Global markets opened the week under significant pressure, driven by political instability in Washington and a shifting economic landscape.
The main source of uncertainty is a partial U.S. government shutdown that began on Saturday, January 31, after Congress failed to pass a funding bill—largely due to intense disputes over immigration policy. Although U.S. House Speaker Mike Johnson has signaled that negotiations have resumed with hopes of resolving by Tuesday to reopen key agencies such as the Department of Homeland Security, the disruption has already weighed on market sentiment.
This political friction has triggered a classic risk-averse environment. According to Bloomberg, the U.S. dollar strengthened as investors sought safety, while equity markets weakened. A stronger dollar typically creates headwinds for riskier asset classes, including equities and cryptocurrencies, as capital shifts from speculative markets into cash positions.
Institutional Response: Capital Outflows and Risk Management
These macroeconomic tensions have translated directly into declining interest in cryptocurrencies among institutional players.
Rising ETF Outflows: Risk-off sentiment is clearly visible in the ETF market. Cointelegraph reported that investors have withdrawn around $2.8 billion from Bitcoin ETFs over the past two weeks. The average Bitcoin ETF buyer is currently sitting on losses, significantly dampening the enthusiasm that previously drove inflows.
Nomura Pulls Back: Major financial institutions are also hitting the brakes. Nomura Holdings, Japan’s largest investment bank, announced that it is temporarily reducing its crypto exposure. Following a decline in Q4 profits and losses at its digital asset subsidiary, Laser Digital, the firm is prioritizing tighter risk controls over direct expansion—signaling a broader trend of institutional caution.
Industry-Specific: Revisiting the October 10 “Flash Crash”
While macro factors continue to pressure prices, the crypto market is also grappling with internal structural concerns. CoinDesk recently released a new analysis of the market crash on October 10, 2025, now dubbed the “$19 Billion Nightmare.”
Market sentiment remains fragile as reports indicate that the collapse was exacerbated by specific failures at Binance. The analysis suggests that a technical error in the exchange’s price oracle triggered a cascade of erroneous liquidations, wiping out billions of dollars in leveraged positions within hours. These retrospective findings have reignited concerns over the reliability of centralized infrastructure, further justifying the current caution among both retail and institutional traders.
Looking Ahead: A New Model for Creators?
Despite bearish price action and macro headwinds, development continues. Ethereum founder Vitalik Buterin this week proposed a new direction for the “creator economy.”
In response to the boom-and-bust cycles seen in recent SocialFi trends, Buterin put forward a “Creator Coin” model that integrates Decentralized Autonomous Organizations (DAOs) and prediction markets. Rather than speculative pump-and-dump schemes, this model would use DAOs to verify high-quality creators, potentially creating a more sustainable economic layer for the industry once market conditions stabilize.
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