Business News Daily: Global Markets Special Report
Friday, February 6, 2026
Safe Haven Demand Returns: Gold Rebounds While Tech and Equities Bleed
Global markets are reeling as a massive selloff in technology stocks and a "crypto winter" capitulation drive investors toward traditional safety. Gold prices climbed back toward \$4,880 per ounce on Friday, recovering from overnight lows of \$4,655. This rebound comes as major stock indexes continue a three-day decline; the S&P 500 and Nasdaq recently dropped 1.2% and 1.6% respectively. The volatility reached a fever pitch in Asia, where South Korea’s Kospi triggered an automatic "sidecar" trading halt after a plunge of more than 5%.
While gold remains roughly 13% below its January record of \$5,594, analysts from Bank of America and Goldman Sachs remain bullish, with price targets ranging from \$5,400 to \$6,000 per ounce for later this year. Conversely, silver remains highly volatile, sliding from January highs of \$120 to session lows near \$64, prompting the CME Group to hike margin requirements.
The Trillion-Dollar Rout: Big Tech’s AI Spending Crisis
Investor anxiety over artificial intelligence has reached a breaking point, wiping out over \$1 trillion in market value from major technology firms in a single week. The panic was fueled by massive capital expenditure projections:
- Amazon: Projected spending of \$200 billion for 2026, far exceeding the \$146 billion expected by Wall Street.
- Alphabet: Forecasted spending between \$175 billion and \$185 billion.
- Microsoft, Meta, and Nvidia: All saw shares decline as the collective "Magnificent Seven" (excluding Apple) signaled plans to spend \$650 billion on AI infrastructure this year.
The software sector is also under siege following the release of Anthropic’s Claude Cowork plugins, which threaten traditional data services. RELX saw its steepest decline since 1988 (14%), while Thomson Reuters suffered a record 16% single-day drop. Apple emerged as the sole winner, gaining 6% as investors favored its more disciplined \$13 billion capex approach.
Crypto Capitulation: Bitcoin Breaches \$60,000 as Institutional Exodus Accelerates
The cryptocurrency market is facing what analysts describe as a "structural shift" rather than a mere collapse. On February 5, Bitcoin investors realized a record \$3.2 billion in single-day losses, the largest such event in history.
- Price Action: Bitcoin briefly dipped below \$60,256, erasing all gains made since the November 2024 U.S. election.
- ETF Outflows: U.S. spot Bitcoin ETFs saw net outflows exceeding \$3 billion in January 2026 alone.
- Binance Counter-Move: Amid the crash, Binance completed its largest single purchase of Bitcoin for its Secure Asset Fund for Users (SAFU), acquiring 3,600 BTC worth \$250 million as part of a plan to convert \$1 billion in stablecoin reserves into Bitcoin.
Meanwhile, China has finalized its "total prohibition" of digital assets, reinforcing its ban on trading and mining while extending restrictions to real-world asset (RWA) tokenization. This coincides with the expansion of the digital yuan, which recorded 16.7 trillion yuan in transactions by late 2025.
Monetary Policy: ECB Holds Rates Steady Amid Euro Strength Fears
The European Central Bank (ECB) held interest rates at 2% for the fifth consecutive time. While President Christine Lagarde described the eurozone economy as "resilient," policymakers are divided. Latvian governor Martins Kazaks warned that a rapidly strengthening euro (which recently touched \$1.20) could lower inflation too far and trigger future rate cuts. Eurozone inflation fell to 1.7% in January, undershooting the 2% target.
Simultaneously, the European Commission is pushing to fortify the euro by encouraging the issuance of euro-denominated stablecoins and expanding joint EU debt. A consortium of twelve major banks, including BNP Paribas and Deutsche Bank, is already developing a euro-pegged stablecoin (Qivalis) slated for late 2026.
Automotive Industry: The \$55 Billion EV Reckoning
Global automakers are facing a massive financial reset, recording \$55 billion in writedowns as they scale back electric vehicle (EV) ambitions.
- Stellantis: Announced a record €22.2 billion (\$26 billion) impairment, admitting it overestimated the speed of the energy transition.
- Ford & GM: Recorded charges of \$19.5 billion and \$7.6 billion, respectively, with Ford canceling several all-electric models in favor of hybrids.
- Policy Impact: U.S. EV sales plunged 46% in Q4 2025 following the elimination of federal tax credits under the "One Big Beautiful Bill".
Energy & Commodities: Diplomacy in Oman and Strategic Ventures
- Oil Prices Decline: Crude oil prices dropped as high-stakes negotiations in Muscat, Oman, between the U.S. and Iran eased supply fears. Both Brent and WTI futures are on track for their first weekly decline in a month.
- Mercuria-Tata Joint Venture: Global trader Mercuria is forming a 51/49 joint venture with India’s Tata International. The partnership aims to build a scalable trading platform for metals, gas, and energy to serve India’s growing industrial base.
- Metals Frenzy: Chinese exchanges have made 38 emergency interventions in the last two months to curb "unprecedented" speculative retail trading in metals like tin and copper.
SoftBank’s \$30 Billion OpenAI Gamble
SoftBank Group is reportedly considering an additional \$30 billion investment in OpenAI, which would increase its stake in the ChatGPT creator to a level that could surpass Arm Holdings as its largest asset. Analysts warn this move could push SoftBank’s loan-to-value ratio to 35%, potentially triggering a credit downgrade unless the company offloads \$15 billion in other assets. This follows SoftBank's involvement in the \$500 billion Stargate Project to develop U.S. AI infrastructure.
SoftBank’s \$30 Billion OpenAI Ambition: A High-Stakes Bet Risking Credit Stability
SoftBank Group is currently evaluating a massive \$30 billion additional investment in OpenAI, a move that has led analysts to warn of a potential credit downgrade for the Japanese conglomerate,. This potential investment is reportedly part of a significant funding round intended to raise up to \$100 billion, which would value the ChatGPT creator at an estimated \$830 billion. SoftBank already secured an approximately 11% stake in OpenAI, valued at \$41 billion, following a record-breaking private funding round in December 2025.
Financial experts caution that doubling down on OpenAI could push SoftBank’s loan-to-value (LTV) ratio to 35%, significantly exceeding the company’s internal 25% threshold. Maintaining this balance may require at least \$15 billion in additional asset sales or margin loans to prevent a rating reversal. SoftBank has already undergone aggressive portfolio restructuring to fund its AI strategy, including the divestment of its entire \$5.8 billion Nvidia stake and \$9 billion in T-Mobile shares during 2025.
The company’s reliance on margin loans secured against shares of Arm Holdings has reached approximately \$18.5 billion. Analysts have highlighted a substantial funding gap, noting that SoftBank has committed roughly \$113 billion to investments despite having a funding capacity of only \$58.5 billion. If the new investment proceeds, OpenAI could surpass Arm as the firm’s largest single asset, representing more than 30% of its total portfolio value.
This financial gamble coincides with SoftBank's leadership in the Stargate Project, a \$500 billion initiative aimed at developing AI infrastructure across the United States in partnership with OpenAI and Oracle. Despite the risks of increased leverage, SoftBank CFO Yoshimitsu Goto underscored the firm's aggressive stance, stating that the "risk of not investing is far greater than the risk of investing".
Automotive Giants Retrench: \$55 Billion Wiped Out as EV Demand Stalls and Subsidies Vanish
Global car manufacturers are facing a massive financial reckoning, collectively recording approximately \$55 billion in writedowns over the past year. This significant retreat from aggressive electrification goals is being driven by a combination of slower-than-expected consumer demand, the sudden termination of U.S. federal subsidies, and the rapid global expansion of Chinese competitors.
Stellantis and Ford Lead Industry Losses
The scale of the crisis was highlighted this week by Stellantis, which announced €22.2 billion (\$26 billion) in charges, marking the largest EV-related impairment in the industry’s history. Stellantis CEO Antonio Filosa noted that the company overestimated the pace of the energy transition, which ultimately "alienated" them from the actual needs and financial capabilities of car buyers.
Other major players have reported similar hits:
- Ford: Announced \$19.5 billion in charges and canceled several future electric models, including the next-generation F-150 Lightning, in favor of hybrid alternatives.
- General Motors (GM): Disclosed total EV-related writedowns of \$7.6 billion, which includes \$4.2 billion dedicated to supplier settlements and contract cancellations.
- Porsche: Recorded a \$6 billion hit and has officially postponed its new electric vehicle platform until the 2030s.
Policy Shifts Spark Market Collapse
A primary catalyst for this downturn was the elimination of the \$7,500 U.S. federal EV tax credit on September 30, 2025. This change occurred after President Donald Trump signed the "One Big Beautiful Bill" into law. The impact was immediate and severe, with U.S. EV sales plunging 46 percent in the fourth quarter of 2025, reaching their lowest levels since late 2022.
The industry’s initial projections have proven to be wildly inaccurate; while automakers anticipated that EV penetration in the U.S. would hit 50% by 2030, actual market penetration was below 6 percent last month.
The Pivot to Hybrids and the Chinese Threat
As Western automakers scale back, they are increasingly pivoting toward hybrid technology and sophisticated internal combustion engines. Stellantis executives now believe that hybrids will become the preferred powertrain for American consumers. Meanwhile, Ford is shifting its focus toward smaller, more affordable electric models and repurposing its battery capacity for grid energy storage.
However, the "Big Three" and European manufacturers face mounting pressure from Chinese firms like BYD and Geely. These companies utilize advanced battery technology and competitive pricing to gain market share. Projections suggest that Chinese manufacturers will hold over 30 percent of the European EV market by 2026, a massive jump from just 8 percent in 2023.
Muscat Breakthrough: Oil Prices Tumble as U.S.-Iran Nuclear Talks Ease Middle East Tensions
Crude oil prices declined sharply on Friday following the conclusion of high-stakes nuclear negotiations between the United States and Iran in Oman. This diplomatic progress has provided a much-needed breakthrough, easing global fears of military conflict in a region critical to global energy supplies. The talks, held in Muscat with Omani mediation, signaled a significant de-escalation after weeks of tension had driven oil prices toward six-month highs.
Market Response and the Strait of Hormuz
Both Brent and West Texas Intermediate crude futures saw significant losses, marking their first weekly decline in more than a month. Prices have dropped over 3% from late January highs, which were originally sparked by threats of military action.
Market analysts emphasize that the diplomatic shift is alleviating concerns regarding the Strait of Hormuz, a narrow waterway through which approximately one-fifth of global oil passes every day. Investors are now closely monitoring the potential for continued diplomacy to prevent disruptions to exports from Saudi Arabia, Kuwait, Iraq, and the United Arab Emirates.
Negotiation Details and Key Figures
The indirect discussions involved high-ranking officials from both sides:
- Iran: Led by Foreign Minister Abbas Araghchi.
- United States: Represented by Middle East special envoy Steve Witkoff, Jared Kushner, and Admiral Brad Cooper of U.S. Central Command.
While Araghchi characterized the discussions as a "good start" based on mutual respect, the path to the table was difficult. The venue was moved from Turkey to Oman at Tehran’s request to ensure a more private dialogue. Despite the positive tone, a major divide remains: the U.S. seeks to address Tehran’s ballistic missile program and regional proxies, while Iran maintains that negotiations should remain strictly limited to nuclear issues,.
Future Outlook and Economic Fundamentals
Although the "Muscat diplomacy" has calmed current markets, long-term uncertainty remains. While both nations expressed a willingness to continue dialogue, no date has been set for future rounds.
Furthermore, some analysts at Capital Economics suggest that geopolitical relief may eventually be overshadowed by weak market fundamentals. They point to recovering oil production in Kazakhstan as a factor that could potentially push prices down to \$50 per barrel by the end of 2026, regardless of the diplomatic outcome.
Bitcoin Plunges as Investors Realize Record \$3.2 Billion Loss, Sparking Fears of New 'Crypto Winter'
In a historic wave of panic selling, Bitcoin investors locked in a record \$3.2 billion single-day loss on February 5, 2026, marking the largest loss-taking event in the history of cryptocurrency,. According to the sources, the scale of this capitulation surpassed previous major market shocks, including the FTX bankruptcy and the Luna collapse.
The digital asset suffered its most turbulent session in years, plunging as much as 17% on Thursday to breach the critical \$60,000 level. This crash effectively erased all market gains accumulated since the November 2024 U.S. presidential election. By the evening, Bitcoin briefly touched a low of \$60,256 before seeing a slight recovery, though it remains down nearly 50% from its all-time high of \$126,080 reached in October 2025,.
Liquidity Crisis and Institutional Outflows The severity of the decline was significantly intensified by deteriorating market conditions. Market depth—the capital available to absorb large trades—has fallen more than 30% below its peak from late last year, reaching levels not seen since the aftermath of the FTX collapse in 2022.
Institutional sentiment also appears to be cooling rapidly. U.S. spot Bitcoin ETFs recorded \$434 million in net outflows on Thursday alone, with BlackRock’s iShares Bitcoin Trust accounting for \$175 million of those withdrawals. This follows a broader trend of sharp liquidity drains that saw over \$1.5 billion exit the market earlier in the week.
A Structural Shift in Market Dynamics Analysts noted that, unlike previous crashes tied to specific scandals or "black swan" events, this downturn appears to stem from deeper structural fragility. Antonio Di Giacomo, a senior market analyst at XS.com, observed that Bitcoin has undergone a "structural shift," noting it is no longer functioning as a safe-haven asset and has instead realigned with traditional risk-asset cycles.
Adding to the bearish outlook, noted investor Michael Burry warned of "sickening scenarios," suggesting that Bitcoin could slide further into the low \$50,000s. Burry indicated that continued declines could even push cryptocurrency mining companies toward bankruptcy. As the market attempts to find its footing, analysts are now closely monitoring the \$58,000 to \$60,000 range as the next critical area of support.
Big Tech Faces Trillion-Dollar Selloff as Massive AI Spending Sparks Investor Alarm
Major technology stocks have plummeted, wiping out more than \$1 trillion in market value as investors react with growing concern to the aggressive artificial intelligence spending plans of industry giants. The selloff has been fueled by earnings reports revealing capital expenditure commitments that far exceed Wall Street’s expectations, leading to a sharp retreat in the tech-heavy Nasdaq 100 index.
Spending Surges Beyond Analyst Estimates
The market rout intensified after Amazon projected capital expenditures of approximately \$200 billion for 2026, a figure that "shocked" analysts who had anticipated a more modest \$146 billion. This followed a similarly outsized announcement from Alphabet, which forecast spending between \$175 billion and \$185 billion for the same period—more than double its previous year's investment. Collectively, the four largest tech firms, including Microsoft and Meta, are now expected to channel roughly \$650 billion into AI infrastructure this year alone.
Software and Services Under Siege
The volatility has extended beyond the "Magnificent Seven" to the broader software and professional services sectors. The release of Anthropic’s Claude Cowork plugins has triggered fears that traditional data analytics and legal service business models are being disrupted. Consequently, industry stalwarts have seen historic declines; Thomson Reuters suffered a record 16% single-day drop, while Britain’s RELX experienced its steepest decline since 1988. Analysts suggest that investors are "aggressively repricing" these sectors as the historical "visibility premium" once enjoyed by these firms begins to erode.
Apple Emerges as a Disciplined Exception
In stark contrast to its peers, Apple has emerged as the week’s sole winner, gaining approximately 6% in share value. Investors appear to be rotating toward the iPhone maker due to its more disciplined AI spending approach, with a projected 2026 capital expenditure of just \$13 billion—a small fraction of the budgets set by Amazon or Alphabet. Bolstered by what CEO Tim Cook described as "staggering" demand for the iPhone, Apple has reclaimed its position as the world’s second-most valuable company.
Retail Speculation Triggers Global Metals Frenzy; Chinese Exchanges Intervene 38 Times
Global commodities markets are grappling with an unprecedented surge in speculative metals trading that has forced dozens of emergency interventions across two continents. Traditionally dominated by institutional players, markets from Shanghai to Chicago have been transformed into arenas of extreme volatility as retail investors, coordinated via social media, drive trading volumes to record-breaking levels.
Regulatory Crackdown in Asia
In an effort to maintain stability, China’s Shanghai and Guangzhou Futures Exchanges have collectively adjusted margins and tightened regulations 38 times over the last two months. These interventions followed extraordinary activity where daily tin transactions exceeded one million metric tons—more than double the annual global physical consumption. Chinese authorities have prohibited certain high-frequency trading firms from entering the market and warned individual traders against "blindly following the trend". In December alone, the turnover for base metals, gold, and silver on Chinese exchanges reached a staggering 37.1 trillion yuan (\$5.3 trillion).
The Rise of the "Social Media" Trader
The current frenzy is heavily fueled by retail investors connecting through WeChat groups in China and Reddit forums like WallStreetBets in the West. According to Bank of America, silver-related posts on Reddit surged to 20 times the five-year average. This digital coordination led to a record \$1 billion inflow into silver funds in January, with the iShares Silver Trust seeing single-day inflows nearly double the record set during the 2021 "silver squeeze".
Unprecedented Volatility and Price Peaks
Silver has emerged as the most volatile asset in this cycle, hitting an all-time high of \$121.6 per ounce on January 29. However, the peak was followed by a 25% plunge in a single session, marking the largest one-day fall since 1982. Gold also reached a record high of \$5,608.35 in January before retreating.
Future price projections remain deeply divided:
- AI-driven forecasting models suggest gold could reach \$10,000 per ounce by mid-year.
- Major banks like JPMorgan Chase have set more conservative year-end targets of \$6,300.
Western Exchanges Adapt to "Micro" Demand
The CME Group has seen its metals average daily volume increase by 218% year over year. To manage the heightened price risk, the exchange has raised margin requirements three times since mid-January, transitioning from dollar-based to percentage-based margin calculations to ensure adequate collateral.
To accommodate the specific needs of individual investors, CME reported massive growth in smaller contracts; Micro Gold futures jumped 472%, while Micro Copper volumes surged from 369,000 lots in December to 969,000 in January. Additionally, the exchange plans to launch 100-Ounce Silver futures on February 9 to specifically meet record retail demand.
Binance Acquires \$250 Million in Bitcoin to Bolster SAFU Emergency Fund During Market Downturn
Binance has completed its largest single acquisition of Bitcoin, purchasing 3,600 BTC valued at \$250 million for its Secure Asset Fund for Users (SAFU). This move is part of a broader strategic initiative announced on January 30 to transition the fund's \$1 billion reserve from stablecoins into Bitcoin within a 30-day window.
Accumulation Amid a Market "Bloodbath"
The exchange is aggressively accumulating the flagship cryptocurrency even as Bitcoin faces one of its sharpest price corrections in recent history. Since reaching an all-time high of over \$126,000 in October 2025, Bitcoin has plummeted nearly 50%, briefly dropping below the \$61,000 mark on Thursday. The market has seen a loss of over \$500 billion in value within a single week, exacerbated by institutional ETF outflows exceeding \$3 billion in January and forced liquidations totaling \$2 billion.
Progress Toward \$1 Billion Conversion Goal
With the most recent purchase, Binance’s SAFU holdings have reached 6,230 BTC, worth approximately \$412 million. This transaction marks the third major purchase in February, following two separate \$100 million acquisitions on February 2 and February 4. To date, the exchange has completed more than 40% of its stated conversion goal, with roughly \$570 million in reserves still scheduled for conversion before the March deadline.
The Role of SAFU
Originally established in 2018, the SAFU acts as an emergency insurance fund designed to compensate users in the event of system failures or security breaches. The fund is primarily financed through a portion of Binance's trading fees. The exchange maintains a strict policy to ensure user protection, committing to replenish the reserve back to \$1 billion should market volatility cause the fund’s total value to drop below \$800 million.
Market Sentiment and Strategic Outlook
Binance officials have described the move as a "statement of conviction," asserting that the exchange is embracing market cycles and supporting the industry during the drawdown. While analysts from Deutsche Bank have noted that consistent selling suggests traditional investors may be losing interest in the asset class, Binance’s ongoing purchases are providing visible on-chain spot demand. Traders are closely monitoring these inflows, as the remaining \$570 million in scheduled purchases may provide near-term price support for Bitcoin as the conversion continues.
ECB Weighs Rate Cuts as Strengthening Euro Threatens Inflation Target
FRANKFURT – The European Central Bank (ECB) is facing mounting pressure to consider interest rate cuts as a surging euro threatens to push inflation significantly below the bank's 2% target. Following a meeting on February 5 where rates were held steady at 2% for the fifth consecutive time, policymakers are now grappling with how a stronger currency might undermine the eurozone's economic recovery.
Inflation Undershoots as Currency Gains Momentum
Eurozone inflation cooled to 1.7% in January, marking a one-year low and falling short of the ECB’s stability goal. While ECB President Christine Lagarde noted that the Governing Council has discussed recent exchange rate fluctuations, she characterized the euro’s current trading range as "very much in line with average".
However, other officials are expressing heightened concern. Governing Council member Martins Kazaks warned that a "significant and rapid strengthening" of the euro could damage the inflation outlook by eroding economic competitiveness and slowing activity. Kazaks suggested that such a shift would likely trigger a "policy response" from the central bank.
The Role of the U.S. Dollar and Tariffs
The euro’s recent ascent, which saw the EUR/USD pair briefly touch \$1.20 in late January, is largely attributed to broader U.S. dollar weakness. Analysts point to concerns regarding U.S. economic credibility and uncertainty surrounding President Trump’s tariff measures as primary drivers for the dollar's decline.
President Lagarde cautioned that global trade tensions could further suppress inflation if tariffs diminish demand for eurozone exports or if nations with surplus capacity begin redirecting their exports into the euro area.
Divided Outlook on Future Rate Path
Market experts are increasingly debating whether the ECB's next move will be a pivot toward easing:
- ING Analysts: Argue that if the ECB shifts its current stance, the "first move would be a cut, not a hike".
- Bank of America: Foresees potential rate cuts in September or December 2026 if the inflation undershoot persists.
- Ebury: Analyst Roman Ziruk warned that rapid appreciation lowers import prices to a "non-negligible extent" while simultaneously hurting exporters.
- Deutsche Bank: Remains more conservative, projecting that rates will hold at 2% through 2026, with a potential hike only arriving in mid-2027.
While the ECB’s survey of professional forecasters expects inflation to return to 2% by 2027, the immediate "spectre of rate cuts" remains a focal point for investors as the bank monitors the impact of the euro's appreciation on the broader economy.
EU Proposes Bold Strategy to Bolster Euro via Digital Assets and Expanded Joint Debt
Eurozone finance ministers are set to meet on February 16 to deliberate a strategic roadmap aimed at strengthening the euro’s global role and enhancing Europe’s economic security. According to a European Commission document, the bloc is being urged to issue euro-denominated stablecoins and significantly expand joint EU debt to navigate a global landscape marked by trade tensions and the "escalating weaponization" of the international financial system.
The Push for Digital Sovereignty
Currently, the euro serves as the world's second-largest reserve currency, holding a 20% share of global reserves compared to the U.S. dollar's 60%. The Commission argues that increasing this share would improve global financial stability and allow the EU to implement sanctions policy more effectively.
A key component of this strategy involves the development of euro-denominated digital assets, including tokenized deposits and central bank digital currencies. The market for euro stablecoins is currently underserved, totaling just €395 million—a stark contrast to the broader \$280 billion stablecoin market capitalization dominated by the dollar. In a major private-sector move, BBVA and eleven other major banks, including Deutsche Bank and BNP Paribas, have formed the Qivalis consortium to launch a euro-pegged stablecoin in the second half of 2026.
Expanding Joint Debt and the ESM
To increase the euro’s attractiveness to large investors, the Commission advocates for expanding the joint EU debt market. At present, the EU has roughly €1 trillion in outstanding joint debt, which lacks the liquidity of the \$27 trillion U.S. debt market.
The proposal includes:
- Financing more joint EU projects through debt.
- Encouraging non-eurozone governments and businesses to issue debt in euros.
- Transforming the European Stability Mechanism (ESM), the bloc’s €500 billion bailout fund, into a formal EU institution that would function as a centralized debt agency.
While some economists suggest these moves could reduce borrowing costs across the eurozone, Germany and several northern European nations remain skeptical of expanding joint debt obligations.
ECB Alignment and Global Outreach
The Commission’s proposal aligns with a reform checklist to be presented by ECB President Christine Lagarde on February 12. Lagarde’s priorities include completing the banking and capital markets unions and the adoption of the digital euro to boost competitiveness. Furthermore, the euro’s global prominence may be bolstered by the ECB extending bilateral liquidity arrangements to countries outside the EU, an initiative the central bank is reportedly already pursuing.
Global Commodity Powerhouse: Mercuria and Tata International Announce Strategic Joint Venture
Mercuria Energy Group and Tata International have officially announced the formation of a joint venture designed to expand Mercuria's presence in India while enhancing Tata’s trading capabilities across various commodities. Under the terms of the agreement, Swiss-based Mercuria will hold a 51% majority stake, with Tata Group entities retaining the remaining 49%. The commencement of operations is currently pending necessary regulatory approvals.
Strategic Synergy and Global Reach
The partnership aims to leverage Mercuria’s global expertise in energy and commodities alongside Tata International's extensive network, which currently spans 50 countries. The venture is particularly beneficial for the Tata Group’s diverse interests in steel, infrastructure, automotive, and aerospace, as these sectors require significant quantities of natural resources—such as metals and gas—that Mercuria is equipped to supply.
Noel Tata, chairman of Tata International, stated that the merger of these two entities is intended to create a "robust, scalable, and compliant trading platform". Mercuria CEO Marco Dunand further emphasized that India represents an "attractive long-term prospect" for global trade.
Background and Industry Trends
Mercuria, founded in 2004 and headquartered in Geneva, is ranked as one of the world's five largest independent energy traders, with operations in over 50 countries. While initially focused on oil, it has since diversified into metals, natural gas, power, and agricultural products.
The formation of this venture follows reports from September 2025 indicating that Tata International sought a ₹1,000 crore capital infusion from Tata Sons to address balance sheet pressures caused by geopolitical headwinds and market volatility. Tata Sons currently holds a 61.67% stake in Tata International.
Noel Tata is set to lead the joint venture, which reflects a growing industry trend toward alliance-driven growth models as a means to build resilience against global supply chain disruptions and commodity market fluctuations.
China Implements "Total Prohibition" on Digital Assets and Mining, Targeting Real-World Asset Tokenization
In a major regulatory escalation, the People's Bank of China and seven other ministries have issued a joint circular to further tighten restrictions on virtual currencies, effectively extending the nation's prohibitive stance to include real-world asset (RWA) tokenization. Under the new directive, virtual currencies are declared to have no legal status equivalent to fiat, and all related business activities are categorized as "illegal financial activities" to be resolutely banned.
A Comprehensive Crackdown on Digital Markets
The sources describe this move as China’s most sweeping action against digital assets since 2021. The crackdown explicitly targets major tokens, including Bitcoin, Ethereum, and Tether, stating they cannot be used as currency in the market. The policy’s reach is extensive, encompassing the following:
- RWA Tokenization: Onshore issuance and trading of tokenized real-world assets are prohibited without explicit approval, and offshore entities are barred from offering these services to mainland users.
- Institutional Prohibitions: Financial institutions and payment providers are now forbidden from opening accounts, transferring funds, or providing custody and insurance for any products linked to virtual assets.
- Internet Restrictions: Online platforms are prohibited from providing marketing, "traffic-buying," or paid promotions for any cryptocurrency services.
Renewed Campaign Against Mining
Despite previous bans, China has remained a significant player in the global crypto landscape, estimated to account for 14% to 20% of the global Bitcoin hashrate. To combat this, the new circular mandates that provinces identify and shut down all existing mining projects while strictly prohibiting any new capacity. Analysts suggest this transition marks a shift from episodic crackdowns to a "durable, high-pressure regime" intended to eliminate any remaining "grey zones" for crypto experimentation.
The Rise of the Digital Yuan and Regional Divergence
As the mainland closes its doors to private digital assets, it is aggressively expanding its state-backed digital yuan (e-CNY). Effective January 1, an upgraded framework transitioned the e-CNY from a cash-like instrument into digital deposit money integrated with the banking system. The scale of this adoption is significant; by late November 2025, cumulative transactions reached 16.7 trillion yuan.
Interestingly, this rigid stance stands in sharp contrast to the regulatory environment in Hong Kong. While the mainland enforces a total ban, Hong Kong is advancing legislation to regulate dealers and custodians, with plans to issue its first batch of stablecoin licenses by March. This divergence highlights a unique "two-track" approach within Chinese territories, where the special administrative region continues to license virtual asset trading platforms even as the mainland implements a total prohibition.
ECB Maintains 2% Rate Amid Internal Friction Over Euro Strength and Dipping Inflation
The European Central Bank (ECB) has opted to keep interest rates steady at 2%, marking the fifth consecutive pause in its current cycle. This decision comes as the Governing Council navigates a complex economic landscape defined by a strengthening euro and inflation figures that have recently slipped below the bank's target.
Inflation Dips Below Target The rate decision coincides with new data showing Eurozone inflation eased to 1.7% in January, down from 2% in December and reaching its lowest point since late 2024. This cooling was largely driven by a 4.1% decline in energy prices, while services inflation also moderated to 3.2%. Despite the dip, President Christine Lagarde signaled that the bank would remain patient, stating they "cannot be hostage to one data point" and noting that the ECB had already projected such an undershoot through 2026.
Debate Over Euro Strength A significant point of contention among policymakers is the recent appreciation of the euro, which briefly surpassed \$1.20 last month. While the ECB does not officially target exchange rates, the currency's strength has created a rift in the Governing Council:
- Dollar Weakness vs. Euro Strength: Austrian central bank governor Martin Kocher suggested the shift is less about euro strength and more about weakness in the U.S. dollar, which he hinted might be "politically desired".
- Competitiveness Concerns: Conversely, Latvian governor Martins Kazaks warned that a rapid rise in the euro could weaken competitiveness and economic activity, potentially forcing the bank to respond if the inflation outlook is further suppressed.
Economic Outlook and Future Path Despite geopolitical tensions and trade uncertainty, the ECB described the eurozone economy as "resilient," supported by 0.3% growth in the fourth quarter of 2025 and a 6.2% unemployment rate.
Looking ahead, financial markets do not anticipate any rate movements through 2026. Lagarde maintained a data-dependent approach, emphasizing that the bank is not pre-committing to a specific path, though she noted that the next move—whenever it occurs—would likely be a rate cut rather than a hike.
Bitcoin Rebounds to \$60,000 as Massive Institutional ETF Exodus Tests Market Conviction
Bitcoin recently experienced a brief drop to \$60,000, its lowest price level since October 2024, following a sustained period of aggressive institutional selling. The cryptocurrency has now declined more than 50% from its record high of approximately \$126,000 reached in October 2025, effectively erasing all market gains accumulated since the November 2024 U.S. presidential election.
Record Outflows Sweep the ETF Sector
Data indicates a dramatic reversal in institutional sentiment. U.S. spot Bitcoin exchange-traded funds (ETFs) recorded net outflows exceeding \$3 billion in January 2026. This follows roughly \$7 billion in withdrawals in November 2025 and \$2 billion in December, marking the longest sustained outflow streak since these investment vehicles were launched in early 2024.
The selling pressure has been particularly intense for major funds:
- BlackRock’s iShares Bitcoin Trust (IBIT): On February 2, the fund recorded its largest single-day outflow since launch at approximately \$528.3 million, despite seeing a record trading volume of \$10 billion. On a single Wednesday, it accounted for \$373.44 million of the total \$544.94 million in net outflows across the ETF complex.
- Fidelity and Grayscale: Both FBTC and Grayscale products have also faced substantial redemptions as investors pull back.
Market Sentiment and Consumer Adoption
Analysts from Deutsche Bank have characterized the current downturn as a "loss of conviction rather than a market collapse". This waning interest is mirrored in the retail sector, where U.S. consumer crypto adoption has reportedly dropped to 12% in early 2026, a significant decline from 17% in mid-2025.
The persistent redemptions have created a "feedback loop," where forced selling by ETF sponsors to meet redemptions pushes prices down, subsequently triggering more risk-management selling from other holders.
A "Shake-Out" Rather Than an Exit
Despite the grim figures, some market observers believe the capital is not leaving the crypto space entirely but is instead rotating within the ecosystem. While Bitcoin funds bleed capital, parallel inflows have been noted in Ether, XRP, and Solana ETFs, suggesting institutional repositioning.
Market analysts tracking these fund flows suggest that the current structure points to a "shake-out phase" rather than the end of a market cycle. While the \$60,000 support level has been tested, the market remains in a period of high volatility as it navigates this institutional transition.
Gold Rebounds to \$4,880 as Global Markets Shaken by Equity Selloff and AI Concerns
Gold prices climbed back toward \$4,880 per ounce on Friday, February 6, recovering from overnight lows near \$4,655 as investors sought safety amid a massive global market downturn. The rebound marks a shift toward risk-off sentiment as major stock indexes extended a three-day losing streak and cryptocurrencies plunged to multi-year lows.
Global Equities and Tech Under Pressure
The selloff has been driven by mounting concerns over artificial intelligence investment spending and evidence of a weakening labor market. In the U.S., the Nasdaq Composite recently recorded its worst two-day decline since April, while the S&P 500 fell 1.2% on Thursday.
The turmoil was even more pronounced in Asia, where South Korea’s Kospi index triggered an automatic "sidecar" trading halt after a plunge of more than 5%. Major tech leaders were hit hard, with Samsung Electronics and SK Hynix dropping 3.8% and 4.5% respectively.
Precious Metals Diverge as Silver Crashes
While gold has shown resilience, it remains approximately 13% below its record high of \$5,594.82 set on January 29. In contrast, silver has faced a "punishing slide," dropping from over \$120 per ounce in late January to session lows around \$64. This extreme volatility led the CME Group to raise margin requirements for precious metals contracts. Analysts at Goldman Sachs have advised caution regarding silver, noting that limited supply in the London market is intensifying price swings.
Interest Rates and Future Outlook
The shift in the market coincides with weakening U.S. labor data, which has heightened expectations that the Federal Reserve will implement at least two 25-basis-point rate cuts in 2026.
Despite current market instability, major investment banks maintain a bullish long-term outlook for gold:
- Bank of America: Targeting \$6,000 per ounce in the coming months.
- Goldman Sachs: Reiterated a \$5,400 per ounce target for the end of 2026, supported by central bank accumulation and ETF purchases.
- ING: Analysts suggest that while short-term volatility will persist, gold is likely to rise at a steadier pace rather than repeating the "explosive growth" seen in previous months.
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