Why Is the Crypto Market Down Today? FOMC, GENIUS Act, and More Shake Investor Confidence

The global cryptocurrency market is facing renewed turbulence, with the total market capitalization falling to $3.24 trillion, marking a 1.05% decline over the past 24 hours. Bitcoin (BTC), the bellwether for the digital asset sector, is struggling to maintain its footing above the crucial $104,000 level. Meanwhile, trading volumes are slowing, reflecting a cautious stance by traders and investors amid a series of macro and regulatory shocks.

As traders search for answers, one thing is clear: today’s selloff isn’t due to a single event. Instead, it’s a combination of regulatory shifts, macroeconomic uncertainty, and institutional developments reshaping sentiment across the digital asset landscape. Below, we break down the top five catalysts that explain why the crypto market is down and what might come next.

1. Coinbase Derivatives Moves Toward USDC-Based Futures Trading

In a landmark development for crypto derivatives, Coinbase Derivatives announced plans to begin accepting USD Coin (USDC) as collateral for U.S. futures trading beginning in 2026. This shift, enabled through a partnership with Nodal Clear, represents a significant change from the current system, which allows only fiat currency as collateral.'

Source: X

This move reflects Coinbase’s broader strategy to make crypto futures more accessible to institutional traders. However, the transition period and the broader regulatory environment surrounding stablecoins have created uncertainty, contributing to the cautious mood in the market today.

2. Trump’s Fed Critique Adds to FOMC Anxiety

Adding fuel to the fire, former President Donald Trump took direct aim at Federal Reserve Chair Jerome Powell ahead of today’s critical Federal Open Market Committee (FOMC) meeting. Trump labeled Powell “not a smart guy” and suggested the Fed would likely hold interest rates steady rather than cutting as some investors had hoped.

The crypto market, which often reacts sharply to interest rate expectations, has been especially jittery in the run-up to the Fed’s decision. Higher interest rates typically strengthen the dollar and reduce appetite for riskier assets, including cryptocurrencies. Today’s tension reflects broader worries that tight monetary policy could weigh on both traditional and digital markets, particularly during a fragile phase of global economic recovery.

3. Ripple-Backed XRP ETF Launches in Canada

While not directly tied to today’s price action, Canada’s 3iQ Corp. launched the country’s first XRP ETF (XRPQ) on the Toronto Stock Exchange, with direct backing from Ripple Labs. The ETF aims to give institutional investors regulated exposure to XRP without the complexities of direct crypto ownership.

Despite this milestone, XRP’s price slipped 2.67% to $2.14 over the past 24 hours, highlighting a common disconnect between positive product launches and short-term price movements in the current market environment. Nonetheless, the launch reinforces the growing institutional acceptance of cryptocurrencies, even amid short-term volatility.

4. JPMorgan Debuts JPMD Stablecoin on Public Blockchain

In a move signaling traditional finance’s deeper embrace of blockchain technology, JPMorgan Chase officially launched JPMD, a U.S. dollar deposit token, on the Base blockchain. Designed for institutional clients, the token aims to enable 24/7 settlement of transactions, offering an alternative to conventional stablecoins like Tether (USDT) and Circle’s USDC.

The significance of this development cannot be overstated. It marks one of the first times a major global bank has rolled out a stablecoin-like product on a public blockchain. Yet, the entry of such a large player into the stablecoin space has unsettled some traders, who are bracing for heightened competition and further regulatory scrutiny.

5. GENIUS Act Reshapes U.S. Stablecoin Landscape

Perhaps the most impactful news today is the passage of the GENIUS Act (Guaranteed Electronic Notes Issuance for Universal Stability Act) by the U.S. Senate in a decisive 68–30 vote. This landmark legislation introduces comprehensive regulations for payment stablecoins, including mandatory 1:1 dollar reserves, monthly audits to verify backing, and removal of stablecoins from the Securities and Exchange Commission (SEC)’s direct jurisdiction, shifting oversight toward banking regulators.

While the move provides much-needed clarity, the immediate market reaction has been negative as traders digest the potential compliance costs and operational shifts required for major stablecoin issuers. The act is widely viewed as a double-edged sword—offering regulatory certainty but also introducing stricter oversight that could reshape the competitive landscape.

Source: X

The Bigger Picture: Short-Term Crash or Long-Term Opportunity?

Today’s crypto selloff reflects a market in transition. On one hand, the combination of regulatory milestones, central bank signals, and institutional expansion points to a maturing sector. On the other hand, uncertainty around how these forces will play out in the near term is keeping traders on edge.

Former President Trump’s comments, in particular, underscore the increasingly political nature of financial markets. Meanwhile, developments like Coinbase’s USDC collateral plans, the XRP ETF launch, and JPMorgan’s deposit token reveal how deeply digital assets are becoming embedded in the fabric of global finance.

For seasoned investors, today’s price action might not signal a reason to panic. Instead, it could represent a recalibration phase as markets adjust to a rapidly changing environment. Institutional players continue to lay down infrastructure for the future of digital finance, and regulatory clarity—while initially disruptive—may ultimately provide the foundation for sustained growth.

Conclusion: Crypto Market Down But Far From Out

The question of “Why is the crypto market down today?” has no single answer. Rather, it’s the culmination of regulatory moves, political rhetoric, and macroeconomic shifts converging at once. The GENIUS Act, the FOMC’s looming decision, Trump’s criticisms, and big institutional developments are all contributing to the current volatility.

But as always in crypto, where there is risk, there is opportunity. Smart investors are watching not just the prices, but the trends: the rise of bank-issued stablecoins, the institutionalization of crypto derivatives, and the expansion of tokenized assets.

As we move forward, market participants will be closely monitoring the Federal Reserve’s next steps, the rollout of the GENIUS Act regulations, and the competitive dynamics between crypto-native firms and traditional banks entering the space. In the meantime, volatility is likely to remain a defining characteristic of the digital asset market.

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