CPI Softens in time for Fed Meeting

Market Notes

• September CPI came in softer than expected at 3.0% YoY and 0.3% MoM, reinforcing expectations of a Fed rate cut next week amid easing inflation pressures despite higher gas prices and ongoing tariffs.
• Trump threatened a 10% tariff hike on Canadian imports after Ontario aired an anti-tariff ad using Reagan’s words during the World Series, calling it “fraudulent” and halting trade talks.
• The U.S. and China reached a trade deal “framework” to avert Trump’s 100% tariffs, with talks covering rare earth exports, fentanyl, and farm purchases; Trump and Xi are expected to meet this week, with a Beijing visit likely early next year.

Market Color

Crypto markets opened the week with a steady climb, prices grinding higher before accelerating over the weekend. Friday’s CPI report showed a 0.3% monthly rise in September and an annualized rate of 3%, both slightly below expectations. The softer inflation print boosted sentiment and helped extend the week’s upward momentum across digital assets. Bitcoin reached $115,000 while the S&P closed above $6800 for the first time on Monday.

President Trump signaled he is hopeful about a trade deal with China, allaying concerns about tariffs in and access to rare-earth metals. The President’s comments followed similar comments made by Treasury Secretary Scott Bessent over the weekend, where he said that a framework was ready for President Trump and President Xi to discuss later this week. The string of good news may have been the catalyst which sent safe haven assets like gold and silver falling, but it appears risk appetite may be returning to the digital asset markets with the weekend price reaction.

Markets widely expect the Fed to lower interest rates by another 25 basis points this month, which could help ease liquidity, bolstering demand for cryptocurrencies and other risk assets. Even with one of the worst Octobers on record for bitcoin, the flagship digital asset is still within striking distance of an all time high monthly close above $116,000.

Secretary Bessent confirmed that the list of candidates to replace the sitting Federal Reserve Chair Jerome Powell has been reduced down to five candidates. President Trump told reporters that he expects to announce his pick by the end of the year, with Powell’s term expiring in May of 2026. The administration also announced they had chosen SEC Crypto Task Force Chief Counsel Mike Selig to lead the CFTC. This development signals a closer coordination between the two agencies on pro-crypto regulation. Binance founder and former CEO Changpeng Zhao, or CZ, received a pardon from President Trump last week, several months after CZ said he had asked for one. CZ had pleaded guilty to violating the Bank Secrecy Act back in November of 2023. The prosecution required CZ to step down as the CEO, pay a $50M fine, and serve a four month prison sentence. Binance also paid a record-breaking $4.3B to the U.S. DOJ. Press Secretary Karoline Leavitt said in a statement last week that CZ had been “prosecuted by the Biden Administration in their war on cryptocurrency,” alluding to the Trump administration’s intention to reverse what it viewed as a politically motivated prosecution.

The U.S. Crypto Market Structure bill is gaining bipartisan traction again as industry leaders visited capitol hill to voice their support and engage with lawmakers. According to public comments, 90% of the bill’s issues have already been resolved with the remaining 10% to be resolved in working groups once the committee reconvenes in person, sparking renewed optimism that the bill could be finished before Thanksgiving of this year.

JPMorgan Chase announced plans to allow institutional clients to use bitcoin and ether as loan collateral by the end of the year. Their move is part of a major trend seen throughout the year as major financial firms move to integrate digital assets into their client services. Wall Street's continued adoption not only signals acceptance and legitimacy for the industry, but also client demand at the highest levels of finance. Zelle, a payments processor, announced on Friday that it would start using stablecoins to make international transactions for the firm. Zelle is owned by Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, U.S. Bank, and Wells Fargo. In their press release, Zelle referenced moving money “safely and conveniently across borders” as “one of the most persistent challenges in global money movement.” Though Zelle did not specify which stablecoin they would use, it is notable that the Wall Street backed company is integrating digital assets as an operational tool, rather than just another product listing to attract or retain clients.

October objectively has been a rough month for digital assets with volatility that shook everyone and left speculators wondering what the next move is.This week, confidence quietly returned to markets and a recovery began. Softer inflation data, easing trade tensions with China, and expectations of another Fed rate cut helped steady risk sentiment after a tenuous month. Policy appears to be advancing, with crypto beginning its integration into Wall Street’s financial infrastructure. As the market heads into the Fed’s next decision, liquidity tailwinds and deepening institutional alignment could set the stage for a stronger close to the year.

Chart Corner

Crypto M&A activity surged to new highs in Q3 2025, reaching $10 billion in disclosed deal value, more than double the previous quarter. The spike underscores accelerating consolidation across the digital asset industry as major firms pursue scale, regulatory readiness, and infrastructure expansion.

By The Numbers

$50B Open interest in bitcoin options on Deribit has reached a record high, with a notional value just above $50B. The increase in open interest is driven by the popularity of put options, with the most popular trade at the $100,000 strike price. This indicates traders are actively hedging downside risk in size.

$3.86B The tokenized gold market cap has risen to $3.86B between the Tether and Paxos gold tokens, XAUT and PAXG respectively. While tokenized gold does not truly represent physical gold ownership, the popularity of these products have surged in the past months following gold’s historic rally seen throughout 2025.

$1.315B The value of Tesla’s bitcoin holdings rose from $1.235B to $1.315B quarter over quarter according to the company’s latest reports, allowing them to book an $80M gain on its holdings. Tesla continues to hold 11,509 BTC on its balance sheet with no new purchases reported over the last quarter.

BitGo News

• WBTC is now live on Sui Network via LayerZero, expanding bitcoin connectivity across chains with faster, more secure bridging.
• BitGo attended Coin Center’s Annual Dinner in NYC, backing efforts to advance clear and responsible crypto regulation.
• BitGo will join OranjeBTC Summit 2025 during bitcoin Week São Paulo, supporting BTC adoption and infrastructure growth in Latin America.