Archax Weekly Market Update, Oct 30, 2025

Crypto has ended the week roughly flat after a volatile few days. Bitcoin and Ethereum each rallied about 10% mid-week before giving back those gains, leaving the total crypto market cap relatively unchanged from last Friday. The market feels calmer than it looks, with funding rates still positive and call option demand rising, hinting that positioning has reset cleanly after October’s volatility.

The big news this week came from the Federal Reserve, which cut rates by 25 basis points to 3.75–4% as expected, but the real headline was the signal that quantitative tightening (QT) is nearing its end. QT is the process of shrinking the Fed’s balance sheet by letting bonds mature without reinvesting the proceeds, which drains liquidity from the system. The Fed now appears ready to conclude that process as funding pressures rise across money markets. Ending QT would mark the start of a new phase of expanding liquidity, historically a strong tailwind for risk-on assets such as crypto. As liquidity returns, investors tend to move out along the risk curve in search of higher returns, and Bitcoin is often an early beneficiary.

While Jerome Powell kept his tone cautious, the direction of travel is clear. With inflation easing to 3% year on year, the Fed now has room to support growth without reigniting inflation fears. Even so, Powell emphasised that further cuts this year are not guaranteed, saying the Fed wants to see more evidence that job growth and wage pressures are easing before moving again. The message tempered expectations but did little to alter the broader narrative: the tightening cycle is effectively over, and liquidity conditions are turning more supportive into year-end.

The rotation we highlighted last week appears to be underway. Gold’s remarkable run through the year has slowed, and this week Bitcoin took the lead, outperforming gold by as much as 11% before easing back to a 3.5% gain. Even a small rotation out of gold can have an outsized impact on Bitcoin’s price, given the vast difference in market size between the two assets.

While the end of QT sets the stage for improved liquidity, confidence remains fragile. The transmission of that liquidity will take time, and with much of the optimism already reflected in prices, markets could remain sensitive to any wobble in risk appetite. The next few weeks will show whether momentum can build or if selling pressure persists.