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Sead Fadilpašić
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Bitcoin (BTC) has recorded a dip below the $90,000 level. But how much of the drop was the result of various macroeconomic, geopolitical, and regulatory factors? Analysts have shared their valuable insights on the matter.
TLDR:
Over the past 24 hours, Bitcoin has remained mostly unchanged by the time of writing (Thursday afternoon, UTC). It has gone up by just 0.2%, currently trading at $89,582.
Earlier in the day, it saw a notable drop to the $87,300 level, before climbing to the briefly held $90,295.
Observing its performance over the past week, we see it’s now down nearly 8%, trading between $87,653 and $96,875.
Clarity Bill is Far More Important for Market Than Tariff Noise
Nic Puckrin, digital asset analyst and co-founder of Coin Bureau, commented on the CLARITY Act being postponed in the US. The bill was supposed to be passed last year but is still being delayed.
Puckrin says that, despite President Donald Trump’s statement that the bill would be signed “soon”, there’s a reason he didn’t mention it until the very end of his speech in Davos.
“While he may say crypto is a priority, […] it’s clearly not the first item on the agenda,” Puckrin writes.
However, BTC fell below $90,000 yesterday. The most significant lesson learned from the market’s reaction is that “tariff noise” is not that relevant. Instead, the bill is “far more important to the future of digital assets.”
Puckrin writes:
“The momentary euphoria over America’s commitment to crypto quickly faded, and even the cancellation of tariffs on NATO countries couldn’t lift it higher.”
Taking a long time to agree on a perfect piece of legislation is not a good idea, he argues. Instead, passing the bill quickly would bring more benefits. However, this is likely just the first of many delays to “this potentially game-changing digital asset legislation.” And yet, “the longer CLARITY is delayed, the longer uncertainty prevails.”
“The big concern is that this could take years rather than months, leaving the crypto industry in the same limbo it has been fighting so hard to emerge from,” the analyst warns.
Bitcoin Remains Resilient
Dom Harz, Co-Founder of BOB, commented that many are keeping an eye on BTC’s day-to-day price movements. However, Bitcoin has remained “relatively resilient” nonetheless. It’s up 2% this month (at the writing time) despite broader market volatility.
As Davos is wrapping up, he says, “conversations among institutional leaders and investors highlight the growing emphasis on resilience, efficiency, and the search for credible and reliable stores of value.”
Notably, “institutions are shifting from simply holding BTC to searching for opportunities that enable it to function as productive capital, while remaining anchored to Bitcoin’s base layer security,” Harz says.
Therefore, he argues, the focus now needs to be on developing Bitcoin DeFi infrastructure to support secure participation and scale mainstream adoption.
Structural Pressures Stay Intact
Bitunix analysts noted a recent (what appears to be) bond market liquidity shock. It is a stress test of policy credibility within the global financial system, they write.
“In the short term, markets trade on sentiment; in the medium term, on the boundaries of central bank action; and in the long term, on whether institutional demand for non-sovereign assets is genuinely awakened,” the analysts explain.
So, what happened exactly?
On 21 January, Japan’s long-dated government bond market saw a sudden wave of selling. 30-year and 40-year as Japanese Government Bond (JGB) yields jumped more than 25 basis points in a single session, Bitunix writes.
“The magnitude of the move was described as a ‘six-standard-deviation’ event and quickly spilled over into U.S. Treasuries, pushing the U.S. 10-year yield to its highest level since last August,” they explained.
Japanese Finance Minister and the U.S. Treasury Secretary both called for market calm at Davos. The goal is “to contain the spread of a ‘weaponization of bond markets’ narrative.”
However, the analysts warn that “verbal intervention alone is unlikely to fully suppress volatility.” Structural pressures remain intact. These include Japan’s rapidly rising domestic rates, election-related uncertainty, and market expectations of unconventional Bank of Japan bond-buying measures weighing on sentiment.
Therefore, “for the crypto market, the sharp dislocation in sovereign bond markets once again highlights the fragility of traditional safe-haven assets.”
The analysts predict that:
- In the short term, simultaneous pressure on bonds and risk assets may dampen risk appetite in crypto markets.
- Over the medium term, if the politicisation of bond markets and monetary intervention become persistent features, this dynamic could reinforce the allocation case for BTC as a non-sovereign asset.
- Over the longer term, sustained erosion in global interest rates and currency stability could result in a repricing of crypto assets’ strategic weight within portfolio allocation.
