Hi all, happy Wednesday. Markets are treading water as traders balance fading momentum with solid structural support. BTC holds near $108K, ETF inflows have softened and positioning looks cautious but orderly. Meanwhile, after years of neglect, BTC mines are having their time in the spotlight. 

Equity markets traded mostly sideways this week as risk assets consolidated following recent strength. The S&P 500 (+0.3%) and Nasdaq 100 (+0.4%) held modest gains, while Gold (-0.2%) stayed rangebound. Crypto equities lagged broader markets despite stabilizing late in the week and ended flat after recovering from midweek lows near -5%. The overall tone leaned neutral-to-risk-off, with investors waiting for fresh catalysts amid quiet macro data and earnings-driven positioning.

Crypto subsectors diverged sharply. AI-linked tokens were the standout, briefly surging midweek before closing the week near even. L2 and modular ecosystems underperformed, falling roughly 10-15% from the week’s open, reflecting cooling momentum after recent rallies. Solana ecosystem names also slipped, tracking broader altcoin softness, while crypto miners extended their slump, under pressure from declining BTC hash price and weaker sentiment in energy-sensitive assets. The pullback suggests selective rotation rather than a wholesale exit from risk.

Macro conditions offered little directional impulse. Treasury yields eased slightly, but risk appetite remained muted ahead of upcoming inflation and GDP data. With earnings season and key inflation prints ahead, short-term reactivity could rise. Crypto’s relative weakness vs. equities may persist until clearer macro or onchain catalysts emerge.

— Marc

Rotation without conviction

BTC holds ~$108K as ETF flows wobble and rates dip, while perps positioning looks cautious but not capitulated. The broader market seems hesitant to chase strength at these levels, with traders opting to protect gains rather than add risk. However, funding rates remain neutral, suggesting no extreme leverage buildup or panic selling despite softer sentiment.

The tape says “buy the dip, sell the rip” and spot is resilient around $108K, but weekly ETF flows softened and options skew implies demand for downside protection into Friday. This pattern points to a range-bound environment driven by short-term positioning and liquidity rotations rather than conviction buying. Still, structural support from longer-term holders continues to underpin price action, limiting the depth of pullbacks for now. Similarly, we also saw ~$500 million of net inflows into BTC ETFs yesterday.

Derivatives positioning looks cautious. Open interest has cooled and rallies stall quickly, consistent with fading impulse rather than trend reversal. Macro’s not helping either, as higher-for-longer rate chatter, tariff concerns and wobbly financials have kept risk appetite uneven. For now, traders appear content to stay light and reactive, with volatility compressing as markets wait for a clearer catalyst to define the next leg.

—  Marc

The megawatt trade: Are bitcoin miners just getting started?

A sudden outage at AWS’s US-EAST-1 region on Oct. 20 reminded everyone that the internet’s backbone still runs through a handful of centralized choke points. The issue stemmed from DNS resolution failures inside an internal network subsystem, knocking millions of users offline for hours. The incident underscored just how critical resilient, distributed compute capacity has become in an era increasingly shaped by AI.

It’s moments like these that highlight why interest in more distributed forms of compute is growing, where power and resiliency matter as much as scale. Bitcoin miners, facing margin pressure since the halving as hash price falls and network hash rate climbs, are leaning into that shift. With access to cheap energy and industrial-grade infrastructure, they’re finding the next frontier isn’t more bitcoin: It’s more compute. Many are already recasting themselves as power-first infrastructure businesses built to serve future demand. 

Crypto miners have left nearly every other sector in the dust this year. Our Crypto Miners Index is up roughly 130% year to date, far outpacing both traditional crypto equities and broader benchmarks like the S&P 500.  As data center demand soars and power capacity becomes the new currency, miners are no longer priced as just “bitcoin plays” but as critical infrastructure providers. That re-rating has pulled capital back into the sector, setting the stage for the next wave of deals and build-outs.

Activity across the mining sector is heating up as the AI-compute trade accelerates. CleanSpark recently brought on Jeffrey Thomas, formerly of Humain, to lead its new AI data center division. Bitfarms raised $500 million through convertible notes to expand its power and HPC footprint. CoreWeave’s proposed ~$9 billion all-stock acquisition of Core Scientific, set for a shareholder vote on Oct. 30, has become the industry’s main event. Recently, proxy advisor Institutional Shareholder Services (ISS) recommended that shareholders vote against it, with critics arguing the offer undervalues Core Scientific. However it plays out, it’s a reminder that miners’ real advantage lies in the power they already control.

Zooming out, capital is starting to value megawatts. Macquarie’s ~$40 billion sale of Aligned Data Centers to a BlackRock-led group values ~5GW of operational and planned capacity at an implied ~US$8 million per MW. For listed miners, the market is drifting toward a megawatt lens but it is still early days. The leaders are already turning megawatts into AI cash flows (higher revenue per MW and steadier, longer-dated contracts), setting the pace for the re-rate. IREN illustrates the trend — guiding to >$500 million in AI-cloud ARR by Q1 2026 and now standing out as one of the best-performing miners YTD. 

— Sam

1. Jito Cryptoeconomics SubDAO Quarterly Update

The Jito DAO released its first-ever Cryptoeconomics SubDAO Quarterly Update, outlining how the CSD is evolving the network’s value accrual model. Since JIP-24, all Block Engine and BAM fees now flow to the DAO treasury, with 100% of revenue deployed toward continuous JTO buybacks ($2.5 million executed since August 2025). It consolidates progress on three mechanisms: The Vault, JTO Auction, and Enhanced TWAP — all designed to automate programmatic value accrual and reinforce the DAO’s token economics.

2. ‘OK Doomer’ — Rejecting Crypto Pessimism

An X thread by @defi_monk of Syncracy Capital pushes back on growing pessimism in crypto. It accepts real issues, broken tokenomics, grift and weak projects but argues the negativity misses the bigger picture. Since 2009, the space has built resilient peer-to-peer networks, instant stablecoin rails, onchain lending/derivatives and new ways to raise capital. The post notes that because early-stage crypto projects trade publicly, the natural startup failure rate is more visible, but the sector is still laying the groundwork for its long-term winners.

3. Galaxy Announces Third Quarter 2025 Financial Results

Galaxy Digital (GLXY) reported a record Q3 2025 with net income of $505 million (EPS $1.01), adjusted EBITDA of $629 million (+198% QoQ), and adjusted gross profit of $728 million. Trading volumes surged 140%, including an $9 billion bitcoin sale, driving strong results across Global Markets and Asset Management. The firm ended the quarter with $3.2 billion in equity and $1.9 billion in cash/stablecoins. Galaxy also secured $1.4 billion in financing for its Helios AI data center, with partner CoreWeave committing to the full 800 MW capacity. The new GalaxyOne platform launched in October, alongside a $460 million equity investment to fund expansion and support growth.