February 2026 - A Month in Review

State of the Market

Looking back on February, the wider macro market was bearish for risky assets. Ongoing political tensions led to oil and gas prices surging by over 15% to ~$70 USD a barrel.

In the U.S., inflation dropped to 2.4% but underlying goods and services prices slightly increased. The Fed rates remained steady with no indication of any rate cuts in the near future. Bond yields remain elevated, which brought pressure to speculative risky assets.

In the Eurozone, inflation dropped to 1.7% with Q4 GDP reporting surprising, beating expectations by 0.3%

Table 1: The Bond Yields of Key Sovereign Debt

Bitcoin Developments - Feb 05 Crash

At the beginning of February, the total crypto market cap was roughly $2.95 Trillion USD. At the end of the month this number reduced to $2.41 Trillion, a loss of 18.3% in total market cap. February marked the 5th consecutive month of negative BTC returns, a feat not recorded since the 2018 bear market.

On February 5, BTC lost 14% of its value in a single day, dropping from $73k to nearly $60k. This event was signifigant and shaped the rest of February, with the drop occurring while market makers and other participants pulled orders, no buyers, no short covering, leaving an empty order book. Resultingly, the Crypto Fear and Greed index dropped into deep "Extreme Fear" sentiment at 5 (Range from 0-100). In 24H, $1.1B in leveraged longs were liquidated, with this reaching $4.8B over the month.

Examining smart money in the table below, we observe that US Spot ETF holdings fell a mere 7% as the spot price dropped to levels over 50% below the All time high. This indicates to us that retail investors felt the brunt of this drop, whereas institutional capital held firm. Stablecoin supply increased over the month highlighting this capital rotation to safety.

Table 2: Crypto Asset Movement - February 2026

Ethereum Developments - 2026 Roadmap

In February ETH published its 2026 roadmap, offering an ambitious upgrade plan, the biggest in the chains history. The roadmap focussed on three main verticals: Scaling, Quantum Resistance and UX Improvement.

Scaling: In H1 2026 the "Glamsterdam" upgrade is to be pushed following the December Fusaka upgrade. Gas limits will be able to pass 100M, parallel execution enabled and an enshrined Proposer-Builder Separation. Following the Fusaka upgrade daily transactions neared 3 million.

Quantum Resistance: In late 2026 the Hegota upgrade aims to bring quantum resistant signatures, replacing ECDSA, tackling the quantum threat before it is realized.

Better UX: Third party relayers will be replaced with a native account abstraction, allowing smart contract wallets to become the chain default.

Despite a promising roadmap offering growth and improvement to the ETH community, ETH still dropped ~22% over the month. Daily active addresses surpassed 1 million and on-chain activity saw record levels. But yet the price still dropped, highlighting the correlation of major crypto assets to the movement of BTC.

Solana Developments - ATH Metrics

Over February, Solana saw record highs in on-chain statistics. The chain processed 3.4B transactions with $95B in DEX volume and 650B in stablecoin volume, more than 2x the previous record.

Institutional players also increasingly show faith in SOL, with Goldman Sachs disclosing a $108M position, BlackRock's BUIDL clearing $550M on-chain and Citigroup performing full trade finance lifecycles on SOL.

AI Agents are increasingly active on the chain, with autonomous AI systems generating independent economic activity on chain, including HFT, negotiation lending and yields and communicating with order books. With low fees and high speed, SOL is standing out as the optimal chain for such executions.

Regulatory Updates

On January 29, the U.S. announced "Project Crypto", a joint initiative between the SEC and CFTC to define and distinguish what assets are classified as securities, commodities and collectibles. The initiative also outlines a plan of unified enforcement and safe harbors for both DeFi developers and open-source builders. The CLARITY act has stalled and remains up in the air.

With MiCA rolled out effectively, the regulation is now in place and being actively enforced. The European Securities and Markets Authority (ESMA) is maintaining and updating a public register of authorized providers and stablecoin issuers.

Exchange (CEX) Updates

Crypto exchanges Binance, Coinbase and Kraken all launched competing tokenized stock (RWA) products. Coinbase partnered with Yahoo Finance to offer 24/7 tokenized stocks trading, while Kraken implemented tokenized perpetual futures for major indexes. RWA remains the key topic of the moment with volume steadily growing alongside major exchange rollouts.