value of its stock has increased by 550% in the last two years.
Is AI Euphoria Moving to Asia?
With DeepSeek's disruption to the global markets, the question is whether the AI euphoria is moving to Asia from the big-tech American firms.
Despite a sell-off in Wall Street, Asian markets have been buoyed by a Chinese tech stock surge.
The new hope of AI is stoked by Alibaba's solid results, which have boosted Chinese stocks.
The resurgence of Chinese technology was one of the most unexpected developments in the market in 2025.
It's a good reminder that chances can arise for those who are prepared to purchase the same old things that everyone else is selling.
The Hang Seng Tech Index—which tracks Chinese equities listed on the Hong Kong Stock Exchange—rose on Friday by 6.5% to its highest level since the beginning of 2022.
The index has surged 31% since early last year.
After reporting sales beyond expectations, e-commerce giant Alibaba led the advances, increasing 15%.
Lenovo and Bilibili both saw increases due to better-than-expected performance.
Cambricon Technologies, a mainland developer of AI chips, saw a daily limit rise of 20%.
Due to China's regulatory crackdown, the failing economy, and tensions with the US, investors have almost given up on this sector in recent years.
Between its 2021 high and its 2022 low, the Hang Seng Tech Index lost around 75% of its value.
To regain faith in the world's number two economy, the Chinese government unveiled several measures to boost the economy, finances, and markets in September, prompting investors to reevaluate Chinese tech stocks.
After a brief lull, the rally re-emerged in the middle of January.
Investors reevaluated the nation's top internet companies after the breakthrough by local AI startup DeepSeek.
Thanks to President Xi Jinping's meeting with Alibaba founder Jack Ma and other executives, Beijing has recently been seen as more accommodating to the industry.
Cryptos on the Backfoot
While stocks have see-sawed, cryptos have been stuck in lower gear. Bitcoin has been unable to break above the $100,000 mark again.
What did not help was the industry's biggest heist, where hackers stole $1.5 billion worth of Ethereum from crypto exchange Bybit on Friday. Crypto prices hit after Bybit appealed to the best minds to help the exchange. The heist also affected other crypto exchanges, including Coinbase, which won a victory against the US regulator SEC.
The real worry is also where the next boost is coming from. Net inflows into Bitcoin ETFs also dipped based on data from SoSoValue.
The data showed the net inflows were -$62.77 million as of Feb 21.
However, the options positioning data from SoSoValue suggests some buying interest in Bitcoin ETFs going ahead. The net open interest was $608.6 million, with the delta showing a positive difference between the movements in open contracts for calls and puts.
The rising number of open contracts for calls suggests that market makers are hedging their positions with more underlying assets, which usually means interest for more ETFs.
Still, the boost drivers for the OG token seem to have already been priced into the price action so far.
Elsewhere
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