Crypto Market Drops as US Inflation Data and Tether Actions Hit Sentiment

I. Crypto Market Overview

Key Takeaways

Macro Environment

US core PPI rose 0.8% in January, signaling persistent inflation and likely delaying Fed rate cuts, which may dampen crypto risk appetite. Tether froze $4.2B in USDT linked to illicit activity, impacting DeFi and CEX liquidity. JPYC raised $12M to expand yen-backed stablecoin use, supporting stablecoin adoption in Asia.

Crypto Market

The crypto market saw broad declines over the past 12 hours, with BTC down 1.69% to $65,934 and ETH falling 3.78% to $1,931.69, pressured by inflation data and risk-off sentiment. Altcoins mostly dropped; top gainers include LayerZero (ZRO, +4.02%), Decred (DCR, +0.92%), and Canton Network (CC, -0.45%). Meme and DeFi sectors led losses, while ZRO’s rise was driven by protocol adoption.

Today's Outlook

Today’s key events are the release of US Producer Price Index (PPI) and Canada Q4 GDP data, both providing critical macro signals that could drive volatility across global and crypto markets.

Fear and Greed Index

80.00% Annual Percentile

16 Fear

Total Crypto Market Cap

$2.28T

1.91%

Total Market Trading Volume

$96.89B

4.37%

Altcoin Season Index

41.67%

Quarterly Percentile

34 / 100

Total Futures Market Open Interest

3.00B

9.06%

Futures

374.37B

0.64%

Perpetuals

II. Industry Updates

Macro-economic Policies

US core Producer Price Index (PPI) rose 0.8% in January, far above expectations, signaling persistent inflation and potentially delaying Fed rate cuts, which may dampen crypto market risk appetite and liquidity.

Tether has frozen $4.2 billion in USDT linked to illegal activities, with $3.5 billion frozen since 2023; this action may impact USDT liquidity and trading volumes across DeFi and centralized exchanges.

JPYC, issuer of the Japanese yen stablecoin, raised $12 million in Series B funding, supporting expansion of onshore yen-backed stablecoin use in payments and cross-border settlements, potentially boosting stablecoin adoption in Asia.

Global debt surged by $29 trillion in 2025, reaching a record $348 trillion, highlighting rising fiscal risks that could increase macro volatility and indirectly affect crypto as a hedge against fiat instability.

Cryptocurrency Regulatory Trends

SEC Chair Paul Atkins criticized the agency's previous crypto regulation as a 'missed opportunity,' signaling a shift to a more crypto-friendly approach under the Trump administration. This may boost investor confidence and encourage institutional participation.

Tether has frozen $4.2 billion in USDT linked to illegal activities, including $61 million this week with U.S. DOJ assistance. This demonstrates increasing regulatory scrutiny on stablecoins, impacting compliance standards and market trust.

Polish brokerage XTB's crypto expansion is stalled due to the country's failure to align with EU MiCA regulations. Local firms must seek licenses abroad by July, highlighting regulatory fragmentation's impact on market access and investor options.

Coinbase is challenging U.S. state regulators in federal court over prediction market oversight, arguing that the CFTC has exclusive jurisdiction. The outcome could set important precedents for DeFi and event contract regulation.

Senate Democrats have urged the DOJ and Treasury to investigate Binance for alleged illicit activities and compliance breaches, increasing regulatory pressure on major exchanges and potentially affecting global market stability.

Decred (DCR): Decred surged 9.9% in the past 24 hours, reaching $35.34 with $16M volume. The rally is driven by strong community governance and increased staking activity, boosting market confidence.

LayerZero (ZRO): LayerZero rose 7.0% to $1.64 with $111M in 24h trading volume. The price jump is attributed to growing adoption of its omnichain interoperability protocol and recent integration announcements.

Canton Network (CC): Canton Network gained 4.3% in 24 hours, trading at $0.17 with $292M market cap. The rise is linked to increased ecosystem attention and speculation on upcoming network partnerships.

Smart Money Movements

BlackRock withdrew 10,749 BTC worth approximately $717 million from Coinbase over the past three days, with the latest 4,082 BTC ($269.41 million) moved nine hours ago, signaling ongoing large-scale institutional accumulation.

Trump Media sold 2,000 BTC, reducing its holdings from 11,542 BTC to 9,542 BTC; the previously pledged Bitcoins were used as collateral for hedging and are no longer part of the company's assets.

A whale transferred 23,500 ETH, valued at about $47.47 million, to FalconX for sale and loan repayment, reflecting significant portfolio rebalancing and liquidity management amid market volatility.

Block, Inc. acquired 340 BTC worth $22 million in Q4 2025, continuing its strategy of increasing Bitcoin holdings as part of its corporate treasury allocation.

A mysterious wallet swapped 5,263 ETH (about $10.4 million) for 2,000 XAUT via NEAR Intents over four days, highlighting a notable shift from Ethereum to tokenized gold by an unidentified large holder.

Events to Watch

Feb 27 (Fri)

U.S. Producer Price Index (PPI) and Canada Q4 GDP data are released, offering key macro signals for global markets.

Mar 1 (Sun)

SUI Token unlock: 48.87 million SUI tokens to be released; Pi Network protocol upgrade deadline; Crypto Expo Europe opens in Bucharest.

Mar 2 (Mon)

Blockchain Showcase on Capitol Hill highlights real-world blockchain use; Bakkt closes $48M direct offering; Bitway TGE event launches.

Mar 3 (Tue)

U.S. Employment Report for February released; Eurozone flash inflation data; Japan unemployment figures published.

Mar 4 (Wed)

U.S. ISM Services PMI and S&P Global Services PMI for February released; Australia Q4 GDP and China NBS PMI data published.

III. Phemex Market Focus

New Listings

Feb 27: (ROBO/USDT)

Introducing ROBO Token (ROBO) to the Phemex Spot Market with the trading pair ROBO/USDT.

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