Bitcoin, Ethereum Drop 5.8%, 11.5% as Global Stocks Tumble 2.2%-3.1%

Bitcoin and Ethereum prices continued to decline as global stock markets experienced a downturn. The S&P 500, Nasdaq-100, and Dow Jones Industrial Average all saw significant drops, with the S&P 500 falling 2.6%, the Nasdaq-100 losing 3.1%, and the Dow Jones Industrial Average declining 2.2%. This market stress was further indicated by the Nikkei 225 and Hang Seng futures, which pointed to additional losses in Asia.

Cryptocurrencies mirrored this downturn, with Bitcoin falling 5.8% to $76,838 and Ethereum down 11.5% to $1,795 over the previous 24 hours. Both digital assets have seen substantial declines over the past 30 days, with Bitcoin falling 19% and Ethereum down 29%. The uncertainty surrounding capital flows and monetary policy has continued to put pressure on risk assets, including cryptocurrencies.

Despite these challenges, there are signs of potential relief for the crypto market. President Donald Trump is preparing to sign an executive order aimed at reversing anti-crypto banking policies put in place during the Biden administration. This order is expected to roll back initiatives tied to “Operation Chokepoint 2.0,” a controversial banking restriction that allegedly targeted crypto firms. The order may also include directives on stablecoin classification and Federal Reserve banking policies, reinforcing the White House’s pro-crypto stance.

Investors are now focused on Wednesday’s Consumer Price Index (CPI) report, which is expected to show a 0.3% rise in February prices, cooling from January’s 0.5% gain. The year-over-year CPI is projected at 2.9%, slightly below January’s 3%, while core inflation is forecast to remain at 3.2%. Any upside surprise in the CPI report could reinforce expectations that the Federal Reserve will delay rate cuts, further weighing on risk assets, including equities and crypto.

While the M2 money supply expanded in 2024 and has remained flat this year, uncertainty over the Fed’s next moves and tightening financial conditions have kept risk assets at bay. The Fed’s balance sheet has continued to shrink, falling to $6.757 trillion from April 2022’s near $9 trillion,