Macro update

As the U.S. government entered its first shutdown in seven years, markets largely shrugged off the political impasse. Equities continued to grind higher, with the S&P 500 up 1.1% and the Nasdaq extending gains into early October. Treasury yields held near recent highs as multiple Fed officials reinforced the “higher for longer” message, tempering hopes of near-term easing. 

The U.S. dollar softened amid fiscal uncertainty, while gold surged to fresh record highs around $3,900/oz, driven by central-bank accumulation and policy hedge demand. Oil prices edged higher and base metals firmed, supported by a weaker dollar and renewed Chinese stimulus measures. Despite the macro noise, risk appetite remained resilient across asset classes, a cautiously constructive backdrop sustained by stable earnings, contained volatility, and continued rotation into cyclical and hard-asset exposures. 

Digital assets outperformed all major asset classes, led by Bitcoin (+10.2%), Ethereum (+9.0%), and altcoins (+7.5%) as we entered the first week of “Uptober”.

Bitcoin extended its rally into price discovery, breaking through $125,000 and briefly touching $125,700 before consolidating just below. The move lifted total crypto market capitalisation above $4.3 trillion, supported by record ETF inflows, a drawdown in exchange reserves, and over $130 million in short liquidations, which amplified upside momentum through forced covering. Open interest reached new highs while RSI readings stayed neutral, pointing to a strong but measured advance.

Ethereum underperformed slightly in relative terms but maintained a constructive profile, recovering above $4,600 on $1.3 billion in ETF inflows. The ETH/BTC ratio hovered near multi-year lows as capital continued to favour Bitcoin’s macro simplicity, though on-chain activity in DeFi and rollup ecosystems shows tentative improvement

Broader participation extended into higher-beta names such as BNB, ASTER, MNT, OKB and CAKE With a clear skew towards names within the binance ecosystem as these names benefited from strong perp activity in perps.With implied vols reset lower post-expiry and leverage largely flushed out, the setup into October remains constructively balanced, defined by cleaner positioning, sustained ETF demand, and the return of the familiar “Uptober” seasonality that historically marks the strongest leg of the cycle.

Looking at the index level, digital assets rallied across all sectors, with the GMCI-30 up 12.2% for the week. Layer 2s (+19.4%) led gains on strength in MNT, ARB, and OP, followed by Meme tokens (+15.4%) such as BONK and Pump.fun, and Layer 1s (+14.2%). Broader sectors including DeFi, Gaming, AI, and DePIN advanced between +8–10%, reflecting a widespread rebound and renewed risk appetite across the market.

Our take:

“Positioning looks cleaner post quarter-end, and the setup remains constructive as long as BTC holds above the range it broke out of this week"

Markets have reset into a healthier equilibrium, with leverage reduced, implied vols lower, and flows turning steadier. BTC remains well-supported by consistent ETF inflows and tighter exchange supply, while ETH continues to lag, leaving some room for rotation as confidence builds. Broader participation has returned across Layer 2s and selective narratives like Binance, though spot liquidity remains relatively thin, meaning most short-term momentum still originates in derivatives markets, where funding, positioning, and hedging flows continue to steer price direction more than outright spot demand.

Heading into October, the path of least resistance is still higher. The combination of cleaner positioning, structural inflows, and a supportive macro backdrop should keep dips contained, though higher-for-longer rates, fiscal uncertainty, and dollar swings remain key watchpoints for sentiment.

Notable headlines

• The Ethereum Foundation published Project Mirror, offering insights into how different audiences perceive Ethereum and its ecosystem.
• Solana introduced $USX, a new institutional-grade stablecoin backed by YieldVault to strengthen on-chain financial infrastructure.
• Ethena Labs announced plans to launch suiUSDe and USDi stablecoins on the Sui Network later this year.
• Pendle expanded to the Plasma Foundation, enabling global access to its fixed-yield products through Plasma’s digital bank.
• Coinbase partnered with Samsung, offering 75M Galaxy users in the U.S. free Coinbase One access and seamless crypto purchases via Samsung Pay.
• Flying Tulip unveiled a $200M raise under a new fundraising model aimed at building a full-stack exchange and promoting more sustainable capital formation.