Bitcoin and Ether Rally on Hard-Asset Bid as Crypto Stocks Rise

A rebound after a rough week

Bitcoin and ether had their strongest day in months this week as investors moved back into scarce assets. The bounce came after a week that tested even committed holders. Ether traded near $2,495 on October 10, almost 7% below where it stood a week earlier and about a third below its level a year ago.33 On the morning of October 9, bitcoin was near $83,100, down roughly 4% for the week, and ether was down close to 9% over the same period.39 The selling showed up in fund flows. Ether exchange-traded funds recorded nine straight sessions of net withdrawals, and their combined assets fell from $17.69 billion on October 5 to $15.71 billion on October 9.34

The scale of that drop needs context. Only about $542 million of the decline came from investors pulling money out. The other $1.44 billion was the falling ether price shrinking the value of the funds' holdings.34 Daily outflows also eased through the week, from $201.9 million on October 6 to $56.1 million on October 9. That looks more like selling running out of steam than institutions giving up.34 Bitcoin ETFs lost $731 million over two days and then turned positive on October 9.34

The rebound fits a pattern that runs through most of the recent coverage: the bigger picture has been improving even when individual days look bad. Bitcoin rose about 28% in the two months to October 8. That is a sharp turn for an asset that was 52% below its record at one point earlier this year.36 Ether had its best third quarter on record, climbing 70.8% from its lows.38

The 'hard assets' story is really about debasement

The phrase "flocking to hard assets" can sound like crypto enthusiasm. Most analysts trace this rally to government policy instead. In Saxo's account, the turn began on August 19, when the U.S. Treasury said it would at least double its buybacks of long-dated bonds. That revived the argument that loose fiscal and monetary policy erodes the value of currency over time, which tends to help assets with fixed or predictable supply.40 In the week to August 21, bitcoin gained about 23%, its best week since 2023.40

The wider economy supports the same reading. On October 5, gold futures were around $4,165 an ounce and Treasury yields reached their highest level since 2002.48 Weak jobs data added to it. The Bureau of Labor Statistics reported only 29,000 jobs added in September, against roughly 89,000 expected, which raised hopes that the Federal Reserve would pause.42 With traders betting less on an October rate hike, bitcoin held above $86,000 at the start of the month.46

The weakness in this case is that bitcoin is still mostly a macro trade. Saxo says the rally depends on the debasement narrative holding up. Firmer inflation data, a more hawkish Fed or falling long-term yields could remove that support quickly.40 Both bitcoin and ether were also still down for the year even after the late-summer surge.40 Crypto has outperformed traditional assets over the past three months.31 Even so, it is recovering from a deep low, not continuing the last bull market. Bitcoin's record above $126,000 was set in October 2025.46

This week was also the first anniversary of October 10, 2025, when more than $19 billion in leveraged positions were wiped out within 24 hours after a tariff announcement.37 Since then, liquidity has returned to bitcoin and ether, largely through ETF and institutional buying, while smaller tokens have lagged.37 In practice the market now runs at two speeds. The two largest assets behave more like institutional holdings, and everything else trades like a high-risk bet.37

Crypto stocks are a leveraged version of the same trade

Listed crypto companies have mostly amplified each move in bitcoin. On October 5, with bitcoin near $86,679, Coinbase rose about 4%, Circle 3.75% and Strategy 3.13%, with Gemini and SharpLink also gaining around 4%.49 Pre-market trading on October 9 showed similar broad gains across Strategy, Coinbase, BitMine, Circle and Robinhood.45 Coinbase finished that session up nearly 5% at about $180.5.47

The stock prices show how far the sector still has to go. Coinbase's market value was about $47.3 billion, roughly half its level a year earlier, against a 52-week high of $402.16.50 The exchange is moving further into institutional business, adding custody, financing and access to derivatives through its Deribit integration.47 Analysts are divided. Citizens cut its Coinbase price target from $325 to $280, while Morgan Stanley raised its target slightly to $258.43 Circle carries a different kind of exposure. It earns interest on the reserves behind USDC, so interest rates and the amount of USDC in circulation matter more to it than the bitcoin price.46

Treasury companies keep buying

Bitcoin treasury companies, which hold bitcoin on their balance sheets as their main investment, keep raising money to buy more, rally or not. Strategy held 848,000 bitcoin as of October 4. It paid $63.97 billion in total, an average of about $75,441 per coin.11 Its latest filing estimated a $20.91 billion gain on digital assets for the third quarter, along with $1.88 billion in deferred tax expense.14 Strive bought 2,000 bitcoin, funding 61.5% of the purchase with borrowed money. Metaplanet added 1,000.20 Metaplanet is now the second-largest corporate holder, with about 44,000 bitcoin.13

Those headline figures hide a more mixed picture. As of October 4, Strategy reported a year-to-date "BTC Yield" of negative 3.7%, its own measure of bitcoin held per share. That means each share now represents less bitcoin than it did in January, because new shares were issued and financing costs added up.11 Its dollar reserve fell from $5.02 billion to $4.88 billion in one week, after it paid preferred-stock dividends and interest.11 Over a similar period it spent $142.5 million on dividends and interest.14 A business that pays fixed obligations out of a cash buffer, while its main asset produces no income, depends on investors continuing to fund it.

Investment banks are still encouraging. B. Riley raised its Strategy target to $19512, and Siebert set a $350 target.20 Index providers are a more immediate risk. MSCI has proposed a rule for non-operating companies, and its own simulation shows Strategy and Metaplanet would be removed from its indexes. A decision is due by October 16.19 JPMorgan estimated in 2025 that removal could cause about $2.8 billion in outflows from Strategy.19 Strategy reports third-quarter results on October 29.16

Public data on the sector is not always reliable. One widely circulated statistics page still puts Strategy's holdings at about 129,699 bitcoin, a fraction of what its filings show.18 Its regulatory filings are the source to trust.

Custody banks: growing interest meets a lawsuit

The most important structural change may be in banking, not trading. Payments infrastructure company Modern Treasury has applied to the Office of the Comptroller of the Currency (OCC) to form a limited-purpose national trust bank. It would hold stablecoins and dollars for customers but would not issue stablecoins or make loans.30 Stablecoin payments firm Rain followed with an application for a New York trust bank. That bank would hold digital assets and dollars, manage reserves for stablecoin issuers, and issue and redeem dollar-backed tokens. It would not take deposits or carry FDIC insurance.26 CoinDesk counts Rain as the 12th crypto firm to seek such a charter.26 Circle, Ripple, BitGo and Fidelity were among five firms that received initial approvals in December, and Circle received final approval in late July.26

The charter route is now being challenged in court. On October 2, the Independent Community Bankers of America (ICBA), a community bank trade group, sued the OCC in federal court in Washington, D.C. It is asking the court to overturn a charter rule that took effect April 1, a 2021 OCC guidance letter, and the conditional approval of Protego, a Seattle crypto firm.25 The complaint says the OCC has approved or conditionally approved 21 trust banks under the current administration, at least 13 of them crypto companies.25 ICBA argues the charters let crypto firms skip the capital rules, consolidated supervision and community-lending obligations that insured banks face.28 The OCC says its rule neither expands nor narrows its chartering authority.25 Filing the lawsuit does not suspend any existing charter.25 The fact that applications kept arriving after the suit was filed suggests the industry expects the legal risk to be manageable.

Agencies are filling the gap Congress left

This rally has happened without the comprehensive law the industry wanted. The CLARITY Act, the bill meant to set rules for crypto markets and divide oversight between regulators, failed a procedural Senate vote on September 15.9 Most reports give the tally as 49 in favor and 50 against29, although USA Today's account reversed the numbers.6 Either way it fell far short of the 60 votes needed. The main disputes were ethics rules covering officials' crypto holdings and whether stablecoins should be allowed to pay yield.2 Senator Tillis entered a motion to reconsider, which keeps the bill technically alive. Orrick and others still consider passage in this Congress unlikely.2

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) moved quickly to write rules under their existing powers.7 The CFTC sent a proposed crypto market framework to the White House for review5, and SEC Chair Paul Atkins announced an exemption for trading tokenized stocks.10 Rules written by agencies have limits. Troutman Pepper notes that the bill's bankruptcy and anti-money-laundering provisions cannot be recreated by regulation, and that agency rules can be reversed by a future administration.4

The takeaway

The rebound is real, and it is backed by money that can be measured through disclosed ETF flows and continued corporate buying. But it rests mainly on macro forces. The plumbing underneath is still unsettled. Custody charters face a lawsuit, market-structure rules come from agencies rather than Congress, and Strategy, the largest treasury company, is adding bitcoin while its bitcoin per share falls. The industry has not yet fully recovered.