Week 13, 2026

The debate shifted from how many rate cuts to whether the Fed will hike. Fannie Mae backed crypto-collateralized mortgages for the first time, wiring digital asset wealth directly into the US housing market. Morgan Stanley became the first major US bank to file a spot Bitcoin ETF, with an NYSE listing Bloomberg calls 'imminent.' And the CLARITY Act's stablecoin yield stalemate broke on March 23 with a White House-Senate compromise, putting an April 3 Senate markup in sight.

Week 13 opened with a question that would have sounded absurd four weeks ago: is the Federal Reserve's next move a hike rather than a cut? CME FedWatch data showed April rate hike probability had climbed from 0% to 12% in a single week, the fastest reversal in rate expectations since the 2022 tightening cycle. UK gilt yields topped 5% for the first time since 2008. The S&P 500, down over 5% since the Iran war began, extended its decline for a fourth consecutive week. Gold erased all of its post-war gains, falling from $5,500 to $4,434 as rising real rates undermined the non-yielding metal. Bitcoin opened the week at $70,416 and held the $69,000-$72,000 range through all of it, again outperforming every major risk asset on a relative basis. While macro pressure dominated the price action, three structural developments arrived that will matter far more to the long-term thesis than any weekly candle. Fannie Mae announced it would accept crypto-backed mortgages for the first time, via a product built by Coinbase and Better Home & Finance -- wiring digital asset collateral into the underwriting framework that backstops roughly half of all US mortgages. Morgan Stanley filed for MSBT, becoming the first major US bank to directly issue a spot Bitcoin ETF, with an NYSE Arca listing that Bloomberg's Eric Balchunas described as typically meaning a launch is 'imminent.' And the CLARITY Act's stablecoin yield impasse broke on March 23, when the White House and Senate reached a compromise on the provision that had been the banking lobby's explicit red line since March 5, opening the path to an April 3 Senate Banking Committee markup.

1. Rate Hike Bets Enter the Picture for the First Time -- Bitcoin Holds as Bond Markets Crack Globally

Headline: Bitcoin's Latest Fear Unlocked as Rate Hike Bets Rise and Bond Markets Crumble

Only weeks ago the debate in US rate markets centered on how many cuts the Fed would deliver in 2026. By Friday March 20, that debate had mutated into something the market had not priced since the 2022 tightening cycle: whether the Fed's next move is a hike. CME FedWatch showed April rate hike probability at 12%, up from 0% the prior week. The catalyst: oil is up approximately 50% since the Iran war began on February 28, February PPI came in at +0.7% MoM versus 0.3% expected, and the March CPI (April 10) is the first print to fully capture the energy shock. The bond market reaction has been global. The US 10-year Treasury yield climbed to 4.38%, up 10 basis points on Friday alone and up from under 4.0% at the start of March. UK 10-year gilt yields topped 5% for the first time since 2008, up 15% in a month. The S&P 500 extended its post-war decline past 5%, now on track for a fourth consecutive weekly loss. The Nasdaq fell similarly. Gold, which peaked at $5,500 per ounce in early March as the primary safe-haven of the conflict, has since retreated to $4,434 as rising real rates undercut the non-yielding metal's appeal. Bitcoin opened the week at $70,416, tested briefly toward $68,600, then recovered to hold near $69,000-$71,000 through end of week, closing March 26 around $69,438. The Fear & Greed Index stood at 37 -- still in fear territory but meaningfully recovered from the single-digit extreme fear readings of early February.

Impact: April rate hike probability moving from 0% to 12% in a single week is a structural signal. A 12% probability means the market is assigning meaningful weight to a scenario where the Fed reverses its 2025 easing cycle less than four months after it concluded. For risk assets broadly, that scenario is deeply adverse. For Bitcoin specifically, the picture is more nuanced. Holding $69,000-$72,000 during a week when bonds sold off globally and gold fell 6% suggests Bitcoin's correlation structure is shifting under pressure. It is not decoupled from the macro regime, but it is behaving differently from equities and differently from gold -- two assets that are both losing in the current stagflationary setup. Bitcoin, with its post-halving annual issuance under 2%, is structurally positioned as a fixed-supply asset in an environment where the inflation outlook is deteriorating. The rate hike repricing is the most important macro development to watch heading into the March 28 PCE release and the April 10 CPI. If oil retreats and the energy passthrough proves transitory, the hike probability collapses and the rate-cut window reopens. If energy stays elevated, the Fed's next step becomes genuinely uncertain for the first time since 2022.

2. Fannie Mae Accepts Crypto-Backed Mortgages -- Bitcoin and USDC Now Qualify as Down Payment Collateral in the US Housing Market

Headline: Coinbase, Fannie Mae Bring Crypto-Backed Mortgages to Home Buyers

On Thursday March 26, Coinbase and mortgage originator Better Home & Finance announced a new product that allows home buyers to pledge Bitcoin or USDC as collateral for a down payment on a Fannie Mae-conforming mortgage, without liquidating their positions. The Wall Street Journal first reported the story. The structure is precise: borrowers transfer their digital assets from Coinbase into a Better custody wallet, where the assets remain the borrower's property. A separate loan against that collateral funds the down payment. The mortgage itself conforms fully to Fannie Mae standards -- identical protections and underwriting as traditional conforming loans. Only crypto held on US-regulated exchanges qualifies. The product carries rates 0.5 to 1.5 percentage points above standard 30-year loans depending on borrower profile. Critically, there are no margin calls if Bitcoin drops in value; the only liquidation trigger is a 60-day payment delinquency, consistent with standard Fannie Mae mortgage terms. For USDC holders, assets continue earning rewards while pledged as collateral. The product traces back to June 2025, when Federal Housing Finance Agency Director William Pulte ordered Fannie Mae and Freddie Mac to prepare proposals allowing cryptocurrency as a mortgage reserve asset -- a directive that had seen limited follow-through until this week's launch. Fannie Mae and Freddie Mac together backstop roughly 50% of all US securitized mortgages. Their underwriting decisions effectively become the industry standard that every other lender follows. Newrez, a $778 billion mortgage lender, had already announced in late 2025 that it would assess Bitcoin and Ethereum for mortgage qualification. A 2025 Redfin survey found that more than 10% of millennial and Gen-Z home buyers had sold crypto to fund down payments -- the exact pool of borrowers this product is designed to serve.

Impact: This is one of the most structurally significant developments in Bitcoin's integration into mainstream finance since the spot ETF approvals in January 2024. Here is why Fannie Mae's involvement matters beyond the product itself: Fannie Mae does not follow the market, it sets the standard. When Fannie Mae changes its underwriting guidelines, every conforming lender in America adapts within months. The Fannie Mae announcement means crypto-backed mortgage collateral is now a standardized, government-backed financial instrument -- not a niche fintech product from a crypto-native startup. For Bitcoin specifically, the no-margin-call structure is a deliberate design choice that solves the volatility problem that has historically made Bitcoin-backed lending products unattractive to retail borrowers: price drops cannot force liquidation. Only payment default can. That structure makes Bitcoin a usable collateral asset for long-term holders who want housing access without surrendering their position. The addressable market is material: Coinbase has 110 million verified users globally, and if even 1% of millennial and Gen-Z homebuyers who previously sold crypto to fund down payments now retain that exposure instead, the structural selling pressure on Bitcoin from the housing lifecycle is reduced. For European ETP issuers, the Fannie Mae development confirms the direction: Bitcoin is being embedded into the largest financial markets in the world -- mortgages, ETFs, corporate treasuries, sovereign reserves -- one policy decision at a time.

3. Morgan Stanley Files MSBT -- The First Spot Bitcoin ETF Issued Directly by a Major US Bank

Headline: Morgan Stanley Sets MSBT Ticker and $1 Million Seed Capital for Bitcoin ETF

On March 20, Morgan Stanley filed an amended S-1 registration with the SEC for the Morgan Stanley Bitcoin Trust, locking in MSBT as the ticker and NYSE Arca as the listing venue. On March 25, the bank filed Form 8-A with NYSE Arca -- a procedural step that Bloomberg's Eric Balchunas described as 'typically meaning launch is imminent'. The fund structure is fully operational: Coinbase Custody holds the Bitcoin in cold storage, BNY Mellon handles cash, administration, and transfer agent functions, and Jane Street, Virtu Americas, and Macquarie Capital are named as authorized participants. Seed investment: $1 million across 50,000 initial shares at $20.00 each. No management fee has been disclosed. MSBT will trade physically-backed spot Bitcoin without leverage or derivatives, structurally identical to existing products from BlackRock, Fidelity, and VanEck. The distinction is the issuer: Morgan Stanley is the first major US bank to directly issue a spot Bitcoin ETF, rather than an asset management firm. The bank manages $5.5 trillion in client assets through approximately 16,000 financial advisors. MSBT is part of a broader digital asset buildout: a spot Solana ETF filed separately in January 2026, retail crypto trading via E*Trade planned for H1 2026, and tokenized equities on its alternative trading system in H2 2026.

Impact: Every existing spot Bitcoin ETF was created by an asset management firm. Morgan Stanley is a distribution machine with 16,000 advisors who sit across the table from the exact institutional and high-net-worth clients that Bitcoin Capital's European ETP products are also targeting. The difference is not the fund structure, which is nearly identical to IBIT. The difference is that MSBT, once approved, will arrive already embedded in the investment conversations Morgan Stanley advisors are having with pension funds, endowments, family offices, and corporate treasurers. Those advisors have fiduciary incentive to recommend their own firm's product. That creates a structural flow advantage that BlackRock's first-mover position does not neutralize. If MSBT launches in Q2 and attracts even 5% of Morgan Stanley's AUM in Bitcoin ETF allocations, it would represent a demand pool larger than the entire current Bitcoin ETF market. The second wave of Bitcoin ETF institutional adoption is being built at the distribution layer, not just the asset management layer. Approval expected: late Q2 to early Q3 2026.

4. ETF Flows Deteriorate Sharply as Macro Headwinds Reassert -- Week of March 20 Drops to ~$53M, March 26 Sees Fresh Outflows

Headline: Bitcoin ETF Outflows Resume as Institutional Flows Turn Volatile on March 26

The ETF flow deterioration that began with the March 18 FOMC decision accelerated through Week 13. The week ending March 20 recorded approximately $53.5 million in total net inflows, a sharp deceleration from $767 million the prior week and the end of the three-week inflow streak that Bitcoin Capital had flagged as the institutional accumulation confirmation. On March 26, US spot Bitcoin ETFs recorded net outflows estimated at $300-350 million in a single session, as rate hike repricing and geopolitical binary risk ahead of the March 28 PCE expiry drove institutional risk reduction. The daily flow pattern reveals the macro sensitivity clearly: inflows on days when ceasefire news was positive and CLARITY Act progress was reported, outflows on days when rate hike fears dominated and oil spiked. The broader monthly picture remains in context: March total ETF flows remain net positive with the three-week inflow streak contributing approximately $2.12 billion before the FOMC reset sentiment. Total net assets across all US spot Bitcoin ETFs dropped to approximately $89 billion from the $91.83 billion March 13 peak. The flow pattern is consistent with Week 11's dynamic, when a single $227 million outflow day broke the prior inflow run before accumulation resumed.

Impact: The Week 13 ETF flow deterioration is not a structural reversal of the March accumulation thesis. It is macro sensitivity responding to a specific and temporary input: the rate hike repricing and the Iran ceasefire binary. The Bitwise diamond hands data from Week 12 remains the structural anchor: over 83% of the $60 billion invested through the bull market is still in the ETF complex. Tactical week-to-week flows will continue to mirror the macro environment until either the ceasefire question resolves or the rate hike probability retreats. The March 28 PCE data is the first hard data point that will tell the market whether the Fed's 2.7% inflation forecast is conservative or insufficient. A PCE print in line with or below February's levels would deflate the April rate hike probability and likely reverse this week's outflow trend. A hot print above 0.4% month-over-month confirms the hike narrative and extends outflow pressure through April.

5. CLARITY Act Stablecoin Yield Compromise Reached -- White House and Senate Agree on 'Guardrails,' April 3 Markup Now in Sight

Headline: Senators Try to Unlock Stalled Crypto Clarity Act with Compromise on Stablecoin Yield

On March 23, the White House and senior Senate officials reportedly reached an agreement on the stablecoin yield provision that had been the single most consequential obstacle to advancing the Digital Asset Market Clarity Act. The deal, described by multiple Washington sources, introduces regulatory 'guardrails' that distinguish between pure yield payments on stablecoins -- which remain prohibited, the position the American Bankers Association refused to budge on -- and activity-linked rewards or customer incentives, which are permitted under the compromise framework. Coinbase already offers approximately 3.5% on USDC holdings through its rewards program; the compromise language is understood to allow that structure to continue under OCC oversight. The OCC's recently proposed rule aligning with the GENIUS Act explicitly states it will not allow structures designed to bypass the yield prohibition for stablecoin issuers, while industry participants have confirmed that reward programs structured as customer incentives rather than yield payments can operate within the framework. Senators Angela Alsobrooks and Thom Tillis are co-authoring the final compromise text. The Senate Banking Committee has targeted April 3 as the next markup milestone. Beyond the stablecoin question, the CLARITY Act determines whether Bitcoin and other digital commodities fall under CFTC jurisdiction, resolving years of regulatory ambiguity. It passed the House 294-134 in July 2025 and has stalled twice in the Senate since. Prediction markets now price 70% 2026 passage odds (Polymarket) and 41% probability of a signature before June (Kalshi). The legislative window before the August recess, after which midterm campaigning effectively closes the Senate calendar, is approximately 14 weeks.

Impact: The CLARITY Act compromise is the most underappreciated catalyst in crypto markets as of this writing. Every major structural development this week -- the Fannie Mae mortgage product, the MSBT ETF filing, Kraken's Fed master account from Week 11 -- operates under a regulatory framework that the CLARITY Act would either confirm or restructure. Without CLARITY, every Bitcoin financial product in the US exists in a zone of legal ambiguity that limits the institutional mandates capable of accessing it. With CLARITY, US pension funds, endowments, and sovereign wealth vehicles operating under strict fiduciary compliance rules gain a statutory green light that advisors cannot currently give them. The stablecoin yield compromise is significant not just for stablecoin issuers like Circle. It represents the banking lobby accepting that the CLARITY Act will pass -- they have shifted from blocking to negotiating terms. That shift in posture is a material signal that the bill's passage is no longer an if but a when. For European ETP issuers including Bitcoin Capital, a passed CLARITY Act would remove the single largest barrier to the next wave of US institutional allocation and directly drive AUM growth in regulated Bitcoin products globally as cross-border capital responds to US regulatory clarity. The April 3 markup is the next scheduled test of whether the compromise holds.

Week 13 Summary: Rate Hike Fears, Fannie Mae's Crypto Mortgage Milestone, Morgan Stanley's MSBT, and the CLARITY Act Compromise That Nobody Noticed

Week 13 compressed more structural development into five days than any week since the ETF approvals in January 2024. The price action -- Bitcoin holding $69,000-$72,000 while bonds sold off globally and gold erased its war gains -- barely reflected the significance of what happened below the surface. Fannie Mae accepting crypto-backed mortgages means Bitcoin is now a recognized collateral asset in the US government-backed housing market. Morgan Stanley filing MSBT means the second wave of Bitcoin ETF distribution is being built through the world's largest advisor network. The CLARITY Act compromise means the banking lobby has stopped blocking and started negotiating. And all of it arrived in the same week that the global bond market priced in the possibility of a Fed rate hike for the first time in four years. The macro is noisy. The structural direction is clear.

• Bitcoin held $69,000-$72,000 as rate hike fears replaced rate cut hopes. CME FedWatch: April rate hike probability rose from 0% to 12% in one week. UK 10-year gilt above 5% for first time since 2008. US 10-year at 4.38%. S&P 500 down 5%+ since Iran war began; gold fell from $5,500 to $4,434 as real rates spiked. Bitcoin outperformed every major risk asset. BTC closed March 26 near $69,438. Fear & Greed Index at 37, up from extreme fear lows but still firmly in fear territory.
• Fannie Mae will accept crypto-backed mortgages for the first time. Coinbase and Better Home & Finance launched the product March 26; WSJ first reported. BTC or USDC pledged as down payment collateral -- no liquidation needed, no taxable event. Rates: 0.5-1.5% above standard 30-year. No margin calls from price drops; only trigger is 60-day payment delinquency. Only crypto on US-regulated exchanges qualifies. Fannie/Freddie back ~50% of all US mortgages -- their underwriting decisions set the industry standard. FHFA Director Pulte ordered the policy shift in June 2025.
• ETF flows deteriorated: ~$53.5M week ending March 20, $300-350M outflows March 26. Sharp deceleration from $767M (week ending March 13). Three-week inflow streak ended after FOMC reset sentiment. Rate hike repricing and Iran binary risk drove institutional risk reduction. March monthly flows still net positive overall. PCE (March 28) and March CPI (April 10) are next directional triggers for flows.
• Morgan Stanley filed MSBT, the first spot Bitcoin ETF issued directly by a major US bank. Amended S-1 filed March 20. NYSE Arca Form 8-A filed March 25. Bloomberg's Eric Balchunas: listing 'typically means launch imminent.' Coinbase custody, BNY Mellon admin, Jane Street / Virtu / Macquarie as APs, $1M seed. No fee disclosed. 16,000 financial advisors, $5.5T in client assets. Distribution reach exceeds every existing Bitcoin ETF issuer. Approval expected: late Q2 to early Q3 2026.
• CLARITY Act stablecoin yield compromise reached March 23 -- Senate markup targeting April 3. White House and Senate agreed on guardrails language for stablecoin rewards. Activity-linked incentives allowed; pure yield payments restricted -- the red line the ABA drew in early March. OCC proposed rule provides room for reward programs structured as customer incentives. Senators Alsobrooks and Tillis co-authoring final text. April 3 markup is next milestone. Polymarket: 70% 2026 passage odds. Kalshi: 41% by June. Banking lobby's core demand (no pure yield competition with deposits) was met.

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Outlook

Three catalysts compress into the next ten days. (1) PCE inflation on March 28: the Fed's preferred inflation measure. A PCE print in line with February's 2.8% annual level would deflate the April rate hike probability and likely reverse Week 13's ETF outflow trend. A print above 3.0% validates the hike narrative and sets up a genuinely adversarial April FOMC for risk assets. (2) Iran ceasefire trajectory: the five-day window Trump announced March 23 expires March 28, the same day as the PCE data. A credible ceasefire path removes the energy shock from the inflation equation and changes everything downstream. Iran's public rejection of the US 15-point proposal and ongoing military activity suggest the probability of a March 28 formal agreement is low, but even a de-escalation signal -- a reduction in attacks on Gulf shipping lanes -- would be read positively by oil markets. (3) CLARITY Act markup on April 3: the first Senate Banking Committee vote on the compromise text. A successful markup clears the bill toward a full Senate vote and moves institutional allocators one step closer to the compliance clearance they need to add Bitcoin mandates. A failed or delayed markup resets the timeline into election-year uncertainty.

Bull case: PCE in-line, Iran de-escalates, CLARITY Act markup advances April 3. Rate hike probability collapses back toward zero. Bitcoin breaks $72,000 with conviction, three-week ETF inflow streak resumes, and the narrative shifts from 'will the bear market end' to 'when does it end.'

Bear case: Hot PCE, Iran rejects ceasefire, markup delayed. April rate hike odds climb above 20%. Bitcoin loses $68,000 support, retests $65,000, and the rate hike thesis starts pricing into structural outflow pressure at the ETF level.

Base case: PCE slightly warm but not alarming, no formal ceasefire but reduced escalation, CLARITY Act markup proceeds. Bitcoin holds $68,000-$72,000 through end of March, closes Q1 positive for March, and positions for the April 10 CPI as the next decisive macro test. The structural architecture built this week -- Fannie Mae, MSBT, CLARITY Act compromise -- does not require a price breakout to matter. It is the foundation on which the next bull market will be built.

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This content is for informational purposes only and does not constitute financial or investment advice. Investing in digital assets involves significant risk, including the risk of total loss of capital. Past performance is not indicative of future results. Bitcoin Capital AG is registered in Switzerland and issues exchange-traded products (ETPs); it is not a licensed investment advisor.