Weekly Summary: At a Crossroads - Bitcoin Balances Between Recession and Bull Rally

The Federal Reserve meeting and the active formation of a new cryptocurrency policy by the Trump administration were the key events of the week that determined the market movement. Bitcoin showed resilience, recovering above $87 800 despite growing recession fears. 

Corporate investors continue to hoard the cryptocurrency, and the stablecoin industry is breaking capitalization records, surpassing the $230 billion mark. Experts' opinions on the market's prospects are divided from forecasts of a prolonged correction to a possible rise to $200 000 in the next two years.

Biggest Short of the Year Against the Community: Whale Bet $368 Million on Bitcoin's Fall

Shortly before the Federal Open Market Committee (FOMC) meeting, a trader opened a short on 4 442 bitcoins with 40x leverage. With an average entry price of $84 043, the trade totaled over $368 million and the liquidation point was set at $85 592. Following news of the large short position, a fundraising campaign was launched on social network X to counter this strategy - users attempted to organize a "short squeeze" to forcibly close the whale position with a sharp rise in price, similar to the case of GameStop stock.

Despite resistance from the community, a major player managed to close his position with a profit. According to data from Hypurrscan, the trader made $9.46 million in eight days, converting a portion of the profit into 3 200 Ethereum worth $6.1 million.

Analyst firm QCP Capital in its report noted the correlation of this event with the cryptocurrency market's Fear and Greed Index at 32% ("fear"), reflecting a persistent negative attitude towards risk, especially given the overall negativity in equity markets.

On The Brink of Recession: Bitcoin as an Alternative Macro Hedge

Bitcoin has begun to show itself as an alternative macro hedge amid growing fears of a US recession. Treasury Secretary Scott Bessent said a recession cannot be ruled out, reiterating a view previously expressed by Donald Trump.

BlackRock's head of digital assets Robbie Mitchnick emphasized that bitcoin is likely to thrive in a recession:

He said bitcoin will be energized by increased fiscal spending, deficit accumulation, lower interest rates and monetary stimulus - all things that typically happen during a recession.

An opposing view was expressed by Coinbase researchers, who stated that the positive outlook for cryptocurrencies for the first quarter was "clearly misguided" due to recession fears and recently imposed tariffs.

Fed Meeting as a Key Driver of Market Movement

On March 19, the long-awaited Federal Open Market Committee (FOMC) meeting took place. As expected, the Fed kept interest rates unchanged, but confirmed plans for two rate cuts before the end of 2025. Fed Chairman Jerome Powell stated that inflation has "declined significantly."

A key driver of the rise was the Fed's decision to scale back its quantitative tightening program starting in April. According to data from QCP Capital, markets interpreted this as an indirect rate cut, reinforcing expectations of monetary easing as early as June.

Former CEO of cryptocurrency exchange BitMEX Arthur Hayes noted that quantitative tightening effectively ends on April 1, and a true bull run would require either a loosening of bank reserve ratios or a restart of quantitative easing.

The Trump Administration is Shaping a New US Crypto Policy

US President Donald Trump continues to shape a new cryptocurrency policy. On March 20, he became the first sitting U.S. president to speak at the Blockworks Digital Asset Summit cryptocurrency conference. In his address, Trump reaffirmed his intention to make the U.S. the "cryptocurrency capital of the world" and praised the role of stablecoins: "With dollar-backed stablecoins, you will help expand the dominance of the U.S. dollar for years to come."

Bo Hines, executive director of the President's Council of Advisors on Digital Assets, stated that the federal government is considering budget-neutral ways to acquire bitcoin, such as realizing profits from gold certificates. According to the Federal Reserve Bank of St. Louis, all gold certificates settle at a set price of $42.22 per troy ounce, while the current spot price of gold exceeds $3 000.

Minnesota Senator Jeremy Miller introduced the "Bitcoin Act," which provides the ability for public employees to include bitcoin in retirement accounts, pay taxes and fees with bitcoin, and exempt investment gains from state income tax.

Stablecoin Market Growth Amid Institutional Adoption

Stablecoin capitalization continues to skyrocket, exceeding $230 billion thanks to the Trump administration's direction and institutional interest. Compared to the same period last year, the market capitalization of steblecoins is up 56%.

Tether's USDT dominates with a 62.6% share, reaching nearly $144 billion, followed by Circle's USDC with a market capitalization of $59 billion. LVRG Research Director Nick Ruck explains this growth by increasing institutional participation in the cryptosphere and easier access for traditional financial firms.

Ethereum continues to lead the way as the primary blockchain for stablecoin transactions, holding $35 billion in USDC and $67 billion in USDT. Stablecoin volume on the blockchain has maintained an impressive momentum, totaling roughly $800 billion per month over the past four months. USDC and USDT account for $740 billion of the total $850 billion volume for February.

Tether CEO Paolo Ardoino stated that conducting a full audit of USDT is a "top priority" for the company and would go much easier with the support of the Trump administration.

Global Cryptocurrency Regulation: From Bans to Adoption

The global regulatory space is trending toward a softening stance on cryptocurrencies. The U.S. Treasury Department excluded mixer Tornado Cash from the blacklist following a January ruling by a U.S. appeals court that found the sanctions illegal. The court found that "immutable smart contracts are not the property of a foreign national or entity."

The Australian government presented a plan to regulate cryptocurrencies that would subject exchanges to existing financial services laws. The new regime imposes the same regulatory requirements on cryptocurrency companies that exist for other companies: protection of customer assets, mandatory Australian financial services license and minimum capital requirements.

Pakistan has dramatically changed its stance on cryptocurrencies. The head of Pakistan's Cryptocurrency Board, Bilal Bin Saqib, has proposed using the country's excess energy to mine bitcoin. This is in stark contrast to 2023's statement that cryptocurrencies will never be legalized in the country.

In Russia, the approach to regulation remains more conservative. The head of the Bank of Russia Elvira Nabiullina proposed not only to ban the use of cryptocurrencies for settlements between Russian residents, but also to introduce liability for violation of this ban. At the same time, the Central Bank allows the creation of conditions for investment in cryptocurrencies, but only for "especially qualified" investors.

Corporate Bitcoin Accumulation Continues

Despite market fluctuations, corporate hoarders continue to increase their bitcoin holdings. The number of publicly traded companies buying and holding bitcoin has increased to 80 in 2025, up 142% from 33 companies in 2023.

Japanese company Metaplanet purchased another 150 bitcoins worth $12.5 million, increasing its cryptocurrency reserves to 3 200 coins. The company also issued 2 billion yen (about $13.3 million) worth of bonds to continue buying up the cryptocurrency. Metaplanet plans to own 10 000 bitcoins by the end of 2025 and 21 000 coins by the end of 2026.

US President Donald Trump's son Eric Trump joined Metaplanet's strategic board of directors, further emphasizing the rapprochement between the Trump family and the crypto industry.

At the same time, Strategy (formerly MicroStrategy) made the smallest bitcoin purchase in the history of observation - 130 bitcoins for $10.7 million. With this acquisition, Strategy and its subsidiaries now own 499 226 bitcoins.

Expert Forecasts: From Bear Market to $200 000

Experts' opinions on the future of bitcoin are divided. CryptoQuant founder and CEO Ki Young Ju predicts up to 12 months of "bearish or sideways price movement," stating that "bitcoin's bull cycle is over." According to him, all of bitcoin's onchain metrics point to a bear market, "As fresh liquidity is depleted, new whales are selling bitcoin at lower prices."

An opposing view was expressed by Bitget CEO Gracy Chen, stating that bitcoin could cross the $200 000 mark within the next 1-2 years. In her opinion, bitcoin will not fall below $70 000, rather $73-78 000, which is a good entry point for hesitant investors.

Financial expert Timothy Peterson presented an analysis according to which bitcoin has a good chance of setting a new all-time high by June this year. According to his predictions, BTC/USD has about two and a half months left to surpass the current record of $108 000. Peterson set a median target of $126 000 with a June 1 deadline.