US stocks continue to surge, and gold has reached a new peak. However, the key focus for the market—interest rates—reveals internal division among Fed officials, according to the meeting minutes.

Market Overview

Record-Breaking ETF Inflows & Altcoin ETF Expansion

US equities closed higher on Wednesday (October 8th, US), with the S&P 500 and Nasdaq rising by 0.58% and 1.12%, respectively. Stock futures saw a slight increase. Oil rose to $62.3 per barrel. Gold hit a new peak of $4016 per ounce.

Bitcoin saw a slight recovery yesterday, moving back toward $123,000. Top altcoins generally saw minor gains. The overall crypto market capitalization reached $4.32 trillion.

US BTC spot ETFs saw inflows of $440.7 million on Wednesday. ETH spot ETFs also recorded $69.1 million in positive flows. SOL saw $6.1 million in inflows.

According to Eric Balchunas of Bloomberg, BlackRock's Bitcoin ETF (IBIT) led the entire US ETF market (out of 4,300 ETFs) in terms of capital inflows over the past week, attracting $3.5 billion and accounting for about 10% of total ETF inflows. All 11 Spot Bitcoin ETFs, including Grayscale's GBTC, recorded inflows in the same week, indicating that investment demand for crypto is exceptionally strong.

With the legislative push from the Trump administration, an increasing number of crypto-related ETFs are being proposed. Recently, Canary filed an updated S-1 prospectus for two spot ETFs—Litecoin (LTCC) and Hedera (HPR)—adding a 0.95% management fee and official ticker symbols. This is considered the final step before SEC approval. Although the temporary US government shutdown may slow the launch, the market still anticipates these ETFs will be approved soon.

Simultaneously, new ETFs are continuously being proposed, including leveraged ETFs and ETFs that combine stocks and Bitcoin, showing the deepening integration between traditional finance and crypto. This expansion helps to solidify the crypto market, making future policy tightening more difficult, even with a change in administration, as more US institutions and investors become involved.

Fed Meeting Minutes: Internal Division on Rate Cuts & Yield Curve Control

The Fed meeting minutes show that most officials agree on the need to cut interest rates due to a weakening labor market, but they are divided on whether to cut two or three times this year. The September meeting saw a 0.25% cut, bringing the federal funds rate to 4%–4.25%. The majority (10 of 19 officials) leans toward two more 0.25% cuts this year, followed by gradual reductions in 2026–2027 before stabilizing around 3%.

New Governor Stephen Miran was the only dissenting vote, advocating for a sharper 0.5% cut. He is seen as the representative for the faction pushing for more aggressive policy easing. Many officials remain cautious, arguing that current policy is not overly restrictive and requires further observation. However, the majority agreed that the risk of job losses has increased while inflation risk has subsided, making gradual easing appropriate.

The committee also discussed the impact of tariffs from the Trump administration but concluded they are not a cause of long-term inflation. Internal Fed surveys show that most traders expect at least two more 0.25% cuts this year, with some expecting three.

Additionally, the government shutdown is causing statistical agencies to cease operations, making it difficult to assess economic data. If the deadlock continues until the October meeting, the Fed may have to decide on rate cuts without updated information, even though the market is almost certain to predict two more rate cuts in October and December.

The $20 Billion AI Investment & Political Crypto Power

Elon Musk's artificial intelligence (AI) startup, xAI, is expanding its fundraising round to $20 billion, with participation from Nvidia, Apollo Global Management, Valor Capital, and Diameter Capital. The deal includes $7.5 billion in equity and $12.5 billion in debt, structured through a special purpose vehicle (SPV). This SPV will purchase Nvidia chips and lease them back to xAI for five years, to support the Colossus 2 data center in Memphis. Nvidia plans to contribute about $2 billion in equity as part of its strategy to accelerate AI adoption across the industry. This financial model allows Wall Street investors to profit based on hardware assets (GPUs) rather than company equity, creating an entirely new way to fund AI infrastructure.

Citibank forecasts that Bitcoin and Ethereum will lead the market by the end of 2026, as global investment continues to shift towards alternative assets like gold and crypto to hedge against risk, given the high valuation of stocks. BlackRock shares a long-term view, believing Bitcoin and Ethereum will play a central role in the future of global finance. The firm believes the strong development of stablecoins, tokenization, and blockchain is opening a new era where currency circulation is faster, cheaper, and more transparent. BlackRock envisions a near future where stocks and real estate can be traded directly on the blockchain, making markets more efficient.

The influence of crypto is growing, extending beyond economics into politics. A new survey shows that crypto investors are becoming a significant voting bloc in the 2026 US midterm elections, with 64% of participants stating that a candidate's stance on crypto will directly affect their vote. Although the majority of registered crypto voters are Democrats, this group tends to support the Republican Party and President Trump due to their belief in Trump's crypto policies—which they see as friendly, transparent, and less restrictive, including the idea of building a clear legal framework and establishing a national Bitcoin reserve. The majority of crypto voters are under 45, college-educated, and long-term investors, widely distributed across the US, with the highest concentration in the South and West. Due to this spread, they are viewed as a potential voting bloc capable of shifting the balance in key swing states, making crypto a weighty political topic in the US for the coming period.

Other Key Crypto & Market Updates

According to CNBC, the strong price rally in Bitcoin over the past year created an additional 70,000 crypto millionaires, raising the total number of people holding over $1 million in digital assets to approximately 240,000. Of these, 450 own over $100 million, and there are 36 crypto billionaires. The report suggests that profits from crypto injected about $200 billion in spending into the global economy. Unlike the early days of chasing luxury goods, today's crypto investors, largely aged 30–40, are focused on real estate and stable assets, contributing to rising home prices in areas with large investor communities.

Square just introduced Square Bitcoin, a new platform that allows small US businesses to accept payments, store, or automatically convert revenue into Bitcoin within the existing Square system. The service will offer free Bitcoin payment processing for the first year and officially launches on November 10, 2025. With a built-in wallet for buying, selling, and holding BTC, Square aims to make Bitcoin a popular payment method that is simple and convenient, like using a credit card.

YZi Labs (formerly Binance Labs) launched a $1 billion fund to support developers and startups on BNB Chain, focusing on DeFi, AI, Real-World Assets, DeSci, payments, and digital wallets. Selected projects can receive up to $500,000 and direct access to the core team and a global advisory network. YZi Labs is led by Ella Zhang, with the active participation of CZ, co-founder of Binance. Previously, the fund supported Ethena Labs, issuer of USDe and USDtb.

Metamask announced the integration of direct trading with the Hyper Liquid DEX, while Coinbase opened crypto staking access to users in New York. This is notable because New York is famous for having the strictest regulations for crypto companies, often being the last state to approve new products. However, this time, New York is ahead of California, which still does not permit staking activities, marking a surprising and positive step in the state's crypto policy.

Polygon Crypto just launched the Rio Hardfork upgrade, marking a major step in its "gigagas" roadmap to increase speed, reduce costs, and enhance network performance. Rio allows Polygon to process up to 5,000 transactions per second, while introducing the VEBloP model, which allows validators to vote for block producers, increasing stability and transparency. The reward mechanism is also more fairly distributed, encouraging smaller nodes to participate. This upgrade is expected to increase the appeal and support the recovery of the MATIC price.

Sources

• Bloomberg
• CNBC
• Glassnode
• U.S. Treasury
• TradingView
• Reuters
• SEC
• White House Press Office
• Morgan Stanley Global Investment Committee (GIC) Report
• Nvidia Investor Relations
• xAI Official Statements
• Square Official Announcements
• YZi Labs Official Announcements
• Polygon Crypto Official Blog

Disclaimer

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

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