TP ICAP’s Hina Sattar Joshi Warns BTC Cycle Narrative Is Driving Fragile Crypto Sentiment
BTC’s latest volatility is reinforcing a familiar theme in digital asset markets: despite institutional growth and expanding infrastructure, investor behaviour remains heavily anchored to cyclical narratives. According to Hina Sattar Joshi, Director at TP ICAP, Digital Assets, the sharp swings viewn recently reflect a market still struggling to detach itself from the psychological pull of the traditional BTC four-year cycle.
Joshi said market sentiment remains fragile, with participants continuing to interpret price action through the lens of BTC’s historical pattern of rapid rallies followed by deep corrections. That reflexive positioning is amplifying short-term volatility as traders react to narrative-driven expectations rather than underlying structural changes in liquidity and adoption.
“The recent sharp swings in crypto prices underscore how the market’s infrastructure is still evolving and its impact on volatility,” Joshi said. “Sentiment is currently very fragile, with investors anchoring themselves to the traditional four-year BTC cycle, in which BTC’s price historically follows a recurring pattern of ‘boom and bust’.”
ETF Flows Signal Rotation Rather Than Capital Flight
While recent price declines have triggered renewed concern about whether institutional capital is retreating, Joshi said the evidence points instead to a recalibration of risk appetite inside the asset class. She highlighted diverging flows across platform-traded products, with BTC-linked funds viewing withdrawals while other major assets attracted fresh interest.
“We’ve viewn over the past couple of weeks BTC ETFs experiencing significant outflows, while ETH and XRP products have attracted notable inflows,” she said. “This trend points to a rotation in risk appetite, rather than a mass exit from the asset class.”
The divergence suggests that institutional investors are increasingly treating crypto as a multi-asset universe rather than a single BTC-centric trade. As liquidity deepens across ETH and other large-cap digital assets, allocation decisions are beginning to resemble broader portfolio rotation strategies common in traditional markets, rather than binary “risk-on or risk-off” positioning.
At the identical time, the flow shift underscores how BTC dominance can fragileen during periods of uncertainty, particularly when traders view greater upside potential in alternative assets. Rather than abandoning the market entirely, participants appear to be moving into exposures perceived as offering better risk-reward profiles under current conditions.
Takeaway
Project Crypto Reaction Shows Policy Optimism Is Wearing Thin
Joshi said structural and regulatory developments continue to shape institutional appetite, but the market’s response to policy announcements has become more cautious. She pointed to muted sentiment around the recently announced SEC and CFTC collaboration on “Project Crypto,” which aims to unify US .
“Structural forces continue to steer assets,” Joshi said. “Sentiment toward the recently announced collaboration between the SEC and CFTC on ‘Project Crypto’, aiming to unify US regulation, was muted compared to the enthusiasm compared to recent policy milestones like the GENIUS Act.”
According to Joshi, this fragileer response reflects not only the fragile mood across markets but also deeper concerns about how US regulatory reform may actually be structured. Rather than delivering simplification, the project may introduce new layers of complexity, potentially dampening in the US.
“This reaction reflects already fragile market sentiment, combined with concerns that the initiative risks a complex, dual-layered regulatory framework that could stifle growth,” she said.
The warning highlights a recurring challenge for US policymakers: efforts to define regulatory clarity often risk producing overlapping authority, leaving institutional players uncertain about compliance obligations and enforcement expectations. For global capital, that uncertainty can delay market entry or limit allocation growth, particularly compared with jurisdictions offering clearer rulebooks.
Takeaway
UK and Europe Gain Momentum as Blockchain-Based Capital Markets Become Operational
In contrast to the United States, Joshi said the UK and Europe are moving toward cleaner regulatory frameworks that reduce uncertainty and provide stronger foundations for institutional participation. She suggested that alignment across these regions is beginning to shift market engagement from experimentation toward execution.
“Turning to the UK and Europe, we’re viewing cleaner digital asset frameworks being established, as regulatory alignment reduces uncertainty and enables greater institutional participation,” she said.
She also pointed to the UK’s DIGIT initiative as a meaningful sign of progress in capital markets modernization. The programme, led by HM Treasury, is expected to issue short-dated native gilts using blockchain infrastructure, marking one of the clearest examples yet of government-led tokenisation initiatives moving into real implementation.
“Looking at the UK specifically, the HM Treasury’s DIGIT (Digital Gilt Instrument) programme, which will issue short-dated native gilts on blockchain infrastructure, marks a meaningful step towards modernising capital markets and is drawing significant interest as engagement shifts from exploratory to operational,” Joshi said.
The significance of the DIGIT programme extends beyond tokenisation itself. If successful, blockchain-issued gilts could establish a blueprint for digitising sovereign debt markets and modernising settlement infrastructure, reducing friction in issuance, trading, and custody workflows. For institutional investors, it may also offer a regulated gateway into blockchain-based financial instruments without relying on crypto-native market structures.
Joshi said this regulatory and policy momentum outside the US could reshape the , raising questions about whether dollar-backed dominance will remain inevitable.
“Progressive policies and greater conviction from policymakers outside of the US raise the question of whether USD-backed stablecoins will remain the dominant use case, or whether other stablecoins will be able to capture market share,” she said.
That observation reflects a growing international shift toward exploring sovereign-backed or regionally aligned digital currency infrastructure. As tokenised financial instruments emerge in Europe and the UK, stablecoin adoption could increasingly be influenced by regulatory acceptance, settlement integration, and government-backed market development rather than purely liquidity and network effects.
