The Federal Reserve's Independence Crisis and the Awakening of the Korean Won: A Power Restructuring in the Crypto Market in 2026
This week's crypto market has been quite interesting, like a grand drama that started long ago but had a small audience. At the macro level, the battle has reached a fever pitch, but judging from the data, retail investors seem to be still reeling from the shock.
In today's article, I won't talk about those vague dreams of 100x returns. I'll just use solid data and logic to break down the seemingly chaotic market changes at the beginning of 2026.
Let's start with the most explosive news—the U.S. Department of Justice has launched a criminal investigation into Federal Reserve Chairman Jerome Powell. The reason given for the investigation is "misleading allegations regarding headquarters renovations," but Powell responded very strongly, stating directly that it is "political intimidation under the guise of the law."
Let me tell you, this isn't just a simple political drama; at its core, it strikes at the very foundation of the global financial system—the independence of the Federal Reserve. If a central bank governor can be subjected to legal repercussions for not complying with interest rate policies, then the "anchor" of the dollar's credibility will be completely shaken. It's precisely because of this sentiment of hedging against damage to the dollar's credibility that Bitcoin quickly stabilized at $92,000; this is the effect of its "neutrality" premium.
Even more noteworthy are the actions of institutional investors. Amidst the market turmoil, Wells Fargo quietly bought Bitcoin ETFs on dips. The signal couldn't be clearer: with cracks appearing in the traditional defense system of the Federal Reserve, institutions are already looking for truly reliable "digital safe havens."
Turning our attention to Asia, South Korea has finally made a significant move. After nine years, the South Korean Financial Services Commission (FSC) has finalized new regulations, officially allowing listed companies and professional investors to trade cryptocurrencies, overturning the ban that began in 2017.
Here are some key figures I need to clarify, all of which come from official FSC disclosures: eligible companies can invest up to 5% of their own equity annually; it is estimated that approximately 3,500 listed companies will be eligible to participate; in addition, due to the previous ban, the capital that flowed from South Korea to overseas crypto markets is valued at as high as 76 trillion won, which is approximately US$52 billion.
This means that the South Korean market is rapidly shifting from a purely retail investor structure to an institutional one. The previous chaotic "kimchi premium" will likely gradually transform into a game of institutional competition with greater international pricing power.
Another trend we can't overlook is the surge in Monero (XMR) this week, which briefly approached a high of $600, representing a monthly increase of nearly 35%. This reflects the market's instinctive pursuit of "absolute anonymity" under intense regulatory pressure.
However, in my Qinglan Crypto Classroom (qinglan.org), I consistently emphasize one point to my students: simply evading regulation has no future; the real breakthrough lies in "selective privacy." For institutions entering the blockchain space, the biggest obstacle isn't technology, but how to protect trade secrets while simultaneously meeting KYC/AML audit requirements. The "selective privacy" model, exemplified by Zcash, allows for the switching between transparent and masked addresses, disclosing information to authorized parties when necessary. This "controllable transparency" is the standard for future institutional applications.
There's also a very interesting divergence: on one hand, there are continuous positive macroeconomic factors and institutions are rushing into the market, while on the other hand, the number of views for Crypto-related content on YouTube has actually fallen to its lowest point since 2021.
This actually illustrates three things:
- First, retail investors are truly exhausted. After the debacle of as many as 11.6 million tokens becoming invalid in 2025, everyone's confidence in those low-quality meme coins has long been eroded;
- Second, noise is being cleared out. A decline in YouTube traffic is often a signal that speculative sentiment has reached its lowest point, but conversely, it may also be a sign that the market is entering a period of deep accumulation.
- Third, the market narrative is evolving. It's no longer about "watching a video and blindly buying in" as it used to be. Now, it's more about "looking at the logic and making in-depth investments."
Finally, a quick note about Ripple's actions: they are now using AI tools like Amazon Bedrock to optimize XRPL operations, improving monitoring by analyzing massive amounts of logs with AI, and even reducing their reliance on C++ expert experience.
Personally, I think that when blockchain technology starts to rely on AI to achieve self-healing and automated operation, the industry will truly move from the "laboratory stage" to the "industrial stage".
To summarize, the market in 2026 is no longer something those who only look at candlestick charts and ignore macroeconomics can navigate. The political maneuvering of the Federal Reserve, the policy deregulation in South Korea, and the evolution towards compliance in privacy technologies—these intertwined threads tell us one thing: crypto assets have transformed from "marginal disruptors" of the financial system into "core reconstructors."
I often tell people that in this market with so many variables, what's more important than "what to buy" is understanding "who sets the rules" and "how the rules are changing".
Stay rational, stay respectful, and see you next time.
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