October 2025 started off exceptionally promising for Bitcoin. In the first week of the month, $BTC reached another #ATH, hitting a level of over 126,000 dollars, coinciding with historically the best period for the crypto market – the fourth quarter of the year. However, within just a few days, the situation underwent a dramatic change. On October 10, the market experienced one of the most brutal flash crashes in cryptocurrency history, resulting in #Bitcoin dropping to a level of 104,000 dollars, losing nearly 17% of its value within a few hours.
This sharp decline was not caused by technical factors or internal blockchain issues, but by escalating geopolitical tensions between the United States and China. President Donald Trump announced the imposition of 100% tariffs on all goods imported from China and the threat of imposing export controls on critical software, which triggered panic in global financial markets. In just one weekend, nearly $400 billion evaporated from the cryptocurrency market, and liquidations with leverage reached a record $19 billion, affecting around 1.6 million traders.
Paradoxically, after Trump confirmed a meeting with President Xi Jinping, which is set to take place on October 31 during the APEC summit in Seoul, the markets rebounded, and Bitcoin regained some losses. This sharp volatility demonstrates how dependent the cryptocurrency market is on macroeconomic and geopolitical factors that extend far beyond traditional technical or fundamental analysis of Bitcoin itself.
In this context, the key question becomes: will the statistically favorable period of #Uptober and the fourth quarter bring the expected gains, or could external threats jeopardize the chance for a continued bull market? Let's take a detailed look at the fundamental factors that may influence Bitcoin's price in the coming weeks.
Statistics vs. current situation
We already know that currently Bitcoin is in a period conducive to growth. Let's take a look at what the macro environment says.
October, although it started very well for the crypto market, saw the largest flash crash in crypto history on October 10. Hundreds of billions of dollars evaporated from the market simultaneously, causing liquidations of nearly $20 billion.
The reason was the threat of reigniting the trade war between the U.S. and China. After just a week, we already know that the leaders of both countries have no choice but to reach an agreement, or they will destroy the economy in their own countries.
Consequently, looking at the scale of the declines that occurred on October 10, we can state that the market's reaction was exaggerated. This event was a classic example of market panic, where fear and uncertainty triggered a spiral of forced selling, particularly among traders using high leverage.
After Trump confirmed the meeting with XI, which is set to take place on October 31, the markets rebounded, so it seems that the worst may be behind us. Bitcoin and Ethereum gained 2-3% respectively, while altcoins such as Solana and BNB recorded increases exceeding 4%. The global market capitalization of cryptocurrencies rose by over $50-100 billion in response to this news, suggesting that optimism is "slowly" returning to the market.
The amount of stablecoins in circulation is increasing!
Since the crypto market crash, #Tether and #Circle have minted as much as $6 billion in stablecoins! A lot. In the last 30 days, they have introduced a total of over $14 billion into circulation.
Increasing liquidity is certainly good news. During the last bear market, we saw that the supply of stablecoins was regularly decreasing. Therefore, it is possible that this is not the end of the bull market.
Furthermore, the total supply of stablecoins reached a record level exceeding $304 billion in mid-October 2025. This is an impressive increase of 72% compared to the previous year, reflecting growing institutional interest and capital inflow into the cryptocurrency ecosystem. Tether $USDT and Circle $USDC remain dominant players, controlling over 85% of the entire stablecoin market.
The particularly significant fact is that in the first week of October, directly before and after the crash on October 10, the supply of stablecoins increased by another $6.155 billion. This suggests that investors – both institutional and retail – are not fleeing the crypto market, but rather rotating capital into safer assets while waiting for further buying opportunities.
Historically, the increase in the supply of stablecoins is considered a leading indicator of price increases in cryptocurrencies. When the supply of stablecoins rises, it indicates that there is more "dry powder" in the market ready to be utilized for purchasing Bitcoin and other cryptocurrencies.
FED policy
On October 29, we have another meeting of the American central bank, during which we will learn the decisions regarding the next interest rate cut. The market expects a 99% chance of a 0.25% cut, and this is likely to happen. However, that will not be the most important aspect of that day.
During the next meeting, a decision will also be made regarding further monetary policy in tightening quantitative easing. This month, #FED Chairman Jerome Powell announced that the period of quantitative tightening (QT) is coming to an end and will likely conclude within a few months.
However, it is worth knowing that if such a decision is made, it will be announced during the central bank meeting! And already now, economists are increasingly speculating that the end of the QT program may occur as early as this month. Therefore, it is worth watching what decision will be announced on October 29, as if the QT program comes to an end, the market may interpret it very positively.
The end of QT combined with the continuation of interest rate cuts would mean a return to a more accommodative monetary policy, which historically has been a strong positive signal for risky assets, including cryptocurrencies. Analysts from Coinbase Institutional point out that their Global Money Supply M2 Index, which historically leads Bitcoin by about 110 days, opened the fourth quarter with a favorable stance. The firm also expects two additional rate cuts from the Fed before the end of the year, which could attract capital from money market funds back to risky assets.
Regulations in the U.S.
Since October 1, the U.S. government has remained shut down due to a lack of agreement on the budget for the new year. The main downside of the government shutdown is that the #SEC is operating with a limited staff. One of the main departments responsible for approving new #ETF products for the American market is not functioning during this period. Therefore, until the government resumes operations, we will not have any new ETFs in the crypto market.
There is, however, a glimmer of light at the end of the tunnel, as White House advisor Mr. Hasset revealed yesterday that the government shutdown is likely to end this week.
If this is true, it is worth watching which ETFs will be launched first and how the market will react.
October 2025 was originally referred to as the "month of ETFs," as the SEC had final deadlines to make decisions on as many as 16 applications for spot ETFs on various cryptocurrencies. These applications included popular altcoins such as Solana (SOL), XRP, Litecoin (LTC), Cardano (ADA), and even the memecoin Dogecoin (DOGE).
Moreover, the SEC adopted new general listing standards in September 2025 for exchange-traded products based on spot commodities, including digital assets. This change in procedures was supposed to dramatically simplify the ETF approval process by eliminating the need for individual rule changes for each product. Bloomberg analysts, including Eric Balchunas, estimated the approval chances at "100%" for most of these 16 applications.
However, the government shutdown has caused the SEC to be unable to review registration applications. All these functions are suspended until funding is resumed.
If the government shutdown indeed ends in the coming days, as sources in the White House suggest, we can expect the rapid approval of many pending ETFs. The first in line are the Litecoin ETF from Canary (deadline October 2, which has already passed), the conversion of Grayscale trusts to Solana and Litecoin (deadline October 10, which has already passed), and the XRP fund from WisdomTree (deadline October 24).
The approval of these ETFs could trigger a new wave of institutional capital flowing into the crypto market and potentially start an "altcoin season." Historically, approvals of spot ETFs for Bitcoin and Ethereum have led to record trading volumes and capital inflows – in just the third quarter of 2025, over $18 billion flowed into U.S. spot ETFs for BTC and ETH.
Threats and negative scenario for Bitcoin
Although statistics and many fundamental factors favor a continuation of growth in the fourth quarter, the cryptocurrency market faces a series of serious threats that could ruin optimistic forecasts. The October #flashcrash was a clear warning that external shocks can erase weeks of gains within hours.
Escalation of the U.S.-China trade war
The most immediate threat remains the possibility of escalating trade conflict between the United States and China. Although Trump confirmed a meeting with Xi Jinping on October 31, there is no guarantee that the negotiations will end successfully.
The current situation is extremely tense. Trump announced 100% tariffs on all Chinese goods starting November 1, and China responded by imposing 125% tariffs on U.S. exports and controlling the export of rare earth metals that are critical for semiconductor production, artificial intelligence, and defense technologies. Experts warn that we are witnessing "the most intense trade war since 2019," and some analysts suggest that both sides are effectively in a "de facto trade embargo."
If the talks on October 31 fail or if Trump decides to further tighten sanctions, we may see a repeat or even a deepening of the October flash crash. Academic studies confirm that cryptocurrencies have limited effectiveness as a geopolitical hedge compared to gold and are particularly sensitive to trade tensions. In 2025, Bitcoin fell by 17% after Trump announced 100% tariffs, while altcoins like Solana experienced even sharper declines.
Recession risk and business cycle
The second major threat concerns the impending economic recession, which could trigger the first true bear market in the crypto market resulting from the business cycle rather than internal cryptocurrency factors.
Noted analyst Willy Woo warned that the next bear market will be "particularly brutal" and driven by a business cycle downturn that the crypto market has never experienced before. Woo explained that previous crypto bear markets were associated with predictable four-year patterns related to Bitcoin's halving.
"The last declines of the business cycle that really took hold occurred in 2008 and 2001, before crypto markets were invented," Woo said.
"Will Bitcoin drop like tech stocks, or will it drop like gold?" – the answer remains unknown since cryptocurrencies have never been tested during a traditional economic slowdown.
A business cycle recession is characterized by a decline in GDP, rising unemployment, decreasing consumer spending, and slowing business activity. Woo emphasized that crypto markets do not exist in isolation and are affected by these broader economic cycles, particularly through their impact on liquidity. Historical downturns, such as the dot-com bubble in 2001 (50% decline in S&P 500) and the financial crisis in 2008 (56% decline in S&P 500), could similarly impact crypto markets.
Additionally, trade tariffs have complicated the current cycle, affecting GDP growth in 2025, and they are expected to continue into 2026. Although, according to the National Bureau of Economic Research (NBER), there is no direct threat of recession, the risk remains elevated. Some analysts warn that we are witnessing "the end of a 16-year bull cycle in stocks," which coincides with the entire 16-year history of Bitcoin – which would mean that cryptocurrencies may experience their first secular bear market alongside traditional assets.
Summary
Combining all these risk factors, it is worth watching the upcoming events such as:
U.S.-China negotiations on October 31 - what will be the outcome of the talks.
The FED decides on QT and interest rates
U.S. government shutdown - an overly long shutdown may cause excessive regulatory uncertainty among investors.
Economic recession - we should watch for visible signs of the end of the 16-year cycle in the global economy.
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