Bitcoin has seen a minor correction after hitting a peak, but Wall Street firms are accelerating the expansion of their crypto-related products, even as the ECB President makes controversial comments.

Market Overview & ETF Capital Flows

Traditional Financial Market Update

US equities declined across all three indices on Tuesday (October 7th, US), with the Nasdaq seeing the largest drop at 0.67%. Stock futures continued to trend downwards. Gold and oil prices both rose, settling around $4059 per ounce and $62 per barrel, respectively.

Bitcoin Corrects After New Peak

Bitcoin corrected to around $121,000 after reaching its recent peak. Most major altcoins saw slight dips, though BNB continued to surge and remains at a high level. The overall crypto market capitalization stands at $4.26 trillion.

Despite the recent strong upward momentum, Bitcoin has seen continuous new peaks since July, interspersed with short corrections, differing from previous parabolic cycles. Specifically, the price hit $123,000 in mid-July, corrected to $112,000, then rose to $124,600 in mid-August, corrected down to $107,000, before recently establishing a new peak of $126,000. Despite this volatility, Bitcoin has firmly held above the $100,000 mark for 152 days, demonstrating a solid price floor. These short-term profit-taking events help relieve selling pressure, setting the stage for future, stronger rallies. Meanwhile, altcoins have not yet experienced a synchronized surge, indicating that market focus remains predominantly on Bitcoin.

Strong ETF Inflows Continue

US BTC spot ETFs continued to attract large capital inflows on Tuesday, totaling $875.6 million. Similarly, ETH spot ETFs and SOL spot ETFs saw inflows of $420.9 million and $14.6 million, respectively. This sustained, large-scale inflow across multiple crypto ETFs underscores persistent institutional demand for digital assets.

The Battle Between Intrinsic Value and Collective Belief

ECB President: Bitcoin Lacks Intrinsic Value

European Central Bank (ECB) President Christine Lagarde commented on Bitcoin in the media, stating when asked if she considered BTC to be digital gold: "No, it is not digital gold... Bitcoin has no intrinsic value or foundational value." While she acknowledged that her statement might provoke a strong reaction from the crypto community, she maintained the stance that Bitcoin lacks any real intrinsic or fundamental value. However, she also conceded that Bitcoin has a price and people believe in it, arguing that the hype surrounding Bitcoin has created a perception of value, causing the price to fluctuate based on market sentiment, but that doesn't make it truly valuable. Lagarde also previously revealed that her son is a believer in crypto.

• Context: The Euro has lost approximately 42% of its value since 2000. According to official ECB data, the average Euro inflation rate is 2.19% per year, resulting in a cumulative price increase of 71.8%. This historical data from central banks often fuels the argument that fiat currencies lack the scarcity that Bitcoin offers.

Anthony Pompliano: Buy Bitcoin Because Governments Won't Stop Printing Money

Anthony Pompliano argues that governments will never cease printing money, which means Bitcoin's value will continue to appreciate over time. Pompliano describes Bitcoin as a savings technology, a way to preserve the value of one's labor. His advice is clear: work hard, spend less than you earn, put the remainder into Bitcoin, and let it grow as fiat currencies lose value. Many investors now view Bitcoin as a "debasement hedge," protecting assets against the unlimited money printing by central banks.

Pompliano also contends that Bitcoin is gradually becoming the "new benchmark" for investment performance. Since 2020, the S&P 500 index has doubled in USD terms but has lost over 90% of its value when converted to Bitcoin, demonstrating that traditional assets cannot outperform BTC. Pompliano's conclusion is simple: if you can't beat Bitcoin, buy it. And that is exactly what an increasing number of investors are starting to do.

VanEck predicts that Bitcoin could reach half the market capitalization of gold, meaning approximately $644,000/BTC within the next 5–10 years. Their long-term vision projects that by 2050, Bitcoin could become a reserve asset for central banks and account for 10% of global transactions, with a potential price of up to $2.9 million USD. Other experts agree that Bitcoin is entering a maturity phase, no longer a speculative bubble but a genuine asset class.

Wall Street Accelerates Crypto Dominance

Morgan Stanley Officially Endorses Bitcoin

Morgan Stanley, one of the oldest US financial institutions, has officially recommended a 2–4% portfolio allocation to crypto, specifically Bitcoin, viewing BTC as "digital gold." They are supporting 16,000 financial advisors managing over $2 trillion in assets to facilitate this allocation.

S&P Dow Jones Launches Digital Markets 50 Index

S&P Dow Jones has launched the S&P Digital Markets 50 Index, marking the first time a major index provider has combined 15 major cryptocurrencies and 35 crypto-related stocks. Collaborating with Dinari, S&P will also launch a tokenized version of the index on the dShares blockchain by the end of the year, opening a path for connecting traditional markets and crypto.

The parent company of the NYSE, Intercontinental Exchange (ICE), is targeting a $2 billion investment in Polymarket—a prediction market platform. This deal could value Polymarket at $8–$10 billion, solidifying the platform's credibility as it seeks to expand in the US.

Other Key Crypto Updates

• Ray Dalio, founder of Bridgewater Associates, recommended that investors allocate up to 15% of their portfolios to gold, viewing it as an effective hedging tool against fiat currency devaluation and geopolitical instability.
• Japanese 30-year government bond yields rose to a record 3.318% after the Bank of Japan ended its yield curve control and reduced bond purchases, driven by rising inflation and fears over the country's high public debt.
• Tether announced it is partnering with Antalpha to raise at least $200 million for a digital asset fund focused on tokenized gold (XAUT), a move that expands its strategy beyond USDT and Bitcoin towards a $500 billion valuation goal.
• The US government is actively promoting BTC storage. Senator Cynthia Lummis stated that the US Strategic Bitcoin Reserve Fund could launch at any time, built from BTC seized by the government.

Sources

• Bloomberg
• CoinDesk
• U.S. Treasury
• TradingView
• Reuters
• SEC
• White House Press Office
• Morgan Stanley Global Investment Committee (GIC) Report
• Paul Tudor Jones Public Statements
• S&P Dow Jones Official Announcements
• Intercontinental Exchange (ICE)
• VanEck Research
• Anthony Pompliano (Pomp Investments)
• Christine Lagarde (ECB)
• Tether Official Announcements

Disclaimer

This article is for informational purposes only and should not be considered financial advice. Please do your own research before making investment decisions.