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Political pressure on the US Federal Reserve has increased market uncertainty, reviving debate around Bitcoin’s role as a hedge against institutional and monetary risk.
XRP ETFs continue to attract strong institutional demand, even as Bitcoin and Ethereum ETFs face heavy outflows.
Last week, Bitcoin saw a net outflow of $681 million
Global crypto saw major developments, from an unprecedented probe into the US Federal Reserve to record XRP ETF activity, policy shifts in South Korea, and aggressive enforcement actions by Tether and Dubai regulators.
Political tensions in Washington grew as Jerome Powell, the chairman of the Federal Reserve, stated that he had received a threat of being prosecuted for his testimony in the Senate concerning the $2.5 billion renovation of the Fed headquarters.
The situation was viewed by Powell as an attack by the DoJ on the Fed's independence. He warned that the whole thing could have very serious consequences for the relationship of trust between the State and the Central Bank.
Investors took an approach of caution. The US futures went down, gold became more expensive, and the crypto community reignited debates around Bitcoin as a hedge against institutional and political risk.
The crypto market increased 0.16% in total market cap over 24 hours, reaching about $3.09 trillion.
XRP spot ETFs recorded a weekly trading volume of $219 million, the highest since their launch in November 2025.
Net inflows reached $38.1 million for the week ending January 9, even as Bitcoin and Ethereum funds suffered sharp losses.
XRP ETFs have now accumulated over $1.22 billion in net inflows, with assets under management approaching $2 billion.
Analysts at JPMorgan estimate that XRP ETFs could attract $4-8.4 billion in their first year, signaling strong institutional preference for XRP exposure amid broader ETF volatility.
Also Read: XRP Rises 25% in 2026: ETF Investments Drive Growth
The Financial Services Commission is finalizing rules that would allow listed companies and professional investors to allocate up to 5% of equity capital to cryptocurrencies, ending nearly eight years of restrictions.
The framework would limit investments to the top 20 cryptocurrencies by market capitalization and require transactions through South Korea’s largest regulated exchanges.
Investors see the move as a potential catalyst for domestic institutional inflows, faster ETF approvals, and increased support for local blockchain startups.
Tether froze $182 million in USDT across five TRON wallets, pointing out the connections to scams and illicit transactions as the reason for their move.
Tether's action has increased the total amount of stablecoins frozen from $3.3 billion in 2023, with over 7,200 addresses blacklisted.
The supply of USDT backed by TRON has reached over 82 billion tokens, which are the most common means of payment in the Asian region, especially for small-value transfers and peer-to-peer transactions.
Although freezes lead to concerns regarding censorship, they still are the only method through which funds associated with fraud and sanctions violations can be recovered.
According to SoSoValue, last week BTC saw a net outflow of $681 million. BlackRock's ETF IBIT led with a weekly net inflow of $25.8604 million. IBIT's historical cumulative net inflow has now reached $62.41 billion.
The spot Bitcoin ETF with the largest net outflow last week was Fidelity's ETF FBTC, with a weekly net outflow of $481 million.
Grayscale's ETF GBTC recorded a weekly net outflow of $172 million, bringing its historical cumulative net outflow to $25.41 billion.
The total net asset value of spot Bitcoin ETFs stands at $116.86 billion. The ETF net asset ratio has reached 6.48%.
Also Read: Is Bitcoin Hurting Financial Inclusion? The Energy Debate You Need to Know
In a major move, the Dubai Financial Services Authority has modified its crypto regulations by prohibiting privacy-centric cryptocurrencies like Monero and Zcash in the Dubai International Financial Centre.
The authority mentioned the risks related to compliance with anti-money laundering and sanctions.
The new regulations restrict the meaning of stablecoins, giving preference to those that are backed by fiat currencies and high-quality liquid assets, while not allowing algorithmic models to be considered stablecoins at all.
The licensed firms will now be responsible for determining the suitability of tokens, which brings Dubai in line with the global regulatory standards that stress the aspects of traceability and accountability.
1. Why is the Federal Reserve investigation important for crypto markets?
Political pressure on the Fed raises concerns over central bank independence, which often strengthens narratives around Bitcoin as a hedge against institutional and policy risk.
2. Why are XRP ETFs attracting inflows while Bitcoin ETFs see outflows?
Investors appear to be rotating toward XRP due to strong momentum, regulatory clarity, and perceived upside, while locking in profits from Bitcoin and Ethereum products.
3. How could South Korea’s policy change impact crypto adoption?
Allowing companies to invest up to 5% of equity in crypto could unlock significant institutional capital and support local blockchain innovation.
4. Why did Tether freeze $182 million in USDT on TRON?
The funds were linked to scams and illicit activity, and freezing them helps limit fraud and enforce sanctions compliance despite censorship concerns.
5. What does Dubai’s ban on privacy tokens signal for the crypto industry?
It highlights a global regulatory shift toward traceability and compliance, favoring transparent assets while limiting privacy-focused cryptocurrencies.
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Disclaimer: Analytics Insight does not provide financial advice or guidance on cryptocurrencies and stocks. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. This article is provided for informational purposes and does not constitute investment advice. You are responsible for conducting your own research (DYOR) before making any investments. Read more about the financial risks involved here.
