On October 6, Bitcoin surged past $125,000, once again setting a new historical high, marking the official entry of the market into a new round of frenzy. Along with BTC's rise, mainstream altcoins like Aster and BNB experienced a comprehensive surge, and liquidity on the BSC chain significantly returned, bringing market sentiment back to the hottest phase of the year. The brief decline caused by the U.S. government shutdown has now been completely swallowed by the "FOMO-style market."

From a macro perspective, easing expectations are providing solid support for risk assets. According to CME FedWatch data, as of now, the probability of interest rate cuts in October and December stands at 94.1% and 84%, respectively. The market generally believes that the Federal Reserve has entered the "pre-communication phase" before a policy turning point, with dual easing in fiscal and liquidity becoming the main theme. With a weak U.S. labor market, alleviated debt ceiling pressures, and the Treasury continuously injecting liquidity, there are signs of a decline in real dollar interest rates, leading to a rapid withdrawal of funds from the money market and a reinvestment into stocks and crypto assets. This round of increases is both a preemptive reaction to expectations of interest rate cuts and a liquidity restart, as well as a typical "fund-driven bull market."

Next, Rhythm BlockBeats has compiled traders' views on the upcoming market situation to provide some directional references for trading this week.

@CryptoHayes

Arthur Hayes, in his latest article "Long Live the King," systematically elaborated on the evolutionary logic of Bitcoin's price cycle, proposing the view that "the four-year halving cycle is dead, and the liquidity cycle should stand." He pointed out that the historical transitions between Bitcoin bull and bear markets essentially stem from the expansion and contraction of liquidity in the U.S. dollar and the Chinese yuan, rather than changes in block rewards. From 2009 to 2013, the Federal Reserve initiated quantitative easing (QE) for the first time, along with Chinese credit stimulus, which jointly propelled the birth of Bitcoin and its first bull market; from 2013 to 2017, a surge in Chinese credit ignited the ICO boom until the tightening of currency burst the bubble; from 2017 to 2021, the "massive liquidity injection" during the Trump and Biden eras created the largest liquidity expansion in history, pushing Bitcoin to new historical highs.

Entering 2025, Hayes believes the world is returning to a "narrative of easing." The U.S. Treasury is releasing trillions of dollars in liquidity through the issuance of short-term government bonds, while the Federal Reserve is forced to restart interest rate cuts against a backdrop of high inflation; China, facing real estate recession and deflationary pressures, is once again loosening credit and stimulating domestic demand. Under the dual easing of the two major economies, funds are bound to return to the risk asset market.

@Jackyi_ld

Liquid Capital founder Yi Lihua stated that a major bottom-fishing opportunity is coming, urging patience to filter out noise. Sell when the crowd is noisy and buy when no one cares, seize good assets and then go long on quantity. The three major assets that transcend cycles in the crypto space are: public chains (BTC, ETH, etc.), exchanges (BNB, Aster, etc.), and stablecoins (WLFI, Tether equity, etc.).

@Phyrex_Ni

The current rise in the risk market is essentially a product of the market "preemptively overdrawing" the Federal Reserve's easing expectations. The U.S. government shutdown and Trump's layoff plan have led investors to bet on an interest rate cut in October, causing U.S. stocks, cryptocurrencies, and gold to rise together, but this "celebration of a funeral" market is more driven by emotion. In reality, the Federal Reserve is still in a high-interest rate cycle, with rising inflation stickiness, slowing wage growth, and declining real purchasing power, while weak labor market data exposes structural risks in the economy.

On a macro level, the U.S. fiscal deficit continues to expand, with both U.S. Treasury yields and the dollar index rising, and gold prices strengthening simultaneously, reflecting that global funds are seeking refuge in the dollar while harboring doubts about the long-term repayment capacity of the U.S. In the short term, the data vacuum caused by the shutdown will continue to maintain optimistic sentiment, and funds may continue to flow into risk assets, but this is merely a "false prosperity without data." Once inflation data returns to high levels, the Federal Reserve will be forced to tighten policies, and the market may face a sharp turn.

@Corsica267

The current economic issues in the U.S. stem from the structural contradictions of weak demand and high debt. Long-term low interest rates and improved production efficiency have weakened investment returns and widened the wealth gap, while aging and slowing consumption further suppress growth momentum. In the face of this "high debt + low growth" dilemma, Treasury Secretary Yellen is resolving debt through a "financial repression" strategy: fixing interest rate ceilings, tolerating inflation, and attracting passive buyers to ensure that the nominal growth rate of the economy exceeds financing costs, thereby "grinding down" the debt burden.

This has led the market into a misalignment where "nominal interest rate cuts ≠ substantial easing." Even if the Federal Reserve cuts rates, if inflation expectations decline faster, real interest rates may actually rise, resulting in passive tightening. The current division of labor between the Federal Reserve and the Treasury is: the former stabilizes livelihoods, while the latter stabilizes government bonds. Fiscal easing supports asset prices, while the Federal Reserve faces a difficult choice between employment and inflation.

In terms of assets, tech stocks and gold can resonate and rise together. Tech stocks rely on a decline in discount rates and long-term growth expectations, forming a "productive bubble"; gold benefits from the dual premium of declining real interest rates and rising institutional uncertainty. The simultaneous rise of both essentially reflects a pricing consensus for the era of financial repression—capital expectations for real returns are declining, while safety and growth become the only certainties.

Future trends depend on:

If inflation is controlled and fiscal repression continues, risk assets and gold will still have support;

If inflation rises again and real interest rates increase, bubbles will be forced to deflate.

In short, this is an era where financial repression is exchanged for growth, and institutional premiums support assets—prosperity and risk coexist, and the peak of valuation is also the low point of institutional trust.

@JPMorgan

JPMorgan analysts noted in a report on October 1 that Bitcoin is expected to continue rising. The reason is the resurgence of the so-called "currency devaluation trade"—retail and institutional investors, concerned about geopolitical uncertainties, high global debt levels, and the weakening of the dollar's dominance, tend to hedge risks by allocating gold and Bitcoin.

More broadly, recent developments in the crypto industry indicate that it is steadily integrating into the mainstream financial system, including the launch of several new crypto ETFs and the rise of "crypto treasury stocks," showing that the capital market's acceptance and participation in this field continues to increase.

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