Monetary Policy

ECB's Piero Cipollone stated that the EU's tokenization market needs to meet three conditions: developing a digital euro to stabilize transactions, collaborating with enterprises to ensure market demand, and coordinating legal regulations to address cross-border obstacles. Once implemented, it is expected to accelerate market growth and drive financial innovation and capital integration.

The latest draft of the CLARITY Act, being advanced by the U.S. Senate, prohibits stablecoin service platforms from offering yield to holders, which could impact the business models of stablecoins. While the draft allows certain rewards unrelated to account balances, the vague "economic equivalence" provision has sparked market concerns. The act is expected to enter the review stage in April and will have far-reaching implications for the crypto industry.

Goldman Sachs Chief Economist Jan Hatzius raised the probability of a U.S. economic recession to 30%, with growth forecast lowered to 1.25%-1.75%. Three major factors—oil prices, tariffs, and the phase-out of fiscal stimulus—are dragging on the economy. Despite market expectations for rate hikes, Goldman Sachs predicts two rate cuts before year-end, arguing that the bond market has overreacted to inflation pressures.

The U.S. Clarity Act's latest amendments prohibit stablecoins from earning interest, allowing only rewards based on user behavior. This is a reaction from the banking industry to protect the deposit market. This move has profound implications for DeFi protocols, as many protocols rely on interest-like yield models for their operations. The legislative process still faces unresolved issues, particularly controversies related to DeFi regulation and financial crime prevention.

Circle recently submitted feedback on the EU's capital markets integration plan, arguing that reform progress is slow. The company recommends introducing adaptive threshold mechanisms, clarifying the pathway for pilot programs to become permanent rules, and allowing crypto service providers to offer settlement accounts to promote market liquidity and competitiveness. Circle is also focused on stablecoin applications in securities settlement and is calling for reduced regulatory scope to lower compliance costs and prevent capital outflows.

Crypto investment products maintained their inflow streak last week but momentum slowed amid ongoing Middle East tensions and a “hawkish pause” interpretation of the US Fed’s meeting. Crypto exchange-traded products (ETPs) recorded $230 million in inflows last week, with $405 million in outflows

After Trump announced a temporary easing of tensions with Iran, Bitcoin rose 4% in the short term, WTI crude oil prices fell 14%, and the S&P 500 index gained 3%. The futures market shows Bitcoin's annualized premium is below the normal range, options market prices the probability of Bitcoin reaching $80,000 at 20%, and the market lacks confidence in the $68,000 support level.

Bitcoin hovers around $68,000 amid significant U.S. economic data expected to influence interest rate expectations and market risk appetite. Key indicators like PMI and unemployment claims could signal economic health, impacting Bitcoin's performance based on potential Fed policy adjustments.

Citigroup has lowered its 12-month price targets for Bitcoin and Ethereum, signaling a shift toward caution on the cryptocurrency market's medium-term outlook, primarily due to slow progress in U.S. crypto asset legislation. Bitcoin's target was reduced from $143,000 to $112,000, while Ethereum's fell to $3,175. Despite upside potential remaining in the future, the lack of new policy catalysts suggests prices may oscillate within a range in the near term. Citigroup's assessment of Ethereum is more cautious, as it believes the asset is more significantly impacted by on-chain activity.

Goldman Sachs expects the probability of a U.S. recession to rise to 30% due to soaring oil and gas prices. The Middle East conflict and tax law effects are impacting the economy, with the unemployment rate forecast increased to 4.6%. GDP growth is projected to be below trend in the second half of this year, oil price forecasts have been raised, and the conflict may drive up global inflation and influence GDP growth.

Gate News reported that on March 24, according to CME (Chicago Mercantile Exchange) "FedWatch" data, the probability of the Federal Reserve raising rates by 25 basis points in April is 7.2%, with a 92.8% probability of maintaining the current rate. The probability of the Federal Reserve cumulatively raising rates by 25 basis points through June is 9.1%, with a 0.2% probability of cumulatively raising rates by 50 basis points, and a 90.7% probability of maintaining the current rate.

Circle submitted feedback to the European Union regarding the "Market Integration Plan," urging the acceleration of digital asset regulatory reforms. While supporting the modernization of capital markets, Circle highlighted that the existing mechanisms impose limitations on liquidity and institutional participation, and recommended implementing dynamic threshold mechanisms along with clarifying the regulatory transition pathway.

Brazil has postponed its crypto tax consultation to 2027 due to election pressures, despite implementing a 17.5% capital gains tax and classifying stablecoins as foreign exchange. Crypto adoption remains robust, with significant inflows and growth.

Gate News reported that on March 23rd, Federal Reserve Governor Barr stated that rate hikes may be necessary if second-round inflation effects and wage increases occur. However, he also pointed out that he does not currently believe it is necessary to consider rate hikes.

CoinShares' latest weekly report shows that digital asset investment products saw a net inflow of $230 million last week, but due to the Federal Reserve's hawkish stance, approximately $405 million flowed out following the FOMC. The United States saw inflows of $153 million, Germany $30.2 million, and Switzerland $27.5 million, with Bitcoin dominating inflows. Solana has seen consecutive net inflows for 7 weeks, but Ethereum saw outflows of $27.5 million last week.

The Commodity Futures Trading Commission (CFTC) has taken a clear step toward integrating cryptocurrencies into traditional finance. In its latest guidance, the regulator allows Bitcoin and Ethereum to be used as collateral in derivatives trading while applying a 20% capital charge to manage

On March 23rd, gold prices plummeted approximately 25%, falling below $4,200 per ounce, with over $10 trillion wiped from market value. Despite tensions between the US and Iran and rising inflation, the market engaged in heated discussions about the reasons for the gold price decline. Analysts pointed out that this selloff may be related to high interest rates and shifts in market sentiment, with future focus on macroeconomic data and the Federal Reserve's policy direction.

Fidelity says U.S. market infrastructure can support crypto trading under existing laws without building new systems. Firm backs SEC Crypto Task Force efforts, stressing collaboration to address technical and regulatory challenges. Integration into regulated systems could expand access

Gate News reported that on March 23rd, the market raised expectations for ECB rate hikes, with pricing showing a 50% probability that four rate hikes are currently expected to be implemented in 2026, and the possibility of further rate hikes is rising.

CME data shows that the probability of Federal Reserve rate cuts has dropped to zero, while the probability of rate hikes has increased to 12.4%. The market's interest rate expectations have been rapidly repriced, causing Bitcoin's price to pull back to $68,739. Rising crude oil prices and increased inflation expectations have further diminished the appeal of crypto assets. Analysts warn that the higher the probability of rate hikes, the lower institutional interest in Bitcoin becomes, putting pressure on the market in the short term.