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Thanks for reading The BlockByte Weekly, where we summarise the key updates in crypto over the last week and provide our perspective on what you need to know as an investor.
Weekly Snapshot
- BTC: US $111,702 (-9.2%)
- Crypto Market Cap: US $3.74T (-11.3%)
- Gold: US $4,015.6/oz (+3.2%)
- S&P 500: 6,553 (-2.4%)
- ASX 200: 8,958 (-0.3%)
- US 10-Year Treasury Yield: 4.059% (-0.07%)
Key Stories This Week
Largest Single Day Market Wipeout in Crypto History on the Back of Trump Tariff Threats - What Happened?
On Friday, Trump announced that the U.S. will impose a 100% tariff on China, over and above any tariffs they are currently paying, starting on November 1, and also added that the US will impose Export Controls on crucial software from China starting on 1 November 2025.
In response, the global crypto market plunged by 9.5% in 24 hours to a market cap of US $3.83T. S&P500 futures dived -3.5% and the S&P500 closed -2.7% lower. There was sentiment that a pullback had been expected for weeks as leveraged positions were high and no major market correction had occurred for six months. Bitcoin dropped to as low as $104,000 during the dip, wiping out its early October gains from the new all-time high this week of above $126,000, however bounced back up and is currently trading at ~US $111,700.
According to data from CoinGlass, across the crash nearly US $20 billion worth of leveraged positions, mostly longs, were wiped out during the crash. Unfortunately, some traders using leverage reported losing most, if not all of their portfolio.
Our take: Traders can use leverage (margin, futures, derivatives) to amplify returns - however leverage also magnifies losses and comes with sharp pitfalls. In a fast market drop, leveraged long positions (bets that prices rise) get liquidated automatically when price hits a margin threshold. These forced sales push price further down, triggering cascade liquidations. In tokens with lower liquidity or smaller market caps, the slippage and impact can be more severe in a market crash. As prices fall, a negative feedback loop can occur as fear sets in and traders pre-emptively sell, adding fuel to the fire.
From our view, there are two key lessons:
- Stay clear of tokens that do not have strong underlying tokenomics (market cap, liquidity, daily active users, to name a few); and
- Minimise leverage, and if you do use it, then stress test scenarios - for instance, ask “what happens if price moves 10% against me overnight? Will I survive?" We like to remind ourselves of a famous Warren Buffet & Charlie Munger quote:
“My partner Charlie says there is only three ways a smart person can go broke: liquor, ladies, and leverage. Now the truth is, the first two he just added because they started with ‘L’ – It’s leverage.” - Warren Buffett
Have We Reached the Top of the Market Cycle?
From our view, it's important to remember to zoom out. BTC is still up +78% over the past 12 months, and has remained at above US$100,000 for over 4 months. However, with bitcoin hitting an all-time-high above US $126,000 this week, followed by the crash over the last few days, investors are asking if we're near the top of the current cycle.
For those not subscribed to our daily newsletter, on Thursday we provided our response to this question, which we've summarised below for our weekly readers.
Historically, Bitcoin and broader crypto markets tend to peak 12–18 months after each halving event, with the most recent halving occurring in April 2024. Since then and even after the dip over the last few days, Bitcoin’s price has climbed ~75%, and October 2025 marks the 18-month milestone.
While a 75% gain in 18 months is impressive by most investing standards, it pales compared with the 800%, 3,500%, and 9,500% rallies of prior cycles. Naturally, as Bitcoin has matured into a multi-trillion-dollar asset, its upside potential moderates.
However, this cycle has been fundamentally different. It’s been driven not by retail speculation but by institutional demand, clearer regulation, and even nation-state adoption. Institutions — including funds, ETFs, corporations, and governments — now hold over 3.9 million BTC, worth ~US $435 billion collectively.
To gauge whether we’re approaching a cycle top, we also look at the MVRV Z-Score — a metric that compares Bitcoin’s current market value to its realised value, adjusted for historical volatility.
When bitcoin’s market value rises 6 standard deviations or more above its long-term mean — in other words, when the MVRV-Z Score reaches the red zone in the chart below — it has historically marked cycle tops.
At present, with an MVRV-Z Score of ~2.4, Bitcoin appears neither over-extended nor overbought by this measure.
Morgan Stanley Recommends 2–4% Crypto Allocation Amidst Rising Monthly Returns for Bitcoin
Earlier this week, Morgan Stanley’s Global Investment Committee advised advisors to allocate up to 4% to crypto in high-growth portfolios and 2% in balanced ones. The bank compared Bitcoin to “digital gold” amid its record US $125K price, noting declining volatility and growing ETF demand.
Our take: The main driver of the sustained price levels is institutional buying which was largely absent for the first decade of bitcoin's existence. There's over US $161B held in spot ETFs, with a further US $125B held by public companies that have put bitcoin on their balance sheet.
ICE Invests US $2B in Polymarket at US $9B Valuation
Intercontinental Exchange (ICE), the parent of the New York Stock Exchange, has invested US $2 billion in crypto prediction platform Polymarket, valuing it at US $9 billion. The deal marks ICE’s first major foray into decentralised prediction markets, which allow users to trade event outcomes using stablecoins. It follows Polymarket’s recent acquisition of US-licensed exchange QCEX and regulatory relief from the CFTC. IInterestingly, Polymarket correctly predicted the outcome of all 50 US states in the 2024 election campaign.
Our take: ICE’s backing signals a new phase of institutional legitimacy for crypto prediction markets. Expect this to accelerate tokenised derivatives and probabilistic data platforms as Wall Street seeks exposure to “information markets” built on-chain.
JPMorgan Predicts Just US $1.5B Inflows for Solana ETFs
JPMorgan expects spot Solana ETFs to attract around US $1.5 billion in their first year — just one-seventh of Ethereum ETF inflows — even if the SEC approves them this week. The bank cited weak network activity, fatigue from multiple ETF launches, and competition from diversified digital asset funds as key headwinds.
Analysts also noted muted demand in CME Solana futures and a collapse in the Grayscale Solana Trust premium from 750% to near zero, signalling subdued investor enthusiasm.
Our take: Even if Solana struggles to replicate bitcoin and ethereum’s institutional momentum, we still see Solana getting a positive boost from the ETF launches and we expect that this will propel positive price activity in the weeks post launch.
Until next week,
James
James Brannan
Managing Director
BlockByte
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