White House Crypto Meeting: A Stalemate That Doesn't Move the Market

The White House meeting on February 10 ended without a compromise, leaving the key dispute over stablecoin rewards unresolved. While both sides described the session as "constructive," fundamental disagreements that had stalled landmark legislation remained. The clash centers on whether the bill should prohibit banks from paying interest on deposits, a practice crypto firms say is essential for customer recruitment and that banks fear would destabilize their core funding source.

This regulatory stalemate has not moved the market. Bitcoin's price has fallen 30% year-to-date, representing a market cap loss of roughly $400 billion from its October highs. The sharp decline shows institutional liquidity is being pulled by geopolitical risk and macroeconomic rotation, not by the promise of regulatory clarity from Washington.

The disconnect is clear. Even as the White House schedules a second meeting to push for proposed language changes, the market has priced in a continuation of uncertainty. For now, the lack of a deal is a non-event for price action, as broader financial forces dominate the flow of capital.

The Real Liquidity Test: ETF Flows vs. Price

The market's real test is institutional demand, and the latest data shows a potential shift. U.S. spot Bitcoin ETFs saw back-to-back inflows of $616 million last week, a first in nearly a month. This marks a clear break from the sustained selling that had drained billions, offering a tangible signal of stabilizing interest.

Despite a brutal 50% price drawdown from October highs, the underlying commitment remains strong. Total BTC held in these funds has only dipped 6% from its peak. The slowing pace of outflows, even amid severe price pressure, is a key technical signal for a potential trend reversal.

The bottom line is that institutional liquidity is finding a floor. While the ETFs haven't yet recouped all their losses, the shift from heavy selling to consecutive inflows suggests a stabilization point has been reached. For now, this flow resilience is a critical counterweight to the broader market's volatility.

Catalysts and Risks: Policy vs. Price

The next major catalyst is the Feb. 17 release of the Crypto Policy Tracker. This report will show if the White House's push for new language yields tangible progress. The scheduled second meeting last week was a procedural step; the Tracker's findings will be the first concrete data point on whether stakeholders are moving toward compromise.

A key risk is that continued regulatory uncertainty stifles innovation and capital formation. The Working Group's report frames crypto as a core American innovation story, but policy paralysis threatens to undermine that promise. Without clarity, the medium-term outlook for capital investment in the sector faces pressure.

The market's forward view hinges on institutional conviction. Watch for whether the recent ETF inflows can accelerate as price stabilizes. The current $616 million in back-to-back inflows is a positive signal, but it must sustain and grow to offset the $1.9 billion in redemptions year-to-date. This flow resilience is the direct test of whether institutional demand has found a durable floor.