Weekly Update: 16th of January
What happened between the 9th and the 16th of January?
- A criminal probe into Fed Chair Powell intensifies political pressure and revives the independence debate, with investors watching rates, credibility and the dollar. Read more
- Trump ordered $200 billion of mortgage bond purchases to ease housing costs, injecting liquidity and signalling a willingness to bypass the Fed’s policy stance. Read more
- BNY Mellon launched blockchain-based tokenized deposits for institutions, enabling real-time on-chain settlement and collateral flows while staying inside bank-grade controls. Read more
- Bitcoin rebounded toward $98K, but caution remains; altcoins followed selectively, with privacy tokens leading as investors gradually rebuild risk exposure. Read more
Powell probe puts Fed independence in focus
Federal Reserve Chair Jerome Powell is facing a criminal investigation, raising concerns about political pressure on monetary policy. President Donald Trump has criticised Powell for months and is again signalling potential replacements. For markets, the bigger issue is institutional: central-bank independence anchors inflation expectations, supports the dollar and shapes Treasury pricing. If investors believe rate and balance-sheet policy can be politically steered, risk premia can rise and borrowing costs can increase. Trump is also managing optics, avoiding the impression he is openly undermining the Fed while still campaigning against high rates. For crypto, the link is clear: liquidity and rate expectations remain key drivers of risk appetite.
Trump orders $200 billion in mortgage bonds
Trump has ordered roughly $200 billion of mortgage bond purchases, officially aimed at lowering mortgage rates and improving housing affordability. Beyond housing, stronger demand for mortgage-backed securities can loosen financial conditions, increase liquidity and compress risk spreads. Politically, it fits a pattern of acting while the relationship with the Fed remains strained. For investors, the key question is durability. In the near term, easier conditions can support risk assets, but the move also raises questions about the boundary between government-directed credit support and central-bank-led monetary policy. That mix matters for crypto because it feeds directly into liquidity expectations and sentiment.
BNY Mellon launches blockchain-based tokenized deposits
BNY Mellon has rolled out tokenized deposits for institutional clients, creating digital representations of bank deposits that can move and settle on blockchain rails. The goal is operational efficiency: faster settlement, 24/7 cash movement and improved collateral workflows, while staying within existing supervisory frameworks. This is not a retail stablecoin, but a bank-native product built for professional participants with bank-grade governance and compliance. Strategically, it signals tokenization is moving from pilots into core financial plumbing. As these deposit-based on-chain cash instruments scale, they can narrow the gap between traditional treasury operations and on-chain settlement.
Bitcoin rebounds toward $98K, altcoins remain selective
The market staged a cautious recovery, with Bitcoin pushing to $98,000. The move is constructive, but confirmation through sustained spot demand and higher lows is still needed. Altcoins followed more unevenly and remain selective. Privacy-focused sectors produced outsized moves as demand for transaction confidentiality rises alongside tighter compliance and monitoring. ETF flows also showed a significant uptick in inflows, compared to large outflows last week. Bitcoin was leading the charge with days above $700 million in inflows.
In other digital assets news
- Strategy bought roughly $1.25 billion more Bitcoin, while BitMine continued adding to its Ethereum treasury.
- Ripple secured UK FCA registration under AML/CTF rules, a key stepping stone toward expanding regulated financial services in the UK.
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