Last week, cryptoassets staged a robust recovery from the prior week's weakness, with Our Chart-of-the-week showing global crypto ETPs recording unprecedented net inflows totalling 5,665.3 mn USD.
In our previous commentary, we highlighted bitcoin's resilience around the $108k level, which coincided with the short-term holder cost basis, providing a strong support zone. Coupled with the historically bullish performance of Q4, often dubbed "Uptober" by the market, this foundation paved the way for bitcoin to reach an all-time high of $125,689 this past Sunday.
This surge is indicative of renewed investor confidence and was likely fuelled by escalating geopolitical tensions and a resurgence of the "debasement trade," amplified by last week's government shutdown. Growing fiscal concerns in major global economies are intensifying this trend, pushing investors toward assets perceived as hedges against currency erosion.
Bitcoin's performance continues to diverge sharply from the US Dollar Index (DXY), with the DXY down 10.15% year to date, while bitcoin has surged 27.3% over the same period. This inverse relationship is driven by several factors: dollar depreciation eases global financial conditions, boosts global money supply, and reduces the denominator in the BTC/USD exchange rate, all of which provide structural support for bitcoin's price appreciation. For a deeper dive into how de-dollarisation underpins the bullish case for store of value assets, refer to our May 2025 Bitcoin Macro Report.
With rising geopolitical risks and persistent macroeconomic uncertainty, inflationary pressures in the US appear more likely to intensify than subside. Increased global borrowing is amplifying currency concerns, reinforcing a structural bid for hard assets like gold, which has outperformed bitcoin with a 50.03% year to date gain.
Here there are two perspectives that emerge.
Some investors believe gold's rally may be overstretched, prompting a reallocation of capital into alternatives like bitcoin, which offers a similar value proposition as a hedge against currency debasement but at a potentially lower valuation premium.
Others contend gold's ascent will persist, driven by central bank demand shifting from treasuries, passive buying in markets like China, and uncertainty stemming from President Trump's transformative trade policies.
Yet, even if gold continues to lead as the traditional store of value, anticipated policy shifts, including lower interest rates, yield curve control, and expansive monetary measures, are set to flood markets with liquidity.
This influx is likely to spill into riskier segments of institutional portfolios, where bitcoin often represents the upper limit of permissible risk for large investors.
Investors positioned on either side of the “store of value” debate could ultimately converge toward the same outcome.
Those viewing bitcoin as a modern hedge may rotate capital from an overstretched gold market, seeking asymmetric upside in a digital alternative.
Meanwhile, allocators who continue to treat bitcoin as a higher-beta risk asset will still find exposure supported by macro tailwinds.
In both cases, the destination remains the same: renewed capital inflows into digital assets.
Bitcoin led with 3493.9 mn USD, followed by Ethereum with 1488.7 mn USD, while Altcoins ex-ETH attracted 685.2 mn USD, signalling that the rally is broadening beyond the majors.
Rather than isolated speculation, this pattern reflects a structural re-risking across digital assets as liquidity conditions improve, and investor participation deepens.
With rate cuts on the horizon, an accelerating wave of token launches from marquee names like MetaMask and BASE, and the SEC's new framework paving the way for additional spot ETF listings, institutional engagement is set to expand further.
In general, among the top 10 crypto assets BNB, Bitcoin, and Ethereum were the relative outperformers.
Overall, altcoin outperformance vis-à-vis bitcoin has continued to be low last week, with only 25% of our tracked altcoins managing to outperform bitcoin on a weekly basis. Ethereum also underperformed bitcoin last week.
Our in-house “Cryptoasset Sentiment Index” is on a two-week uptrend, increasing to 0.44, after reaching the lowest level since April 2025 two-week ago.
At the moment, 10 out of 15 indicators are above their short-term trend.
Last week, positive momentum was reflected across Crypto Fund Flows; BTC's Funding Rate, 1M 25D skew and 3M Basis; and Cross Asset Risk Appetite metrics.
The Crypto Fear & Greed Index currently signals a “Neutral” level of sentiment as of this morning. This change is not uncommon as the index has spent the majority of the last month in between “Neutral” and “Fear”.
Performance dispersion among cryptoassets has slighted declined last week, signalling that altcoins correlation with the performance of bitcoin declined.
Altcoin outperformance vis-à-vis Bitcoin has increased from last week, with around 25% of our tracked altcoins managing to outperform Bitcoin on a weekly basis. Ethereum underperfomed Bitcoin by 113bps.
In general, increasing (decreasing) altcoin outperformance tends to be a sign of increasing (decreasing) risk appetite within cryptoasset markets and the latest altcoin outperformance signals a increasing risk appetite at the moment.
Sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) remained broadly unchanged, and elevated, from the previous week, increasing slightly from 0.7 to 0.71, supporting the rationale behind altcoin outperformance.
Weekly fund flows into global crypto ETPs accelerated last week. Inflows across Bitcoin, Ethereum, and ex-Ethereum altcoin products suggest strong allocation. This coincides with a slight decline in performance dispersion, indicating that correlations have weakened, and divergences are beginning to narrow.
Global crypto ETPs saw around +5665.3 mn USD in weekly net inflows across all types of cryptoassets, after +1699.6 mn USD in net inflows the previous week.
Global Bitcoin ETPs have continued to experience net inflows totalling +3493.9 USD last week, of which + 3245.3 mn USD in net inflows were related to US spot Bitcoin ETFs.
The Bitwise Bitcoin ETF (BITB) in the US experienced net inflows, totalling + 211.9 mn USD last week.
In Europe, the Bitwise Physical Bitcoin ETP (BTCE) experienced net outflows equivalent to -11.8 mn USD, while the Bitwise Core Bitcoin ETP (BTC1) experienced minor net inflows of +0.2 mn USD.
The Grayscale Bitcoin Trust (GBTC) has posted net inflows of 57.3 mn USD. The iShares Bitcoin Trust (IBIT), also experienced net inflows of around + 1816.4 mn USD last week.
Meanwhile, flows into global Ethereum ETPs maintained its positive trend last week, with around + 1488.7 mn USD in net inflows.
US spot Ethereum ETFs, also recorded net inflows of around + 1295.8 mn USD on aggregate. The Grayscale Ethereum Trust (ETHE), has posted net inflows of + 30.4 mn USD.
The Bitwise Ethereum ETF (ETHW) in the US has also posted net inflows of +83 mn USD.
In Europe, the Bitwise Physical Ethereum ETP (ZETH) saw net outflows of -11.6 mn USD while the Bitwise Ethereum Staking ETP (ET32) saw minor net outflows of -0.2 mn USD.
Altcoin ETPs ex Ethereum also experienced net inflows of +685.2 mn USD last week.
Thematic & basket crypto ETPs, however, posted net outflows of -2.5 mn USD on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) has experienced zero flows (+/- 0 mn USD) on aggregate.
Global crypto hedge funds exposure to Bitcoin has increased last week. The 20-days rolling beta of global crypto hedge funds' performance to Bitcoin increased to around 0.61 per yesterday's close, up from 0.53 from the week before.
Intraday Spot Buying minus Spot Selling volume flipped positive for the first time since August, highlighting heightened buy-side demand, with net buying volumes reaching around +$0.59 bn by week-end.
Furthermore, based on recent data from Glassnode, the overall downward trend in exchange-held Bitcoin reserves persists. The current level stands at 2.838 mn BTC, representing approximately 14.24% of the total circulating supply, a -23 bps decrease from last week.
Bitcoin whales (entities that hold at least 1k BTC) have continued to aggressively remove bitcoin off exchanges on a net basis, indicating a substantial uptick in whale HODLing. More specifically, BTC whales removed -49,158 BTC from exchanges last week, the 143rd largest event on record. Notably, these transfers could be related to internal exchanges movements, however, the combination of increasing buy-side volumes, as well as the reduction in exchange balances supports the validity of this observation.
Notably, the 30-day measure of “apparent demand” for Bitcoin remained positive, yet continued to decline week-on-week, suggesting stagnation in short-term holder market participation.
Additionally, Short-Term Holder profit taking remains relatively muted, despite the formation of a new ATH. Currently, new investors have recorded a total realized profit of $3.07bn across the week. This pales in comparison to the previous three ATH events, which recorded peak Short-Term holder capital inflows of $11.9bn, $10.7bn and $5.8bn, respectively.
Overall, on-chain metrics suggest a substantial uptick in buy-side pressure, supported by continued exchange outflows and significant whale withdrawals. In contrast, short-term holder demand remains moderate, with the appetite of this cohort to engage with the market appearing uninspired at the current price range.
Last week, BTC futures open interest for calendar contracts increased by 17.2k BTC across CME instruments. Meanwhile, perpetual open interest across all exchanges also rose by around 16.7k BTC, suggesting an uptick in investor speculation and cash-and-carry trade activity.
BTC perpetual funding remained positive throughout last week, with the average funding rate climbing slightly as the market rallied. The increase in long bias suggests an uptick in bullish sentiment among traders in the perpetual futures market. However, the average funding rate remains below the previous two ATHs, indicating the market has yet to reach excessive levels of euphoria or speculation.
In general, when the funding rate is positive (negative), long (short) positions periodically pay short (long) positions, which is indicative of bullish (bearish) sentiment.
The BTC 3-month annualised basis also ticked higher to around 8.5% p.a., yet again remains lower than the previous ATH formations, mirroring the trend observed in funding rates.
After a sharp reduction in BTC option open interest due to quarterly expiries, open interest recorded a significant recovery, rising by around 60.5k BTC, the 17th largest uptick on record. In addition, the put–call open interest ratio increased from 0.61 to 0.63.
Meanwhile, the 1-month 25-delta skew for BTC normalised over the week from +10.3% to +3.1%, signalling reduced investor appetite for downside protection and a shift toward a more neutral positioning.
BTC option implied volatilities rose slightly compared to last week. At the time of writing, implied volatilities of 1-month ATM Bitcoin options are currently at around 35.82% p.a. on Deribit, an increase of 171bps.
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