(38/52) Weekly Market Insight | October Week 1 | Leverage Shakeout

Headline News: Leverage Shakeout

• Bitcoin experienced a turbulent week, declining 2.7% and saw over $6.3 billion in all perpetual contracts liquidated across major exchanges. A resilient US economy dampened the expectations for steeper rate cuts, pushing the 10-year Treasury yield up by 4 basis points.
• Despite these headwinds, Bitcoin is entering what is traditionally its strongest month, with October boasting a median return of 21.2%. This seasonal strength, combined with anticipated spot altcoin ETF approvals and more regulatory embracement.

Macro-Outlook: Resilient Economy

• President Trump announced a 100% tariff on pharmaceuticals, 50% tariff on kitchen cabinets, bathroom vanities and associated products, 30% tariff on upholstered furniture and 25% tariff on heavy trucks, effective on October 1.
• The continuing resolution (CR) that would fund the government through November 21 is still at a standstill. The White House announced preparations for a “reduction in force” if shutdown occurs. However, the probability of shutdown in Kalshi dropped from 74% to 56%.
• The US durable goods orders increased 2.9% in August, significantly higher than the market forecast of a 0.5% drop. The final Q2 GDP also revised upwards to 3.8%, higher than the previous estimate of 3.3%, indicating a stronger than expected economy.
• The US core PCE price index increased to 2.7%, in line with the market expectation. Personal income and spending increased by 0.4% and 0.6% respectively, both above the market expectations by 1 percentage point.

Upcoming Economic Calendar including,

• Tuesday, September 30, 10:00pm: US JOLTs Job Openings in August
• Wednesday, October 1, 8:15pm: US ADP Employment Change in September
• Wednesday, October 1, 10:00pm: US ISM Manufacturing PMI in September
• Friday, October 3, 8:30pm: US Non-Farm Payrolls and Unemployment Rate in September
• Friday, October 3, 10:00pm: US ISM Services PMI in September

Weekly-Cryptos-Overview: Tether Shines, Hyperliquid Retaliates

• The US Senate is holding a hearing on cryptocurrency taxation on October 10, at 10pm SGT.
• The US SEC Chair Paul Atkins announced plans to introduce “innovation exemption” by the end of 2025, allowing crypto firms to launch new products without regulatory hurdles.
• The US CFTC plans to allow stablecoins to serve as collateral in derivatives markets.
• The National Bank of Kazakhstan announced the launch of a national stablecoin pilot project, Evo (KZTE), pegged to the local currency, the tenge, on Solana network.
• Cloudflare introduced NET Dollar stablecoin that enables instant and secure payment transfers for AI agents, and contributes to open standards such as Google’s AP2 and x402 with Coinbase.
• Naver, the leading search engine and LINE operator, acquired Upbit operator Dunamu through a stock-swap deal, expanding its presence in crypto space.
• ING, Banca Sella, KBC, Danske Bank, DekaBank, UniCredit, SEB, CaixaBank and Raiffeisen Bank jointly issue a MiCA-compliant Euro-stablecoin in the second half of 2026.
• Ant International became the first financial institution to use HSBC’s Tokenised Deposit Service (TDS) in Hong Kong.

Layer 1 and Layer 2s

• Tether-backed, Plasma had a successful launch with FDV at approximately $14 billion. The team also announced Plasma One, offering 10% yield vaults and 4% cash back when spending.
• Stable, stablecoin blockchain backed by Bitfinex, announced an undisclosed strategic investment from Paypal. Unlike Plasma, Stable focuses on USDT transfer and payment applications, while Plasma focuses on building a DeFi ecosystem using USDT.
• SoftBank and Ark reportedly are in discussions about participating in Tether‘s latest funding round at a valuation of $500 billion.
• Kaia announced its stablecoin strategy, including the Stablecoin Orchestration Layer, a super-app called Project Unify on LINE NEXT that aims to support stablecoin transfers in Southeast Asia, and K-STAR alliance for issuing KRW-stablecoin.
• Crypto exchange Gate launched Gate Layer, an Ethereum Layer-2 with high throughput and 1 second block times, focusing on perpetual exchange, launchpad and advanced trading engine for memecoins. GT token will be used as gas token.
• Quant Network announced a partnership with the UK Finance association to launch a pilot project for sterling deposits stablecoin, GBTD.
• Swift partnered with banks including BNP Paribas and BNY Mellon to test global payment messaging using Linea blockchain.
• NTT Digital, the web3 arm of the largest Japanese telecom, announced it would become a validator for EigenDA after previously joining OG network and Canton Network as validators.
• NEAR Protocol increased the number of chunk validator seats from 300 to 500.

Dapps

• Circle introduced an on-chain reversibility mechanism for USDC transfers on Arc blockchain in the event of disputes, fraud or hacking, opposing the crypto ethos but useful in compliance applications.
• LayerZero announced a discretionary buyback of 5% token supply from early investors. As the official partner of Plasma, LayerZero facilitated a record daily transaction volume of $4.6 billion on September 25.
• Uniswap launched The Compact V1, introducing more efficient cross-chain experience across Ethereum, Unichain, Base and Arbitrum.
• Pyth Network introduced Pyth Pro, a subscription-based low latency wide-range market data service for institutions.
• ApeX Protocol, a DEX with perpetual markets endorsed by Bybit, launched a $10,000 campaign for new sign-up, loss protection and trading volume.
• DYDX launched Pocket Pro Bot, a social trading platform in Telegram with a $100,000 launch campaign.
• Flare officially launched FAssets on Flare mainnet, enabling XRP holders mint FXRP on Flare and participating across DeFi activities.
• Mira Network launched its mainnet and MIRA token at approximately $1.1 billion FDV. Mira combines diverse AI models to cross-verify outputs to reduce biases and eliminate hallucinations.

Governance and Upcoming Alpha

• The community proposed to reduce HYPE token supply by 45%, by burning the huge unvested allocation for the Future Emission & Community Rewards” that worried the market, and token in Assistance Fund. The proposal also called for removing the maximum supply cap, which raised some concerns from the community that this could make the token less appealing.
• Hyperliquid launched permissionless spot quote assets on the mainnet, enabling anyone to propose a quote token with 200K HYPE staked and responsible for the orderbook quality of the asset pair. The team also announced more details on HIP-3, permissionless perpetual market listing, including 500K HYPE staking requirement, fee share of 50%, new markets will be launched via HIP-1 auction and more.
• Solana proposed SIMD-0370, removing fixed compute unit block limit after Alpenglow, increasing throughput at the expense of validators with lesser resources.
• BNB Chain proposed reducing the minimum gas price from 0.1 Gwei to 0.05 Gwei and improving the block interval from 750ms to 450ms.
• Aster stated in a podcast that the team is building Aster Chain to preserve verifiable privacy in trading.
• Synthetix announced a $1 million prize trading competition ahead of its Ethereum native perpetual exchange mainnet launch in October.
• World Liberty Financial announced at Korea Blockchain Week that the team is planning to launch its debit card very soon.

Token Unlock

• TREE token unlocked on September 30, amount representing 6.16% of the token supply.
• REZ token unlocked on October 1, amount representing 12% of the token supply.
• IO token unlocked on October 1, amount representing 6.09% of the token supply.
• KMNO token unlocked on October 1, amount representing 22% of the token supply.
• MAV token unlocked on October 2, amount representing 7.2% of the token supply.
• ASTER token unlocked on October 6, amount representing 19.3% of the token supply.
• JTO token unlocked on October 8, amount representing 2.96% of the token supply.
• AVNT token unlocked on October 10, amount representing 4.64% of the token supply.
• LINEA token unlocked on October 11, amount representing 6.59% of the token supply.
• BABY token unlocked on October 11, amount representing 4.57% of the token supply.
• HOME token unlocked on October 11, amount representing 12% of the token supply.