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BitGo CEO Mike Belshe said the lack of progress on the U.S. Clarity bill is leaving the crypto market exposed to ongoing systemic risk. Belshe said the main issue is a structure in which a single firm simultaneously operates a trading platform, brokerage and asset custody service. While the collapse of a brokerage alone could limit damage to part of the market, the failure of a firm running an exchange and custody services as well could spread the shock across the broader market.

Signs of recovering spot demand are emerging in Bitcoin on-chain data, according to CryptoQuant contributor MAC_D. Even so, more confirmation is needed before concluding the current uptrend is being supported by strong spot demand. As of Sept. 30, apparent demand growth improved to around negative 101,000 BTC on Oct. 1 from about negative 182,000 BTC on Sept. 24. The roughly 81,000 BTC improvement in a week still leaves the metric in negative territory, but suggests spot demand is recovering as the pace of contraction narrows quickly. By contrast, the Coinbase premium index remains negative, indicating spot buying pressure from U.S. investors has yet to show a clear recovery. The key issue in the current rally, MAC_D said, is the gap between Bitcoin's price and U.S. spot demand. The analysis suggests that even if Bitcoin extends gains and breaks above its previous high, the rally may prove less durable unless the Coinbase premium and on-chain spot demand improve together.

Bitcoin’s move toward the $88,000-$89,000 range is putting trading activity by investors who have held the asset for at least six months in focus, according to an analysis by on-chain analyst Darkfost. Darkfost said the average cost basis for holders in the 18-month to two-year cohort is around $88,350, while the figure for six- to 12-month holders is about $89,200. With the two groups clustered at similar levels, investor sentiment could shift sharply if Bitcoin enters that range. Darkfost added that holders with less than one year overall have continued to face losses, and some may have bought near the previous market peak, which could prompt selling as the price approaches their average entry level. At the same time, investors who endured prolonged losses may buy more Bitcoin to lower their average cost basis. With most nearing a return to profit, selling and additional buying could emerge at the same time.

Saifedean Ammous, author of The Bitcoin Standard, said Bitcoin treasury companies are unlikely to find it easy to compete with Strategy, according to an interview with Cointelegraph. Ammous said it was hard to find a compelling reason to choose another Bitcoin treasury company over Strategy, adding that Strategy’s large Bitcoin holdings help lower its funding costs and give it a competitive edge. He said Strategy had not been pushed close to liquidation even during sharp Bitcoin price declines, and added that the company has enough cash to cover dividend obligations, leaving it room to withstand a much deeper drop in Bitcoin prices than current levels. He also said companies that generate stable cash flow can allocate surplus cash not needed for operations to Bitcoin. At the same time, Ammous noted that investing in Strategy stock also carries risks and said he personally prefers holding Bitcoin directly.

Circle submitted comments on the European Commission’s consultation on MiCA, or the Markets in Crypto-Assets regulation, and proposed preserving the multi-issuance structure for global stablecoins. According to Circle, about 30 electronic money tokens, or EMTs, have been approved under MiCA, but only USDC, USDG and EURC among the top 25 stablecoins by global market capitalization are currently subject to MiCA rules. Circle argued the current structure should remain in place so an EU entity authorized under MiCA and an entity authorized by an overseas regulator can jointly issue a single globally circulating stablecoin. Circle also recommended a framework under which the regulator in the issuer’s home jurisdiction would take primary supervisory responsibility, while the EU would handle regulatory equivalence assessments and recognition of entities by the European Banking Authority, or EBA.

Aave founder Stani Kulechov expressed disappointment with regulatory discussions by the European Central Bank and the European Banking Authority related to MiCA, saying proposals to require suitability reviews for DeFi users and apply certification rules to DeFi lending protocols are concerning. Kulechov said such measures could create a more closed financial ecosystem and reduce access to open financial networks.

Cross-chain decentralized exchange THORChain (RUNE) announced the official launch of its ZEC pool. With the network’s node rotation process now complete, all nodes have begun monitoring the ZEC blockchain, enabling permissionless trading for ZEC. The pool’s liquidity remains low for now, however, and the project said early trading requires caution even as liquidity is expected to increase over time.

BitMEX co-founder Arthur Hayes said at Cointelegraph’s Seoul Connect event that crypto prices could rise if the U.S. expands its money supply to support the artificial intelligence industry and finance government debt. Hayes added that demand for scarce assets could also increase if China shifts from limited tightening to large-scale monetary stimulus, and said he is watching pressure in French financial markets, including credit default swaps linked to BNP Paribas and spreads on French government bonds.

South Korean exchange Bithumb announced the temporary suspension of STRK deposits and withdrawals at 10:00 a.m. UTC on Oct. 4 to support the Starknet network upgrade.

South African financial institution Absa Bank has launched Africa’s first institutional-grade cryptocurrency custody service, Crypto Briefing reported.

Crypto custody firm Copper has started offering Hyperliquid (HYPE) perpetual futures trading to institutional investors, The Block reported. The service lets clients trade Hyperliquid perpetual futures through Copper while keeping assets secured in Copper’s non-custodial MPC infrastructure.

Forward Industries, the largest corporate accumulator of Solana, said it bought an additional 949,000 SOL over the past quarter, raising its total holdings to 8.5 million SOL. The amount is equal to about 1.4% of SOL’s circulating supply.

A suspected Aave team-linked address sold 50,000 AAVE on-chain over the past week, worth a total of $8 million, AmberCN said. The address currently holds 30,000 AAVE, valued at $5.5 million.

Citi raised its target price on Strategy (MSTR) to $240 from $136 and maintained a Buy rating after increasing its 12-month Bitcoin price forecast by 39% to $113,400, Walter Bloomberg reported. Citi estimated about 34 percentage points of the target-price increase would come from Bitcoin’s price gains, while an additional 16 percentage points would be driven by an expansion in mNAV, or market value relative to net asset value. Citi also raised its Bitcoin Yield Multiple for Strategy to 4.0x from 2.5x and, based on that change, assumed an mNAV of 1.24x.

Software company Utexo plans to issue USDT on the Bitcoin network this month, CoinDesk reported. Utexo has secured a commercial license for Bitcoin-based USDT issuance and plans to provide APIs, SDKs and cloud infrastructure to exchanges, wallets and payment service providers. The company had previously entered into a partnership with Tether and said it would lead USDT issuance and distribution on the Bitcoin network.

Polygon has launched a stablecoin-based euro-dollar exchange pool that is not tied to traditional bank foreign-exchange market hours. Monerium, Frax and Capa launched the EURe/frxUSD trading pair on Uniswap V3, enabling direct swaps between regulated euro liquidity and dollar-denominated stablecoin liquidity in Polygon-based applications.

Aave V4 topped $1 billion in deposits for the first time in September, while lending volume grew to about $310 million. Aave also expanded into an institutional market built around stablecoins and a market for tokenized stocks, and deployed its protocol on Circle’s ARC and Base.

Aptos deployed a new validator hotfix on its testnet. The “Aptos Node V1.49.2 Hotfix,” released on Oct. 1, is a private hotfix, and Aptos has not disclosed the source code. Instead, it instructed node operators to use the attached binary or Docker image.

Optimism (OP) has unveiled a major update to its Rust-based fault proof system, focused on improving consistency so data derivation and proof execution produce the same results as other components of the OP Stack.

Hyperliquid is expected to receive its first AQAv2 reserve yield distribution, according to Hyperliquid Hub. About 14.5 million USDC generated from USDC reserves could flow into the assistance fund and be used for additional HYPE buybacks.

The European Central Bank has outlined three ways to use central bank money on blockchain-based networks, The Block reported. The options are direct issuance by the central bank, a bridge linking existing systems, and a model using private intermediaries. The proposals are aimed at enabling tokenized securities, deposits and stablecoins traded on blockchain networks to be settled in central bank money.

SMBC Nikko Securities said it will develop regulatory-compliant DeFi infrastructure for Japanese investors with Nethermind, an Ethereum core developer. Uniswap Labs, Base and the Nyx Foundation will also take part. The group plans to build a "DeFi Gateway" consisting of a liquidity provision protocol and proprietary liquidity pools. Its main tasks include developing AI-based agent vaults and interfaces, applying AML/CFT and investor protection features through Uniswap v4 hooks, and creating liquidity provision strategies for digital assets such as stablecoins and real-world assets, or RWA. The project is targeted for completion by mid-2027.

South Korean exchange Bithumb announced it will end trading support for DAR Open Network (D) and Hooked Protocol (HOOK) at 6:00 a.m. UTC on Nov. 2. The exchange said the foundations’ explanatory materials did not sufficiently resolve the reasons for the investment warning designation, and after a comprehensive review of the projects’ disclosures, utility and business performance, it decided they no longer met its standards for maintaining trading support.

South Korea’s five largest won-based exchanges are now reconciling actual crypto holdings against internal ledger balances at intervals of under five minutes, Financial News reported on Oct. 2, citing data submitted by South Korea’s Financial Supervisory Service to the office of Democratic Party lawmaker Kang Jun-hyun. At the time of Bithumb’s mistaken Bitcoin payout incident in February, three of the five exchanges were conducting reconciliations only once a day, but the system was strengthened after South Korean financial authorities ordered the establishment of an always-on balance reconciliation framework.

Crypto trader Killa said on X that BTC is showing a clear trend reversal, while the market still appears skeptical of the rally despite those signals. Killa said any price pullback should be bought quickly and aggressively. Killa added that during the 2023 bull market, breaks below major lows were capped at as much as 8%, with some limited to 4% to 5% before the uptrend resumed. Using $82,500 as the current key low, Killa said further downside may also remain limited, while adding that leverage should be kept low and risk should be managed.