March 18th, 2025

Tariffs, Fed moves, and crypto: Navigating a volatile March 2025

As I unpack the current state of the cryptocurrency market, particularly with Bitcoin edging higher to US$84,000 and analysts issuing warnings of potential downturns, it’s clear that we’re navigating a fascinating yet turbulent moment in financial history.

The crypto markets rose modestly alongside US equities on Monday, with the CoinDesk 20 index climbing 2.4 per cent over the past 24 hours. Bitcoin, the bellwether of the crypto world, is trading at around US$84,000 as of today, March 18, 2025. This uptick feels like a brief sigh of relief after a rollercoaster ride, but the warnings from analysts like Joel Kruger at LMAX keep me grounded.

Kruger suggests that a sustained correction in US equities could drag Bitcoin back down to its March 2024 peak range of US$73,000 to US$74,000. It’s a sobering thought—while the market is showing some resilience, the broader economic currents could easily pull it under.

Let’s go a bit deeper.

The interplay between crypto and traditional markets has grown increasingly pronounced over the years. Bitcoin’s modest gains this week align with a pickup in global risk sentiment, buoyed by US retail sales data that, while softer than expected on the headline figure, showed strength in control group sales. This suggests a slowdown rather than a full-blown recession, which is music to the ears of investors who’ve been jittery about the health of the US consumer.

The MSCI US index advanced 0.7 per cent, with sectors like Real Estate and Energy leading the charge. Meanwhile, the yield on the 10-year US Treasury note dipped slightly to 4.30 per cent, and the Dollar Index weakened by 0.3 per cent. These are subtle shifts, but they paint a picture of a market that’s cautiously optimistic, yet still bracing for what the Federal Reserve might do next.

Markets fully expect the Fed to hold interest rates steady this week, and there’s chatter that policymakers might even pause the balance sheet runoff—a move that could inject some liquidity back into the system and potentially support risk assets like Bitcoin.

But here’s where I start to feel a bit uneasy. Even with these positive signals, the crypto market isn’t out of the woods. Kruger’s warning about a potential leg down for Bitcoin isn’t just idle speculation—it’s rooted in the historical correlation between equities and crypto during periods of uncertainty.

If US stocks falter, Bitcoin could lose its footing, retreating to that US$73,000-US$74,000 range. And it’s not just Bitcoin feeling the heat. Ethereum, the second-largest cryptocurrency by market cap, is facing its own challenges. Standard Chartered recently slashed its 2025 price target for Ether by a whopping 60 per cent, dropping it from US$10,000 to US$4,000.

That’s a dramatic revision, and it reflects a growing skepticism about Ethereum’s near-term prospects. As of March 15, Ether was trading at US$1,937.39—well below its late 2021 peak of US$4,400. Compare that to its heyday when a digital art piece sold for 38,000 ETH (equivalent to US$69.3 million) as the world’s most expensive NFT, and you can see how far the mood has shifted.

Ethereum’s price history offers some context here. Back in 2021, it rode a wave of excitement fuelled by technological advancements like the Berlin update and the anticipation of the Ethereum Merge, which eventually rolled out in 2022. These upgrades promised lower transaction fees (or “gas prices”) and a shift to a more energy-efficient proof-of-stake system, sparking a rally that set it apart from Bitcoin’s Coinbase-IPO-driven surge.

But the collapse of FTX in late 2022 was a gut punch to the entire crypto ecosystem, and Ethereum wasn’t spared. Its ties to Decentralised Finance (DeFi)—the blockchain-based financial ecosystem that it powers—mean its fate is intertwined with the health of that sector.

DeFi has been a game-changer, cutting out intermediaries with tools like Uniswap, Maker, and Compound, but it’s also been a volatile space prone to hype and crashes. If DeFi struggles, Ethereum feels the ripple effects, and right now, the US$4,000 price target from Standard Chartered suggests a lack of confidence in a robust recovery anytime soon.

Shifting gears to the broader economic landscape, there’s a lot to unpack. Global risk sentiment is picking up, and that’s partly thanks to US retail sales data easing fears of a consumer collapse. Gold is testing the US$3,000 per ounce mark, though it pulled back slightly after the OECD downgraded its global growth forecasts, citing the impact of looming US tariffs under President Trump.

Speaking of which, Trump’s reminder that broad reciprocal tariffs—and additional sector-specific ones—will kick in on April 2, 2025, is keeping markets on edge. Brent crude oil settled at US$71 per barrel amid supply disruption risks in Yemen, adding another layer of geopolitical tension to the mix.

Over in Asia, China’s economic data for January and February 2025 beat expectations, with industrial production, retail sales, and urban fixed asset investment all showing strength. The People’s Bank of China (PBOC) is also rolling out measures to boost consumption, which could bolster their aggressive five per cent GDP growth target for the year. These developments suggest a two-speed global economy—one where Asia might be finding its footing while the US grapples with tariff uncertainty.

Back to crypto, there’s more news stirring the pot. South Korea’s central bank has ruled out holding Bitcoin as a reserve asset, a decision that dashes hopes of institutional adoption in that corner of the world. Meanwhile, the US Securities and Exchange Commission (SEC) is in flux—acting Chair Mark Uyeda has directed staff to reconsider a proposed crypto rule change for the second time this month. It’s unclear what this means for the regulatory landscape, but it signals ongoing uncertainty that could keep investors cautious.

For me, this all adds up to a market that’s caught in a tug-of-war between optimism and caution. Bitcoin at US$84,000 feels like a tentative step forward, but the warnings of a pullback to US$73,000-US$74,000 loom large. Ethereum’s struggles, underscored by Standard Chartered’s bearish outlook, highlight the unique challenges facing altcoins in this environment.

I think we’re in a holding pattern. Bitcoin’s current bounce is encouraging, and the alignment with US equities suggests it’s still got some wind in its sails. But Kruger’s caution about a potential correction tied to stock market weakness feels all too plausible—especially with Trump’s tariffs on the horizon and the Fed’s next moves still up in the air.

Ethereum, meanwhile, is at a crossroads. Its price might not plummet to 2022 lows, but the US$4,000 target for 2025 reflects a market that’s lost some of its earlier fervor. DeFi could be the wildcard—if it regains momentum, Ethereum might surprise us yet.

“For now, though, I’d approach both Bitcoin and Ether with a mix of hope and skepticism. The data tells me there’s room for growth, but the risks—economic, regulatory, and geopolitical—are impossible to ignore.”– Anndy Lian

I’ll keep digging into the numbers and the narratives, because in a market this dynamic, the story’s far from over.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

Source: https://e27.co/tariffs-fed-moves-and-crypto-navigating-a-volatile-march-2025-20250318/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

March 18th, 2025

Balancing the scales: Why Crypto and AI both need urgent oversight

Technology has a way of moving faster than the rules meant to govern it, and nowhere is this more evident than in the parallel rise of cryptocurrency and artificial intelligence (AI). As someone who has spent years reporting on the intersection of innovation, finance, and policy, I’ve seen firsthand how these two forces have reshaped the global landscape. For a long time, I was convinced that cryptocurrency was the most pressing issue regulators needed to tackle. Its decentralized nature, its potential for misuse, and its volatile markets seemed to demand immediate action. But as AI has surged forward—especially with the recent emergence of AI agents capable of making independent decisions—my perspective has shifted.

Both crypto and AI are moving at breakneck speed, and both need urgent attention. However, if I had to prioritise, I’d argue that AI now poses the greater challenge. Its ability to influence critical processes, blur ethical lines, and even disrupt the crypto sector itself makes it a more complex and immediate concern. We’re in a regulatory race, and the consequences of falling behind could be profound.

Need for crypto regulation hasn’t diminished

Let’s start with cryptocurrency, which has long been a lightning rod for debate. When Bitcoin first gained traction over a decade ago, it was hailed as a revolutionary alternative to traditional finance, but it also raised red flags for regulators. The anonymity of blockchain transactions, the wild price swings, and the potential for cryptocurrencies to be used in illegal activities like money laundering made it a regulatory nightmare. I remember the frenzy of 2017, when Initial Coin Offerings (ICOs) were popping up everywhere, raising billions of dollars with little to no oversight. It was a wake-up call for governments and financial watchdogs. The Financial Action Task Force (FATF) stepped in with guidelines to curb illicit uses of crypto, and countries like the U.S. and those in the European Union started working on laws to regulate exchanges and wallet providers. Yet, even now, the global regulatory landscape for crypto remains uneven. Based on what I have seen, I believe that only about half of the jurisdictions surveyed had robust crypto regulations in place, leaving plenty of room for risks to fester.

The need for crypto regulation hasn’t diminished. With the total market value of cryptocurrencies hitting $3.1 trillion in early February 2025, according to CoinMarketCap, digital assets are no longer a niche interest—they’re a significant part of the financial ecosystem. The rise of decentralised finance (DeFi), where users can lend, borrow, and trade without traditional intermediaries, has only added to the complexity. These platforms are innovative, no doubt, but they often operate in a murky legal space, with little protection for users if things go wrong. The collapse of FTX in 2022, which wiped out $8 billion in investor funds, was a stark reminder of what can happen when oversight fails to keep pace with innovation.

And while regulators like the U.S. Securities and Exchange Commission (SEC) and the European Securities and Markets Authority (ESMA) have started cracking down, the global patchwork of rules still leaves too many gaps. In my course of advisory work, the feedback I got was that many cross-border crypto transactions happen in regions with weak or no regulations, raising the stakes for financial stability and crime prevention.

The rapid ascent of AI agents

But as significant as these issues are, they’ve been overshadowed by the rapid ascent of AI. When I first started covering AI, it was mostly seen as a tool for improving efficiency—think predictive analytics or targeted advertising. That’s changed dramatically in just a few years. Today’s AI systems, especially generative models like GPT-4 and autonomous AI agents, aren’t just tools; they’re decision-makers. In finance, for example, AI is now managing portfolios, executing trades, and even approving loans, tasks that used to require human expertise. Based on my opinion and how fast AI is being adopted, AI could handle up to 30% or even 40% of all financial transactions by 2030. That’s a massive shift, and it raises serious questions about accountability and risk. Who is responsible when an AI agent makes a bad call? How do we ensure these systems are transparent and fair? And what happens when they make decisions at a scale and speed humans can’t easily oversee?

The financial sector isn’t the only area feeling the impact of AI’s rapid growth, but it’s a prime example of the challenges we face. AI agents are now deeply embedded in trading, using vast amounts of data to spot trends and make split-second decisions. This has raised concerns about market stability. The European Central Bank (ECB) cautioned in 2024 that AI-driven trading could lead to sudden market crashes if algorithms converge on the same strategies or amplify volatility. And when you bring AI into the crypto world, the risks multiply. AI is already being used to optimise trading strategies, detect fraud, and even govern decentralised organizations. But as a recent social media post pointed out, the use of AI in crypto smart contracts could open the door to exploitation if these systems aren’t carefully designed. Regulators are only beginning to grapple with these issues, and the pace of change isn’t slowing down.

Our regulatory systems are struggling to keep up

Another area where AI poses unique challenges is intellectual property. Generative AI can produce content—text, images, music—in seconds, but who owns the result? In finance, AI-generated reports and analyses are becoming standard, but the legal status of that content is far from clear. There are cases where AI developers are using copyrighted financial data to train models, and the cases are still unresolved. I did a survey in my private group consisting of business owners and more than 70% of them who were using AI for content creation were unsure about the legal implications. This uncertainty is even more pronounced in crypto, where AI-generated content is often used to promote new tokens or sway market sentiment, sometimes without any disclosure of AI involvement. These gray areas aren’t just legal headaches; they’re potential breeding grounds for abuse.

Looking at the current state of play, it’s clear to me that our regulatory systems are struggling to keep up. Crypto regulation has made some progress—think of the EU’s Markets in Crypto-Assets (MiCA) framework or the SEC’s efforts to classify certain tokens as securities—but it’s still a fragmented effort. AI regulation, on the other hand, is even further behind. The EU’s AI Act, passed in 2024, is a step in the right direction, categorising AI systems by risk level and setting stricter rules for high-risk applications. But even this groundbreaking law has been criticised for not fully addressing the global nature of AI development or the specific challenges posed by AI agents.

AI needs to take precedence

So, where should regulators focus their energy? In my view, AI needs to take precedence, not because crypto’s challenges are insignificant, but because AI’s implications are broader and more profound. Crypto’s risks—volatility, fraud, regulatory gaps—are serious, but they’re largely confined to finance. AI, by contrast, has the potential to reshape every facet of society, from healthcare to education to governance. Its ability to amplify risks within crypto, such as through AI-driven trading bots or flawed smart contracts, only underscores the need for a comprehensive approach.

This isn’t to say crypto should be ignored. The lessons we’ve learned from trying to regulate digital assets—such as the need for consumer protections and international cooperation—can and should inform AI regulation. But AI’s unique challenges, from ethical concerns to systemic risks, demand a level of urgency and innovation that we haven’t yet seen. Regulators need to act quickly, establishing clear rules for AI-driven decision-making and ensuring these systems are transparent and accountable. This will require not just technical expertise but also collaboration across borders and sectors. Initiatives like the UK Financial Conduct Authority’s Digital Sandbox, which uses synthetic data to test AI applications, are a good start, but they need to be scaled up and adopted globally.

Ultimately, the regulatory race between crypto and AI isn’t about choosing one over the other; it’s about recognising the unique risks each poses and responding accordingly. Both are transformative technologies with the power to reshape our world, for better or worse. But as AI continues to accelerate, its potential to disrupt decision-making, challenge ethical norms, and even destabilise systems like crypto makes it the more immediate priority. We can’t afford to wait. The future of finance, technology, and society depends on getting this right, and the clock is ticking.

Source: https://ciosea.economictimes.indiatimes.com/blog/balancing-the-scales-why-crypto-and-ai-both-need-urgent-oversight/118572627

Anndy Lian

www.anndy.com

j j j

March 17th, 2025

Europe rises, Asia watches, Bitcoin sideways and gold shines: A world on edge

The recent rebound in risk sentiment and the relief rally in US markets, spurred by the easing of fears surrounding a potential government shutdown. The developments over the past few days paint a fascinating, albeit complex, picture of an interconnected global financial system grappling with uncertainty, inflationary pressures, and shifting geopolitical dynamics.

Let’s dive into the details and unpack what this all means, both for the immediate future and the broader economic landscape.

The S&P 500’s 2.1 per cent surge last Friday was a welcome reprieve after it closed in a technical recession the previous day—a term that, while not officially signalling a full-blown economic downturn, certainly rattled investors. The rally was broad-based, with most sectors finishing in positive territory, reflecting a collective sigh of relief that a government shutdown, which could have paralysed federal operations and dented market confidence, appears to have been averted, at least for now. This kind of market behaviour is classic: when a looming threat dissipates, investors pile back in, eager to capitalise on discounted stocks.

Yet, beneath this optimism lies a more troubling undercurrent—US consumer sentiment has plummeted to its lowest level in over two years. The preliminary March sentiment index dropped to 57.9, a stark indicator that everyday Americans are growing increasingly anxious about the economy. This apprehension isn’t unfounded.

With tariffs looming as a potential disruptor, consumers are bracing for higher prices, a fear underscored by their expectation that inflation will climb to 3.9 per cent annually over the next five to ten years. That’s a significant jump from last month’s 3.5 per cent and the highest long-term inflation expectation in over three decades. It’s hard not to see this as a red flag—when consumers start anticipating sustained price increases, it can become a self-fulfilling prophecy as spending habits shift and businesses adjust accordingly.

Meanwhile, the Federal Reserve finds itself in a delicate balancing act. Despite these inflationary fears and a step-down in economic growth, the Fed is widely expected to hold steady at its Wednesday meeting, signalling patience rather than panic. This isn’t surprising—Fed Chair Jerome Powell has consistently emphasised a data-driven approach, and with inflation still above the two per cent target but not spiraling out of control, a pause makes sense.

However, the bond market tells a slightly different story. The yield on the 10-year US Treasury note ticked up 5 basis points to 4.31 per cent, a subtle but telling sign that investors are demanding higher returns to compensate for perceived risks. It’s a reminder that while equity markets may cheer short-term wins, the fixed-income crowd remains wary of longer-term uncertainties, particularly around fiscal policy and trade disruptions.

Speaking of trade, the commodities market offers another lens into this evolving narrative. Gold, that perennial safe-haven asset, climbed 0.5 per cent to breach the US$3,000-per-ounce mark for the first time—a milestone that speaks volumes about investor unease. With US policy uncertainty intensifying, particularly around tariffs and their potential to upend global supply chains, gold’s ascent feels less like a speculative bubble and more like a rational hedge.

Brent crude, too, edged higher by 0.3 per cent to US$71.61 per barrel, buoyed by the dual forces of tighter supply expectations (thanks to trade war jitters) and OPEC+’s decision to ramp up output. It’s a delicate dance—higher oil prices could stoke inflation further, yet they also reflect a market betting on sustained demand despite economic headwinds.

Across the Atlantic, European equities caught a tailwind from positive political developments in Germany, where Chancellor-in-waiting Friedrich Merz announced a deal with the Green Party on a defense and infrastructure package. This news lifted the EUR/USD pair by 0.3 per cent to 1.0876, suggesting a flicker of confidence in Europe’s economic stability amid its own challenges.

Asia, too, is showing signs of resilience. Equities there regained their footing last Friday and continued to trade higher in early sessions today, March 17, 2025. Investors are laser-focused on China’s upcoming data dump—fixed asset investments, retail sales, industrial production, and home prices—which could provide critical clues about the health of the world’s second-largest economy. Any weakness in these figures could ripple across global markets, especially given China’s role as a manufacturing powerhouse and consumer market. For now, though, the mood in Asia seems cautiously optimistic, mirroring the relief rally in the US.

But let’s pivot to a wildcard in this global financial tapestry: Bitcoin and its contrasting fates in South Korea and the United States. The Bank of Korea (BOK) has firmly rejected the idea of incorporating Bitcoin into its foreign exchange reserves, citing its wild price swings and the hefty transaction costs of converting it to cash.

The BOK’s stance aligns with the International Monetary Fund’s guidelines, which prioritise liquidity and risk management—attributes Bitcoin, with its volatility, struggles to meet. This conservative approach stands in sharp contrast to the US, where President Donald Trump recently signed an executive order establishing a Strategic Bitcoin Reserve.

It’s a bold move, signalling America’s willingness to embrace cryptocurrency as a strategic asset, perhaps as a hedge against dollar weakness or a play to attract blockchain investment. The divergence is striking: South Korea sees Bitcoin as a liability, while the US views it as an opportunity.

Then there’s North Korea, stealthily emerging as a major Bitcoin player through the exploits of the Lazarus Group. Their audacious US$1.4 billion heist from Bybit on February 21, 2025—mostly in Ethereum, later partially converted to Bitcoin—has catapulted the rogue state into the ranks of top government holders, with 13,562 BTC valued at US$1.14 billion.

It’s a chilling reminder of how cybercrime can reshape national wealth, turning digital theft into a treasury-building exercise. This development adds another layer of complexity to Bitcoin’s role in global finance, blurring the lines between legitimate investment and illicit gain.

Bitcoin’s price action itself remains a rollercoaster. I am eyeing a key resistance level at US$86,700, with failure to break through potentially sending it tumbling to US$77,859 or even US$71,011 if selling pressure mounts. Last week’s choppy movements reflect a market caught between bullish enthusiasm and bearish caution.

CryptoQuant analyst Darkfost noted on X that Bitcoin’s open interest hit a record US$33 billion in January, only to see nearly US$10 billion wiped out between February 20 and March 4 amid political uncertainty tied to Trump’s actions. This 90-day futures open interest drop of -14 per cent suggests a market reset, clearing out excess leverage and possibly setting the stage for a more stable recovery. It’s a pattern we’ve seen before—painful liquidations paving the way for cautious growth.

I see a world at a crossroads. The relief rally in US markets is a fleeting victory, a sugar high that masks deeper structural concerns. Consumer sentiment’s nosedive and rising inflation expectations signal a populace bracing for tougher times, potentially exacerbated by tariffs that could jack up costs across the board.

The Fed’s patience is prudent, but it risks being perceived as indecision if inflation accelerates unchecked. Gold’s record highs and oil’s upward creep underscore a flight to safety and supply-side worries, while Europe and Asia’s gains hint at a fragile global recovery that could easily falter. Bitcoin’s tale—shunned by South Korea, embraced by the US, and hoarded by North Korea—epitomises the chaos and opportunity of our digital age.

“For investors, it’s a time to tread carefully, balancing short-term gains against long-term risks. For the rest of us, it’s a front-row seat to a high-stakes economic drama where the next act is anyone’s guess.” — Anndy Lian

Source: https://e27.co/europe-rises-asia-watches-bitcoin-sideways-and-gold-shines-a-world-on-edge-20250317/