TLDR:

• US Q4 GDP grew just 1.4%, well below expectations, signaling economic weakness for investors.
• PCE and Core PCE inflation readings exceeded forecasts, raising concerns over rising consumer costs.
• Slower growth and higher prices may pressure crypto trading liquidity and market volatility.
• Geopolitical risks with Iran add uncertainty to energy markets, indirectly affecting crypto sentiment.

The US economy recorded a sharp slowdown in Q4 GDP, hitting 1.4%, far below the expected 3% growth. Inflation measures, including the PCE Price Index and Core PCE, exceeded forecasts, signaling rising costs for consumers. 

Investors are weighing the potential impact on markets, including crypto trading, amid economic uncertainty. The combination of slowing growth and rising prices presents challenges for monetary policy and market stability.

US Economic Data Raises Crypto Market Tensions

US GDP growth for the fourth quarter is among the weakest in two years, according to data reported by Crypto Rover. The slowdown coincides with inflation readings above expectations, signaling higher consumer prices across goods and services. 

Rising costs may pressure disposable incomes, affecting investor liquidity available for speculative markets, including cryptocurrencies. Traders are monitoring these economic indicators closely to adjust exposure in volatile markets.

The PCE Price Index, a preferred measure of inflation, showed significant gains in January, exceeding projections. Core PCE, which strips out food and energy, also rose, pointing to persistent underlying inflation pressures. 

These dynamics place pressure on the Federal Reserve to balance policy between easing and hawkish measures. Market participants are assessing potential scenarios for interest rates and liquidity conditions affecting crypto valuations.

Investor sentiment in crypto markets is increasingly tied to US economic data, as both liquidity and risk appetite respond to macroeconomic shifts. Slower growth may prompt caution, leading to reduced trading volumes and heightened price volatility. 

Rising inflation could push the Fed to maintain tighter policies, which historically compresses speculative asset markets. Analysts note that cryptocurrency traders remain sensitive to macroeconomic policy moves, particularly in the US dollar context.

Trading platforms reported increased activity during the GDP announcement, reflecting rapid adjustments in portfolio allocations. Exchanges including Coinbase and Binance saw heightened volumes in BTC and ETH as investors reacted to the news. 

Market participants are factoring in the dual pressure of slow growth and inflation for near-term trading strategies. Liquidity in smaller altcoins may experience higher volatility as attention focuses on macro-sensitive tokens.

Geopolitical Tensions Add Pressure to Crypto Markets

Tensions in the Middle East, particularly regarding US military planning toward Iran, are influencing global markets, including cryptocurrencies. Reports from Walter Bloomberg indicate potential US strikes targeting Iran’s leadership and nuclear facilities. 

Any conflict could disrupt oil supply routes, indirectly affecting global liquidity and risk appetite in crypto markets. Investors are tracking developments closely for potential market-moving events.

The potential for limited US military action, including naval and air assets, raises uncertainty for energy markets. Tehran has warned of a decisive response if targeted, increasing the risk of regional escalation. 

Crypto traders are considering these geopolitical factors alongside domestic economic data in portfolio strategies. Rising energy costs could feed into inflation expectations, further complicating monetary policy outlooks.

Regional instability coincides with macroeconomic pressures, potentially amplifying market volatility in digital assets. Traders are adjusting exposure in real time, particularly in stablecoins and BTC, seeking safe-haven positions. 

Historical patterns show crypto markets react quickly to both economic and geopolitical shocks. Analysts suggest monitoring these developments closely to anticipate liquidity shifts and trading trends.

After Polymarket quietly ended a substantial penalty on liquidity-removing ‘taker’ orders, quantitative traders (quants) lamented an end to their gravy train. For highly sophisticated market makers, that 500-millisecond quote-adjustment period granted them a superpower over slower traders.

Unfortunately for them, Polymarket has ended its time incentive.

Unsurprisingly, the money spigot used to flow from Polymarket and Kalshi advertising short-term binary options on the price of bitcoin (BTC) to everyday speculators.

A new fourth quarter 2025 survey from tokenization platform Brickken suggests that the majority of real-world asset (RWA) issuers are using tokenization to raise capital rather than to unlock secondary market liquidity, according to a report shared with CoinDesk.

Among respondents, 53.8% said capital formation and fundraising efficiency is their main reason for tokenizing, while 15.4% said the need for liquidity was their main incentive. Another 38.4% said liquidity was not needed, while 46.2% said they expect secondary market liquidity within six to 12 months.

“What we’re seeing is a shift away from tokenization as a buzzword and toward tokenization as a financial infrastructure layer,” Jordi Esturi, CMO at Brickken, told CoinDesk. “Issuers are using it to solve real problems: capital access, investor reach, and operational complexity.”

Brickken’s report comes as major U.S. stock exchanges announce plans to expand trading models for tokenized assets, including 24/7 markets. CME Group said they will offer around-the-clock trading for its crypto derivatives by May 29, while the New York Stock Exchange (NYSE) and Nasdaq shared their plans to offer 24/7 tokenized stock trading.

Esturi said the exchanges’ plans have more to do with business model evolution than with an issuer demand disconnect. “It’s less about getting ahead of demand and more about exchanges evolving their business model,” he said. “Exchanges increase revenue by increasing trading volume, and extending trading hours is a natural lever.”

At the same time, many issuers are still in what he described as the phase of validation, during which they prove regulatory structures, test investor appetite and digitize issuance processes. “Liquidity is not yet their primary focus because they are building foundations,” he emphasized, adding that they view tokenization as “the upstream engine that feeds trading venues.”

The Brickken CMO also said that without compliant, structured, high-quality assets entering the market, secondary trading platforms have nothing meaningful to trade. “The true value creation happens at the issuance layer,” Esturi noted.

Optional liquidity versus mandatory

While 38.4% of surveyed issuers said liquidity was not required, Esturi pointed out the difference between “optional liquidity and mandatory liquidity,” noting that many private market issuers operate on long-term horizons. “Liquidity is inevitable, but it must scale in parallel with issuance volume and institutional adoption, not ahead of it.”

Ondo, which began with tokenized U.S. Treasuries and now has more than $2 billion in assets, is focused on stocks and ETFs specifically because of their “strong price discovery, deep liquidity and clear valuation,” Chief Strategy Officer Ian de Bode said in a recent interview with CoinDesk.

“You tokenize something either to make it easier to access or to use it as collateral,” de Bode said. “Stocks fit both, and they price like assets people actually understand, unlike a building in Manhattan. If TradFi moves to 24/7, that’s a godsend,” de Bode added. “It’s our biggest bottleneck.”

The survey shows that tokenization is already operational for many participants: 69.2% of respondents reported completing the tokenization process and being live, 23.1% are in progress, and 7.7% are still in the planning phase.

Regulations are still an issue

Regulation is a major concern among those surveyed: 53.8% of respondents said regulation slowed their operations, while 30.8% reported partial or contextual regulatory friction. In total, 84.6% experienced some level of regulatory drag. By comparison, 13% cited technology or development challenges as the hardest part of tokenization.

“Compliance isn’t something issuers are dealing with after launch; it’s something they’re taking into account and configuring from day one,” said Alvaro Garrido, founding partner at Legal Node. “We see an increasing demand for legal structures tailored to the specific project needs and underlying technology.”

The report also suggests tokenization is expanding beyond real estate. Real estate accounted for 10.7% of assets tokenized or planned for tokenization, compared with 28.6% for equity/shares and 17.9% for IP and entertainment-related assets. Respondents spanned sectors including technology platforms (31.6%), entertainment (15.8%), private credit (15.8%), renewable energy (5.3%), banking (5.3%), carbon assets (5.2%), aerospace (5.3%) and hospitality (5.2%).

“The real bridge between TradFi and DeFi is not ideological,” said Patrick Hennes, head of digital asset servicing at DZ PRIVATBANK. “It is issuance infrastructure that translates regulatory requirements, investor protection and asset servicing standards into programmable systems.”

The probability of the Clarity Act being signed into law in 2026 surged to a record 82% on Polymarket earlier today.

The increase in odds comes ahead of a looming deadline to move the key crypto legislation forward.

Polymarket Signals Growing Confidence in Clarity Act as Negotiations Accelerate 

Data from Polymarket shows that the probability of the Clarity Act becoming law rose sharply over the past 48 hours. Odds climbed from around 60% on February 18 to a peak of 82% earlier today. 

At press time, the figure had eased to 78%, still reflecting a significant jump and signaling growing market confidence in the bill’s prospects.

The optimism is not limited to prediction market traders. Industry executives are also projecting strong momentum. 

In an interview with Fox Business, Ripple CEO Brad Garlinghouse said there’s a 90% chance that the long-debated Clarity Act will pass by the end of April.

“The White House is pushing hard on this, and that is a big reason why it will get done. It needs to get done for US leadership,” he said.

In a landmark 6–3 decision, the Supreme Court of the United States has ruled that President Donald Trump’s sweeping global tariffs were illegal, delivering a sharp blow to one of the White House’s core economic policies.

The decision immediately lifted risk appetite across financial markets — including crypto — though traders remain cautious about what comes next.

Selling pressure in US-listed spot Bitcoin ETFs continued Thursday, with analysts noting the cryptocurrency is on track for one of its worst yearly starts.

Spot Bitcoin (BTC) ETFs saw $165.8 million in outflows Thursday, bringing weekly losses to $403.9 million, according to SoSoValue data.

The redemptions moved the funds closer to a possible five-week outflow streak, with year-to-date (YTD) losses totaling $2.7 billion.

Trading activity continued to shrink, falling 21% over the week and reaching its lowest levels since late December, signaling weakening investor activity.

Despite $53.9 billion in cumulative net inflows, analysts, including DropsTab, noted that 2026 is shaping up to be “one of the worst yearly starts in Bitcoin’s history,” with BTC prices down about 22% year-to-date, according to TradingView data.

BlackRock’s IBIT leads losses with $368 million in outflows this week

BlackRock’s iShares Bitcoin Trust ETF (IBIT) accounted for the bulk of outflows this week, totaling $368 million, according to Farside data.

Other US-listed spot Bitcoin ETFs saw little or no activity this week, aside from about $50 million in outflows from the Fidelity Wise Origin Bitcoin Fund (FBTC) on Wednesday.

Some major financial institutions reported reducing IBIT exposure earlier this week, with Brevan Howard cutting its holding in the fund by as much as 85% in the fourth quarter of 2025.

Bitcoin set for one of its worst yearly starts

The ongoing outflows from Bitcoin ETFs coincide with weakening investor sentiment, as multiple sources point to unusually low BTC price levels compared to previous cycles.

Drops Analytics highlighted Bitcoin’s price in the context of halving — an event that reduces BTC’s block reward once every four years and is typically followed by price surges in the years that follow.

“Almost two years later, BTC trades around $66,000 — nearly the same level as during the April 2024 halving,” Drops Analytics said in a Telegram post on Thursday.

Related: Quantum fears aren’t behind Bitcoin’s 46% drop, says developer

“This has never happened before. In previous cycles, BTC was already three to 10 times above halving levels by now,” it added.

According to Checkonchain data, Bitcoin is off to its worst yearly start on record, 50 days into 2026, surpassing previous down years, including 2018.

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