Bitcoin fell to its lowest level in more than two weeks, slipping below $67,000 as broader market pressure triggered a wave of liquidations across crypto derivatives. Ether also declined sharply, nearing the $2,000 mark, reflecting widespread weakness across digital assets.

The downturn coincided with a broader sell-off in risk assets, including US equities. Futures tied to the Nasdaq 100 have dropped roughly 10% from their January highs, underscoring a shift in investor sentiment toward caution.

Macro Pressures Drive Risk-Off Sentiment

The latest market move comes amid rising geopolitical tensions and surging energy prices. Oil has climbed above $100 per barrel, fueled in part by ongoing conflict involving Iran, raising concerns about persistent inflation and slowing economic growth.

These macroeconomic pressures have contributed to a “risk-off” environment, where investors reduce exposure to volatile assets such as cryptocurrencies. As a result, crypto markets have moved in tandem with traditional financial markets, highlighting increasing correlation during periods of uncertainty.

$300 Million in Long Liquidations

A key driver of the sell-off has been the unwinding of leveraged bullish positions. Over the past 24 hours, nearly $300 million in long positions were liquidated, compared with just $50 million in short positions. This imbalance suggests that traders had heavily bet on rising prices, only to be caught off guard by the downturn.

The repeated liquidation of long positions, occurring multiple times over recent days, points to crowded bullish positioning that is now being flushed out. Analysts note that many traders had expected geopolitical tensions to push crypto prices higher, a narrative that has yet to materialize.

Altcoins Under Pressure

The sell-off has been even more pronounced among altcoins, with several tokens posting losses between 3% and 6%. Assets like XRP and Shiba Inu have seen increased shorting activity, reflected in rising open interest and negative funding rates in derivatives markets.

This shift suggests growing bearish sentiment, as traders position for further downside. Meanwhile, overall liquidity conditions remain thin, amplifying price swings and making the market more vulnerable to sharp moves.

Signs of Market Stabilization?

Despite the declines, some indicators suggest that panic has not fully taken hold. Volatility metrics for bitcoin and ether have continued to trend lower, indicating that traders are not yet pricing in extreme turbulence.

Options markets show increased demand for downside protection, with put options trading at a premium to calls. This reflects cautious positioning rather than outright capitulation, as investors hedge against further losses.

Isolated Bright Spots in the Market

Amid the broader downturn, a few tokens have shown resilience. Ondo stood out with gains tied to developments in tokenized exchange-traded funds, highlighting continued interest in real-world asset tokenization.

However, analysts caution that the overall market structure remains fragile. With macroeconomic uncertainty, declining liquidity, and persistent selling pressure, the crypto market could face further downside in the near term unless sentiment improves.

Tether has reportedly chosen KPMG to conduct the first full financial audit of its flagship stablecoin, USDT. The move marks a significant shift for the world’s largest stablecoin issuer, which has long faced scrutiny over the transparency of its reserves.

In parallel, Tether has engaged PwC to prepare its internal systems and controls ahead of the audit. This dual approach signals the company’s most serious effort yet to meet institutional-grade financial reporting standards.

Moving Beyond Reserve Attestations

Until now, Tether has relied on periodic attestations from third-party firms rather than a full audit. A comprehensive audit by a Big Four firm would go much further, examining not only reserves but also liabilities, internal controls, and financial reporting systems across the entire organization.

This deeper level of scrutiny has been a longstanding demand from critics and regulators. A full audit could provide greater assurance to investors and institutions that USDT is fully backed, potentially strengthening trust in the stablecoin’s role as a core piece of crypto market infrastructure.

Strategic Push Into the United States

The audit initiative comes at a pivotal time as Tether prepares for expansion into the United States under new regulatory frameworks, including the GENIUS Act. The company has already launched a compliant stablecoin product designed to align with these rules, signaling its intent to operate more directly within the US financial system.

USDT, with roughly $185 billion in circulation, plays a central role in global crypto markets and is a major buyer of US Treasury securities. This positions Tether at the intersection of digital assets and traditional finance, making regulatory compliance increasingly critical as the company scales.

Fundraising Plans and Market Position

Tether is also reportedly exploring a large fundraising round, potentially seeking between $15 billion and $20 billion at a valuation of up to $500 billion. However, investor concerns around pricing and regulatory risk have created some hesitation.

A successful audit could help address these concerns by improving transparency and demonstrating stronger governance. This, in turn, may enhance Tether’s appeal to institutional investors and support its expansion strategy.

Past Scrutiny and Industry Context

Tether’s push for a full audit follows years of questions about its reserve composition and disclosures. The company has previously faced legal challenges and regulatory scrutiny, including settlements with US authorities over past statements regarding its backing.

Despite these issues, USDT remains the dominant stablecoin by market capitalization, far ahead of competitors. Its widespread use as a trading pair and liquidity source makes it a foundational component of the crypto ecosystem.

By moving toward a full audit and engaging top-tier accounting firms, Tether is attempting to redefine its image, from a controversial market player to a more transparent and institution-ready financial entity. If successful, the effort could set a new standard for accountability in the stablecoin sector and reshape how regulators and investors view the industry.

Coinbase has partnered with Better Home & Finance Holding Co. to introduce crypto-backed mortgages, allowing borrowers to use digital assets as collateral for home purchases. The loans are structured as conforming mortgages backed by Fannie Mae, meaning they follow the same standards and protections as traditional home loans.

The product enables buyers to pledge assets such as Bitcoin or USDC instead of liquidating them for a down payment. This approach allows borrowers to retain ownership of their crypto holdings while avoiding potential tax liabilities associated with selling assets.

Addressing a Key Barrier to Homeownership

One of the biggest challenges for prospective homeowners is assembling a sufficient down payment. According to Better, a large portion of potential buyers are unable to purchase homes despite having assets in investments or savings vehicles.

By using crypto as collateral, borrowers can unlock liquidity without navigating complex tax events or selling long-term holdings. For example, a buyer purchasing a $400,000 home might struggle to produce a $40,000 down payment in cash, even if they hold sufficient value in crypto assets.

This structure aims to simplify the process by allowing Coinbase users to transfer their assets into a custody wallet managed in coordination with Better, while still maintaining ownership rights.

Loan Structure and Risk Management

The crypto-backed mortgages come with slightly higher interest rates than traditional 30-year loans, typically ranging from 0.5% to 1.5% above standard rates depending on the borrower’s profile. However, the structure includes features designed to reduce volatility-related risks.

Notably, the loans do not involve margin calls or collateral top-ups if the value of the pledged crypto declines. Market fluctuations alone will not trigger liquidation, offering borrowers greater stability compared to other crypto-backed lending products.

Collateral is only at risk if the borrower becomes delinquent on mortgage payments for an extended period, typically 60 days, aligning the structure more closely with conventional mortgage practices.

Expanding Access Beyond Wealthy Investors

Crypto-backed lending has historically been associated with high-net-worth individuals and wealth management strategies. However, this initiative is aimed at mainstream homebuyers, positioning it as a more accessible financial tool.

Executives at Coinbase described the product as a way to democratize access to homeownership, enabling individuals to leverage their digital assets similarly to how affluent clients use traditional securities as collateral.

Bridging Crypto and Traditional Finance

The partnership reflects a broader trend of integrating digital assets into traditional financial systems. By combining crypto collateral with regulated mortgage frameworks, Coinbase and Better are effectively bridging two previously separate financial ecosystems.

As housing affordability remains a challenge and digital asset ownership grows, crypto-backed mortgages could become an increasingly viable option for buyers. The initiative signals a shift toward using blockchain-based wealth not just for investment, but for real-world financial applications like homeownership.