Week 8, 2026

CPI cooled to 2.4%, Bitcoin spiked to $70K then faded back below $68,500, $133M in ETF outflows hit in a single day, and Abu Dhabi's sovereign funds disclosed a $1.04B IBIT position built into the dip.

Week 8 handed crypto bulls exactly what they needed - a softer CPI print - and the market squandered it in 48 hours. January CPI printed 2.4% year-over-year on February 13 (below the 2.5% consensus, down from December's 2.7%), and Bitcoin climbed 4.5% to briefly reclaim $70,000. By Monday, it had slipped back below $68,500 with 85 of the top 100 tokens in the red. The week's defining friction: U.S. spot Bitcoin ETFs shed $133 million on February 18 alone - $84.2M from BlackRock's IBIT, $49M from Fidelity's FBTC - extending a year-to-date AUM drawdown that has now erased $21 billion since January 1. The Crypto Fear & Greed Index held at 13 (extreme fear) - levels last seen in the 2022 bear market - as Bitcoin traded 46% below its October 2025 all-time high of $126,080. Beneath the surface noise, the week's structural signal came from Abu Dhabi: sovereign wealth funds Mubadala and Al Warda disclosed a combined $1.04 billion IBIT position systematically built through Q4's decline, while the Clarity Act advanced toward a July 2026 signing that would reshape U.S. crypto regulation at its foundation.

1. Bitcoin Jumps 6% on Softer January CPI - Then Gives It All Back by Monday

Headline: January CPI Prints 2.4% vs. 2.5% Forecast, Bitcoin Spikes 6% as Inflation Surprise Boosts Risk Appetite

On Friday, February 13, the U.S. Bureau of Labor Statistics released January CPI at 2.4% year-over-year - one tick below the 2.5% consensus forecast and down from December's 2.7%. Core CPI matched expectations at 2.5%. Bitcoin reacted within minutes of the 8:30 AM ET release, climbing from near $66,800 to $68,855 on Bitstamp as risk sentiment flipped. Total crypto market capitalization surged nearly 5% to $2.44 trillion. Ethereum climbed over 7.5% to reclaim $2,000. The 10-year Treasury yield fell to 4.05% - its lowest since early December - as Federal Reserve rate-cut expectations firmed. Bitcoin continued climbing through the weekend, touching $70,434 before stalling. By Monday February 16, the rally had completely unwound: Bitcoin back at $68,200, 85 of the top 100 tokens in the red, spot ETF outflows resuming. The CPI bounce lasted less than 48 hours.

Impact: One soft CPI print is a data point, not a regime change. The Federal Reserve will not cut rates until mid-2026 at earliest - Treasury Secretary Scott Bessent told reporters inflation is on track to hit 2% "in the middle of this year." Until that confirmation lands in hard data, crypto rallies remain vulnerable to reversal the moment sellers return. The market needs to see this print confirmed: February CPI on March 11 and the FOMC meeting on March 18 are the next material catalysts. A second consecutive undershoot would materially harden rate-cut odds and change the risk-asset equation.

2. Bitcoin ETF Outflows Hit $133M on February 18 - IBIT Sheds $84.2M as Institutional Selling Continues

Headline: BlackRock IBIT Records $84.2M Daily Net Outflow, Total U.S. Spot Bitcoin ETF Withdrawals Reach $133M on February 18

U.S. spot Bitcoin ETFs recorded $133 million in net outflows on February 18 - BlackRock's IBIT accounting for $84.2 million, Fidelity's FBTC contributing $49 million. One of the larger single-day outflow events of the month, arriving as Bitcoin consolidated in the mid-$60,000s. Year-to-date, U.S. spot Bitcoin ETFs have shed over $21 billion in AUM - from $116.7 billion at January 1 to $95.5 billion per CoinGlass. The math behind the selling is straightforward: the average cost basis for U.S. ETF holders sits around $90,200 per BTC. With Bitcoin at $68,000, the ETF investor base is collectively 25% underwater - which explains persistent redemption pressure better than any macro narrative. The week prior saw a brief $167 million inflow recovery on February 10 that didn't hold. IBIT options volume - which hit a record 2.33 million contracts during the early-February crash - now meaningfully feeds back into spot price through delta-hedging and margin-call dynamics, amplifying moves in both directions.

Impact: ETF outflows at this scale reflect tactical caution, not long-term abandonment of the asset class. The 12-month picture tells a different story: IBIT has attracted $21 billion in net inflows despite $2.8 billion in three-month outflows - the selling is concentrated among hedge funds and short-duration holders who bought above $90,000. CNBC's ETF Edge noted "long-term investors are not abandoning the asset class." The doom loop to monitor: IBIT outflows pressure Bitcoin lower, lower prices trigger more redemptions from underwater holders, which pushes prices lower again. That loop breaks when the ETF cost basis closes the gap with spot price - or when enough patient capital steps in to absorb it.

3. Abu Dhabi Sovereign Funds Reveal $1.04B Bitcoin ETF Position - Bought the Q4 Dip Systematically

Headline: Mubadala Raises IBIT Stake 46% in Q4 2025, Abu Dhabi Sovereign Funds Cross $1 Billion in Bitcoin ETF Holdings

SEC 13F filings submitted February 17 contained the week's most important data point: Abu Dhabi's Mubadala Investment Company held 12.7 million IBIT shares ($630.6M) at December 31, 2025 - a 46% increase from Q3's 8.7 million shares. Sister entity Al Warda Investments disclosed 8.2 million shares ($408.1M), up from 7.96 million in Q3. Combined: 20.9 million IBIT shares worth $1.04 billion at year-end. Mubadala manages $330 billion in total assets - this Bitcoin position represents less than 0.3% of the portfolio. These purchases were made as Bitcoin fell 23% through Q4 2025. The position's current value has since declined to approximately $800 million as 2026's selloff deepened. On the other side of the ledger: Harvard Management Company cut its IBIT stake by 1.46 million shares (~$56M) while simultaneously opening an $86M position in BlackRock's Ethereum ETF ETHA - a tactical rotation, not an exit from digital assets.

Impact: Sovereign wealth funds don't accumulate casually. Mubadala added nearly 4 million IBIT shares during a 23% Bitcoin decline - that is systematic conviction buying from an entity with a $330 billion AUM base and a decade-long investment horizon. This is not the capital driving current crypto market volatility. These are not the sellers. The 13F disclosure reshapes how we read the Bitcoin ETF holder base: it now includes state-backed sovereign capital that would never self-custody Bitcoin, would never panic at a bad news cycle, and systematically adds on drawdowns. The signal to watch: May 2026 13F filings will reveal whether Abu Dhabi continued buying into Q1's further decline - and whether other sovereign funds are quietly following.

4. Clarity Act Targets July 2026 - CFTC Set to Replace SEC as Primary Crypto Regulator

Headline: Two Major Crypto Regulations Dropping in Q2 2026: Clarity Act Targets July Signing, Genius Act Stablecoin Framework Goes Live

The Digital Asset Market Clarity Act is targeting a July 2026 signing, with Treasury Secretary Scott Bessent publicly backing the legislation this week. The bill transfers the bulk of crypto regulatory oversight from the SEC to the CFTC - a shift the crypto market views as structurally favorable. The SEC has spent years applying enforcement-by-enforcement ambiguity to digital assets. The CFTC operates with rules-based clarity. Simultaneously, the Genius Act (stablecoin law, signed July 2025) enters its implementation phase this summer, introducing formal reserve standards, auditing requirements, and issuance rules for stablecoins. Friction appeared this week: Coinbase stated it cannot support the Clarity Act as currently written, and bipartisan support showed cracks. The CFTC's CEO Innovation Council - 12 major exchange CEOs - is actively shaping the final framework ahead of potential passage.

Impact: CFTC oversight would be the single biggest structural change to U.S. crypto regulation since Bitcoin ETF approval in January 2024. It removes the legal fog that has kept institutional capital cautious about altcoins, DeFi infrastructure, and multi-asset crypto products. The stablecoin framework going live this summer could catalyze the wave of corporate stablecoin launches that was widely anticipated - and consistently delayed - throughout 2025. For Bitcoin Capital's clients, U.S. regulatory clarity validates the asset class globally and tends to unlock institutional capital into regulated vehicles across all geographies, including European ETPs. Any concrete floor vote date or bipartisan amendment announcement should be treated as a material catalyst for digital asset positioning.

5. Bitcoin Price Down 46% From ATH With Fear & Greed at 13 - Is $60,000 the Cycle Bottom?

Headline: Bitcoin Reclaims $70,000 After February Slide as CPI Data Lifts Risk Appetite - Fear Index Stays in Extreme Fear at 13

By February 19, Bitcoin was consolidating at $67,500-$68,300 - approximately 46% below its October 2025 all-time high of $126,080. The Crypto Fear & Greed Index sat at 13 - extreme fear territory last seen during the depths of the 2022 bear market. On-chain data from Checkonchain described February's $60,000 test as a "rapid capitulation event": net realized losses hit approximately $1.5 billion per day at the worst point - comparable to FTX-era sell pressure. Research firm K33 identified capitulation-like conditions across volume spikes, funding rate normalization, ETF flow patterns, and options positioning, flagging the $60,000 test as a potential local bottom. The Bitcoin-to-Gold ratio hit an 11-year low this week - Gold at $5,000/oz, Bitcoin stuck below $70,000 - a historic divergence that directly challenges the digital gold thesis. Bloomberg reported the largest put option cluster on Deribit targets sub-$60,000 levels, sitting just above the 200-week moving average at $58,000.

Impact: Extreme fear at these levels has historically preceded meaningful recoveries - but sentiment is a signal, not a timer. The $60,000-$58,000 band is now the market's defining level: hold it and the cycle-bottom thesis gains credibility; break it and the largest put option cluster triggers a fresh liquidation cascade toward $50,000. Bitwise CIO Matt Hougan told CoinDesk: "I know it's looking rough out there, but I still think the stars are aligned for 2026." The average ETF investor is currently 25% underwater - exactly the kind of pain that has historically marked the transition from weak-hand selling to strong-hand accumulation. The question is whether the structural buyers (Abu Dhabi sovereign funds, long-duration allocators) arrive fast enough to absorb the tactical selling.

Week 8 Summary: The Bull Signals Are Building - The Price Isn't Moving Yet

Week 8 told one story with two competing interpretations. The optimistic read: CPI beat expectations, Abu Dhabi's sovereign funds disclosed billion-dollar Bitcoin ETF accumulation built during Q4's decline, and regulatory clarity is advancing toward law. The pessimistic read: Bitcoin closed below $68,500 with the Fear & Greed Index pinned at 13, ETFs shed $133 million in a single day, and the rally off the CPI print evaporated inside 48 hours. Both reads are correct. The week's defining insight is structural: the sellers are tactical (ETF redemptions from holders 25% underwater on a $90,200 cost basis), and the buyers are structural (sovereign wealth funds with decade-long horizons accumulating on the dip). That imbalance resolves in favor of the structural buyer over time - but macro data, not crypto-native catalysts, sets the timeline.

Key takeaways:

• January CPI at 2.4% beat the 2.5% forecast and fueled a brief Bitcoin rally to $70,434 - but the gain evaporated within 48 hours as macro uncertainty returned. Next catalyst: March 11 CPI and March 18 FOMC.
• $133M in spot Bitcoin ETF outflows on February 18 (IBIT $84.2M, FBTC $49M) extends the year-to-date AUM drawdown to $21B. Average ETF cost basis of $90,200 explains the sell pressure - not long-term abandonment.
• Abu Dhabi's Mubadala and Al Warda disclosed a $1.04B combined IBIT position (Mubadala +46% QoQ) accumulated during Q4's 23% Bitcoin decline. Sovereign capital with 10-year horizons doesn't panic sell.
• Clarity Act targets July 2026 signing - transferring crypto oversight to the CFTC. Combined with Genius Act stablecoin implementation this summer, Q2-Q3 2026 may be the regulatory catalyst that unlocks the next wave of institutional flows into digital assets.
• Bitcoin at 46% below ATH with Fear & Greed at 13 - the $60,000-$58,000 band is the critical floor. Hold it: cycle-bottom thesis intact. Break it: fresh liquidation cascade toward $50,000.

Outlook

Three variables determine Bitcoin's trajectory into Q2 - and all three are in motion simultaneously.
(1) Can March 11 CPI deliver a second consecutive undershoot? That hardens rate-cut expectations and changes the risk-asset equation.
(2) Do weekly Bitcoin ETF flows turn net positive? Consecutive inflow weeks signal the tactical sellers have exhausted themselves.
(3) Does the Clarity Act advance with a floor vote date? Legislative progress could catalyze institutional positioning ahead of the regulatory shift. Bull case: all three turn positive, Bitcoin rallies to $85,000-$95,000 by Q2. Bear case: inflation re-accelerates, ETF outflows continue, Bitcoin breaks $60,000 toward $50,000. Base case: sideways consolidation between $62,000 and $75,000 through March as the market waits for macro confirmation, with direction ultimately set by the Fed's spring data and whether the Abu Dhabi-style accumulation continues at scale.