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Stocks and crypto markets on edge as US inflation cools, Trump eyes steel tariff cuts

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Stocks and crypto markets on edge as US inflation cools, Trump eyes steel tariff cuts

The stock and crypto markets remained on edge today, February 13, as participants reacted to the latest US consumer inflation report, which continued moving downwards in January.

Summary

  • The stock and crypto markets retreated after the US published the latest US consumer inflation report.
  • Data by the Bureau of Labor Statistics showed that the headline Consumer Price Index fell to 2.4%.
  • Core inflation, which excludes the volatile food and energy prices, fell to 2.5%.

US stock indices retreated, with the futures tied to the Dow Jones. Nasdaq 100, and S&P 500 falling by over 35 basis points, continuing a trend that has continued on Thursday.

Similarly, crypto prices like Bitcoin (BTC) dropped to $66,000, while top altcoins like LayerZero (ZRO), Canton, Internet Computer, Uniswap, and Kaspa dropped by over 5% in the last 24 hours. The market capitalization of all tokens dropped to $2.29 trillion.

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US consumer inflation retreated in January 

A report released by the Bureau of Labor Statistics showed that the headline Consumer Price Index retreated from 2.7% in December to 2.4% in January, the lowest level in months. It retreated from 0.3% in December to 0.2% on a MoM basis.

The report showed that the core inflation, which excludes the volatile food and energy prices, dropped to 2.5% from the previous 2.6%. These numbers mean that US inflation has not surged as during President Donald Trump’s tariffs as most economists were expecting.

The report came a few hours after the Financial Times reported that Trump’s administration was considering tweaking his massive steel and aluminum tariffs, a move that will lead to lower prices in the long term  

The data came two days after the BLS released strong non-farm payrolls data, which showed that the economy created 130k jobs in January, while the unemployment rate slipped to 4.3%. 

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Still, it is unclear whether the Federal Reserve will cut interest rates more times this year, even as inflation retreats. A Polymarket poll has the odds of no cuts in March at 93%. Another poll estimates that there will be just two cuts this year.

Stocks and crypto markets do well in periods of low interest rate 

In theory, the stock and crypto markets do well when the Fed is cutting interest rates. A good example of this happened during the COVID-19 pandemic when these assets jumped as the Fed slashed rates to zero.

The assets then plunged in 2022, with Bitcoin moving below $16,000, as the Fed hiked interest rates to combat the elevated inflation.

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However, the current Federal Reserve cycle has happened amid a divergence in the two assets. The stock market has soared to a record high, while Bitcoin and most altcoins are stuck in a bear market.

One reason for this is that the market has had some major moving parts in the past few months. The stock market has been driven be the ongoing AI boom, while the crypto market crash has happened because of the elevated risks, including on Iran. 

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Ethereum Economic Zone launches at EthCC to tackle L2 ‘fragmentation problem’

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What wiped out $1.7 billion?

Summary

  • Gnosis, Zisk and the Ethereum Foundation unveiled the Ethereum Economic Zone (EEZ) at EthCC in Cannes to unify fragmented Ethereum layer-2 networks.
  • The framework targets over 20 L2s securing roughly $40 billion in value, enabling synchronous composability without relying on bridges and standardizing ETH as gas.
  • Early backers include Aave and Centrifuge, with developers calling EEZ a “new era” for on-chain applications as Ethereum grapples with slowing fee revenue and a weaker deflationary narrative.

The Ethereum (ETH) ecosystem took aim at one of its biggest structural weaknesses at EthCC 2026, as Gnosis, Zisk and the Ethereum Foundation publicly launched the Ethereum Economic Zone (EEZ), a rollup framework designed to knit together an increasingly fractured layer‑2 landscape. Revealed on March 29 at the Palais des Festivals in Cannes, the initiative seeks to make dozens of Ethereum L2s behave “like one unified system,” in the words of project backers, by restoring synchronous composability between rollups and Ethereum mainnet while keeping security anchored to the base chain.

Ethereum Economic Zone launches

More than 20 operational Ethereum L2s currently secure about $40 billion in assets, yet function largely as isolated ecosystems, each with its own liquidity pools, deployments and bridge infrastructure. “Ethereum doesn’t have a scaling problem. It has a fragmentation problem,” Gnosis co‑founder Friederike Ernst said in comments shared with crypto media, arguing that “every new L2 that goes live has its own liquidity pool and bridging, creating another isolated walled garden.” The EEZ framework instead allows smart contracts on participating rollups to perform synchronous calls with each other and with Ethereum mainnet in a single atomic transaction, using ETH as the default gas token and removing the need for separate bridge protocols.

At EthCC, Ernst and Zisk developer Jordi Baylina presented the EEZ as an explicitly Ethereum‑aligned answer to the user‑experience and capital‑efficiency frictions created by the network’s L2‑centric scaling roadmap. According to coverage from outlets such as The Block and CoinDesk, the collaboration is co‑funded by the Ethereum Foundation and launches with Aave, Centrifuge and a Swiss‑based EEZ Alliance among its early partners, underscoring that DeFi blue chips see value in shared liquidity and cross‑rollup settlement. “The zone will facilitate a new era of blockchain innovation,” Zisk’s CEO Maria Roberts told conference attendees, adding that developers will be able to plug existing applications into the framework “pretty easily.”

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The timing is not accidental. Ethereum’s shift of activity toward cheaper L2s has reduced fee revenue on mainnet and softened the narrative of ether as a strongly deflationary asset, with ETH trading near $2,000 even as the network still secures roughly $53 billion in DeFi total value locked and about $163 billion in stablecoins, according to recent market data cited by Phemex. By unifying L2 liquidity and simplifying cross‑network flows, EEZ’s architects are betting that a more cohesive Ethereum stack can keep capital and users inside the ecosystem, even as competing smart contract platforms and modular architectures fight for market share.

Kaiko reports Alameda gap still existsIn separate reporting on EthCC, organizers have described 2026 as “the year of professionalisation of Ethereum and the wider crypto ecosystem,” with the conference’s move to Cannes and the launch of institutional‑focused forums like Kaiko’s Agora strengthening the sense that Ethereum’s next phase will be defined as much by market structure and infrastructure as by new token launches.

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CFTC Chair Says Agency is Ready to Oversee Entire Crypto Market

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CFTC Chair Says Agency is Ready to Oversee Entire Crypto Market

Michael Selig, US President Donald Trump’s nominee leading the Commodity Futures Trading Commission (CFTC), said the agency was prepared to oversee the entire $3 trillion crypto industry, with no timeline for Congress to pass a crucial market structure bill.

In a Wednesday statement about his first 100 days as CFTC chair, Selig said that the commission was “ready to take responsibility” for the crypto market and reiterated his claim that it was the sole regulator to oversee prediction markets.

His comments come as the US Senate considers the CLARITY Act, a crypto market structure bill that has been effectively stalled in committee amid discussions over stablecoin yield and other issues.

“The same regulatory clarity being delivered to the crypto industry is being developed for prediction markets, which can serve as powerful tools for information discovery and are regulated by the CFTC under the Commodity Exchange Act,” said Selig.

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Under Selig, who was confirmed by the Senate in December, the CFTC has adopted many policies signaling that the agency would soften its enforcement and regulation of digital assets compared to previous administrations. In March, the agency announced a memorandum of understanding with the Securities and Exchange Commission (SEC) as part of efforts to coordinate on regulation, including digital assets.

Related: Crypto exchange KuCoin agrees to $500K settlement, ending CFTC case

Although early drafts of the market structure bill suggested the legislation could give the CFTC additional authority to oversee digital assets, the SEC is expected to continue regulating cryptocurrencies it considers to be securities.

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Lawmakers pressing CFTC on insider trading claims over prediction markets

US state authorities and federal lawmakers have been targeting prediction market platforms like Kalshi and Polymarket over alleged violations of gaming laws and claims of politicians using insider information to profit.

While many of the state-level actions continue to be litigated in court, Selig has claimed that the CFTC has “exclusive jurisdiction” over prediction markets and threatened legal action against any challenges to its authority.

In a Tuesday event, CFTC enforcement director David Miller said that the agency’s position was that event contracts on prediction markets were not “gaming” but rather “swaps” that fall under its purview.

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Some lawmakers have also proposed legislation to ban elected officials with insider information from profiting from event contracts after suspicious trades on military actions involving Iran and Venezuela.

Magazine: A newbie’s guide to surviving crypto winter