Market Volatility: The "January Rout"
The crypto market experienced a dramatic shakeup on January 30, with Bitcoin (BTC) plunging roughly 6.3% in 24 hours to settle near $82,500. This move triggered a massive wave of liquidations, with over $1.8 billion in crypto derivatives wiped out.
Why is this happening?
Fed Uncertainty: The nomination of Kevin Warsh as Federal Reserve Chair has sparked "risk-off" sentiment, with investors bracing for potential shifts in monetary policy.
ETF Outflows: Institutional investors have shifted toward a more cautious stance, resulting in notable outflows from spot Bitcoin ETFs.
Geopolitical Tensions: Ongoing global conflicts continue to push capital into the US dollar, often at the expense of digital assets.
2. Regulatory Landmark: "Project Crypto"
In a historic shift toward clarity, the SEC and CFTC held a joint event on January 29, 2026, to announce Project Crypto. This initiative aims to end years of jurisdictional infighting and "democratize" digital assets in the US.
Unified Taxonomy: The agencies are working on a clear asset taxonomy to define exactly what is a security vs. a commodity.
Onshore Derivatives: New rules are being drafted to allow for onshore perpetual derivatives and retail leveraged trading.
Prediction Markets: The CFTC has withdrawn previous proposals that sought to ban political and sports-related event contracts, signaling a greener light for platforms like Polymarket.