Bitcoin's role as a safe haven asset was questioned—Powell's judicial investigation became a bridge, and the subsequent market reaction changed rapidly.

On January 12, 2026, the Asia-Pacific markets initially showed a steady start with BTC (Bitcoin). Following reports of a judicial investigation into Federal Reserve Chair Jerome Powell, the market responded to increased demand for safe-haven assets, pushing BTC up to around $92,000. However, subsequent developments greatly disappointed investor expectations. The political uncertainty that became a limbo triggered unexpected movements within the subsequent market mechanisms.

Since its inception in 2009, Bitcoin has been positioned as an anti-establishment asset and a shield against fiscal mismanagement and political turmoil. However, this week’s market trends suggest that this traditional narrative does not always hold true in certain environments.

Political Pressure and Central Bank Independence—Comparison with Traditional Safe-Haven Assets

The criminal investigation into Chair Powell symbolizes rising tensions between President Trump and the Federal Reserve. The investigation focuses on congressional testimony regarding the Fed’s $2.5 billion renovation, which Powell refused, interpreted as political pressure for the administration’s repeated calls for rate cuts.

Amid concerns over the independence of central banks, the market shifted toward traditional safe-haven assets. Gold surged past $4,600 per ounce to an all-time high, and silver also hit a peak of $84.60. The strong start of BTC, contrary to weakness in Nasdaq futures, tentatively indicated increased demand for safe-haven assets. However, the rare divergence between Bitcoin and the stock market was short-lived.

ETF Capital Outflows and Subsequent Selective Risk Appetite—What Did the Market Sell?

As European trading hours began, BTC fell to $90,500, and the broader crypto market also retreated. According to Timothy Mischel, Head of Research at BRN, despite active trading volume of $19.5 billion, the spot Bitcoin ETF recorded a net outflow of $680 million from January 5 to January 9.

Subsequent fund flows clearly reflect a selective risk appetite among market participants. While Ethereum ETFs experienced weekly outflows of $69 million, XRP and SOL ETFs continued to attract capital. Mischel pointed out, “This is not broad risk aversion but reinforces a theme of selective risk appetite.”

Privacy-focused Monero adjusted from its all-time high of $598 to $571 but rose 15% within 24 hours. Coins like CC, RENDER, and ZEC also drew attention, showing 4%–5% gains over the past 24 hours, indicating that the market is reallocating capital to specific sectors.

Continued Low-Interest Environment and Diminishing Rate Cut Expectations

BTC’s correction phase is progressing amid last week’s rising interest rates. This is interpreted as a sign that the market does not expect Chair Powell to capitulate to legal pressures and aggressively cut rates. As of writing, the US 10-year Treasury yield is expected to exceed 4.2%, and the yield on the sensitive 2-year Treasury has reached 3.54%, a two-week high.

ING analysts stated that the decline in the US unemployment rate in December, announced by the Bureau of Labor Statistics, and the potentially higher-than-expected inflation rate to be released this week could prevent the Fed from cutting rates at least until March. In this scenario, Bitcoin’s relative appeal as a safe-haven asset may be limited.

Derivative Markets Indicate Cautious Sentiment

Other market participants point to short-term bearish signals. The 30-day implied volatility indices for BTC and ETH are at their lowest in weeks, suggesting the market does not anticipate significant recent movements.

From a technical analysis perspective, Chainlink (LINK) tokens are testing resistance at the downward trendline drawn from August highs. A move above this trendline would be considered a bullish breakout, potentially boosting demand for the token further, but currently, this seems limited.

Tightening Regulatory Environment—Dubai Bans Privacy Tokens

Policy developments continue to exert pressure on the market. On January 12, the revised cryptocurrency token regulation framework by the Dubai Financial Services Authority took effect at the Dubai International Financial Centre. The regulation bans privacy tokens and strengthens stablecoin regulations, citing international anti-money laundering standards. It abolishes the list of approved tokens at the Dubai International Financial Centre and imposes compliance verification responsibilities on companies.

This tightening regulatory environment is likely to weigh on overall market sentiment and is one of the factors diminishing Bitcoin’s traditional role as a safe-haven asset.

Cryptocurrency Company Stocks and Market Expectations

Stocks of crypto-related companies show mixed movements. Coinbase Global (COIN) closed at $240.78 (-1.96%) on Friday, with pre-market at $239.70 (-0.45%). Galaxy Digital (GLXY) also closed at $24.94 (-2.20%). Meanwhile, Riot Platforms (RIOT) finished strong at $15.32 (+1.26%), reflecting ongoing divergence in market sentiment.

Among crypto treasury companies, MicroStrategy (MSTR) fell sharply to $157.33 (-5.77%), suggesting investors are losing confidence in Bitcoin holdings.

Current Market Conditions and Outlook

The current Bitcoin price is $78,510, down 6.58% over 24 hours. The 24-hour high was $84,220, and the low was $75,680, with volatility remaining low. Market dominance (BTC Dominance) stands at 56.35%, and Ethereum is at $2,450, down 9.57%.

Spot Bitcoin ETFs recorded net outflows of $250 million daily, with a cumulative net outflow of $56.38 billion. Total BTC holdings are approximately 1.29 million BTC. Spot ETH ETFs also saw net outflows of $93.8 million, with total net outflows reaching $12.45 billion.

In the short term, the US 10-year Treasury yield is at 4.197%, and E-mini S&P 500 futures are down 0.63% at 6,961.00. The DXY dollar index is at 98.84.

Challenges Beyond the Limbo—Market Outlook

This week’s market movements raise fundamental questions about Bitcoin’s traditional role as a safe-haven asset. The political uncertainty that became a limbo resulted in outcomes different from expectations within the subsequent market mechanisms. Multiple factors—maintained interest rates, tightening regulations, and ETF capital outflows—are prompting market participants to explore new asset allocations.

While gold and other traditional safe-havens continue to rise, Bitcoin’s inability to perform similarly suggests that the maturity of the crypto market and evolving market mechanisms are at play. Clarifying the timing of future rate cuts and stabilizing policy environments, such as privacy token regulations, will be key factors in determining the market’s next direction.