The crypto landscape remains in a widespread bear market following months of consistent market sell-off driven by geopolitical tensions, macro settings, and a shift in structure. In February alone, the total market cap has dropped by 12%, extending the total decline from October 2025 to around 44.5%.
Interestingly, another geopolitical event has occurred in which the US Supreme Court has struck down the legality of trade tariffs imposed by President Donald Trump under IEEPA. In a QuickTake post on CryptoQuant, XWIN Research Japan highlights the potential implications of this development for the crypto market.
Tariff Impact On Crypto Assets Hinges On Implementation
On February 20, the US Supreme Court declared that the majority of the new tariffs imposed by Trump over the last year are illegal. The nation’s apex court clarified that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs; these taxes are being revoked, potentially those under Sections 232 and 301.
According to XWIN Research Japan, the crypto market has barely reacted to this development. This is an important observation as digital assets experienced significant losses in reaction to these tariff announcements during 2025, most notably on October 10. However, the analysts explain that any impact on crypto prices relies on liquidity, which further hinges on the legal processes and political implementation of the Supreme Court’s decision.
Notably, total tariff refunds from the US government are estimated between $40 billion and $170 billion. If the refunds proceed as instructed, liquidity will move from the US Treasury Account to the private business. This scenario is expected to improve companies’ cash flow and encourage investment and risk allocation.
However, it’s worth noting that a decline in government revenue could raise fiscal concerns, resulting in increased bond issuance. Eventually, there is heightened pressure on long-term bonds as investors push for higher yields.
Bitcoin Remains Liquidity Sensitive
XWIN Research Japan notes that the Supreme Court’s decision does not immediately create a “cash-hit-market” scenario. Hence, the lack of corresponding price action.
Data from the Bitcoin Exchange Netflow chart shows macroeconomic shocks have coincided with a surge in exchange inflows and a fall in price, reinforcing Bitcoin’s status as a liquidity-sensitive asset rather than a stable investment. Therefore, investors are advised to monitor indicators of this liquidity, including ETF flows. Stablecoin exchange inflows, Bitcoin exchange inflows, and the US dollar. At press time, the total crypto market is valued at $2.33 trillion, with total trading volume estimated at $103.2 billion.
