The Breakdown - Bitcoin’s Favorite Month Has Arrived

Episode Date: October 3, 2025

October has a reputation as Bitcoin’s strongest month, and so far 2025 is no exception. After a choppy September, BTC is already pushing back toward new all-time highs, shrugging off a government shutdown and showing signs of strong demand. Analysts are debating whether this is the setup for another monster Q4, with some even eyeing $200,000 by year end. We also look at how the shutdown is stalling crypto ETF approvals, new IRS guidance that saved MicroStrategy billions, Stripe’s stablecoin launch, and why some believe Tether could become the world’s most profitable company. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/@TheBreakdownBW Subscribe to the newsletter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://blockworks.co/newsletter/thebreakdown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownBW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Thursday, October 2nd, and today we are talking October. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. All right, friends, well, the leaves are turning, the pumpkin drinks are back on the menu, and the unequivocal, single best month of the year has begun.

October also seems to be Bitcoin's favorite month of the year. While some were concerned the September struggles would continue, price action over the past few days makes it feel like October has indeed arrived. Wednesday saw Bitcoin gain 3.7% to rise above $118,000 for the first time since mid-August. With only one trading day in the books, October is already looking good compared to the choppy September that saw just 5.2% added to the price. Stack Hoddler wrote, Welcome to October.

Now that Bitcoin has bored us all to death, it's time for it to remind us why it's the apex asset. We're up 91% in the past year, but sentiment-wise, this feels more like a bottom than a top. Everyone has forgotten about Bitcoin. Even the bears have mostly moved on, no point in shorting a stable coin. But this is exactly the setup that Bitcoin thrives on.

There's zero froth in this market, and yet we're only 6% away from a new all-time high. If we shoot past 124K in the next week or two, the Monster Q4 could become a self-fulfilling prophecy, as everyone realizes that history is about to repeat. Other analysts noticed that Bitcoin didn't care one single iota about the government shutdown. If anything, the strong positive moves as the news broke in the early hours of Wednesday morning, seemed to suggest that Bitcoin is being used to hedge government dysfunction. Bitcoin and risk assets more generally have a mixed history with government shutdowns,

but the most recent one from 2019 began as a risk-off event before giving way to a risk-on rally. This shutdown looks risk-on from the start with U.S. stocks put, in a solid green day alongside a big rise for Bitcoin. QCP Capital commented in their research note on Wednesday that, on fiscal theater, the U.S. government shutdown should be a market non-event beyond data delays and headline noise. Essential services continue, backpay limits income effects, and past episodes have not derailed risk assets.

Given Bitcoin's elevated beta to equities, we see shutdown-related dips as buy opportunities rather than chasing gap ups. Speaking of chasing gap ups, Chris Berniski of Placeholder Ventures tweeted, people have been so skittish that October may punish the hedgers bigly, hearing from desks that Q3 ended with quite a bit of selling, much of which has abruptly paused now that we've entered Q4. However, that doesn't mean he thinks it's a good idea to push all of the chips into the middle of the table, adding, I still think it's a general time to be booking some profits, psychologically easier to do so on the way up. I'm a consistent but patient seller at these

levels and higher for most crypto assets. CryptoQuant believes that Bitcoin could go as high as $200,000 by year end if demand holds up. They noted that spotting, demand for Bitcoin has been consistently rising since July. Looking back over the past two cycles, they highlighted large increases in demand, kicking off in October of 2020, 2020, 2021, and 24. Crypto-Quant's bull score index was between 40 and 50 over the final few days in September. That same high level was sustained heading into Q4 of 2024 just before Bitcoin made its first run above 100K. They wrote, these levels represent the threshold before conditions turn to bullish according to the index. Now, balancing out the bull take slightly, K-33 warned that the government

shutdown in China's Golden Week holiday combined to make the present very uncertain. K-33's head of research, Velté Lunday wrote, Bitcoin typically behaves flat during the early October Asian holiday season. Lunday warned that the dual events could lead to the order books thinning out and erratic price action, especially over the next two weeks. While their data does show that golden week period over the first half of October is usually flat, there have been two very notable exceptions, 2021 and 2017, two years where Bitcoin entered October looking to take a run at all-time highs. With Bitcoin just a 5% move away from making a new high, to some it feels like 2025 has a lot of similarities to those two years.

Bitcoin trader Mr. Anderson remarked on just how stable things have been recently, especially given how much complaining and freaking out there was in September. He tweeted, 147 straight days above 100K. Less than 11 months ago, Bitcoin was 67K with an all-time high of just 73K. Now we've been holding six figures for nearly five months, and people have been acting like it's a funeral. This is the paradox of markets. At 67,000, everyone dreamed of 100,000. Now, while holding above 100,000 daily for five months,

the majority have cried bare market. That's not analysis. That's complacency. Complacency blinds you. It convinces you that greatness is normal and that opportunity is boring. But opportunity never looks like fireworks when you're in the middle of it. It looks like stability, quiet ranges, and patience being tested. The truth is that Bitcoin has gone from 58K to 124K in under a year, all while being on a three-year 8x run off the 16K bottom. It has sustained levels that were once thought of as a dream 11 months ago, and the ones complaining are the ones who will miss the next leg higher as well. Now, normally, this much consensus euphoria on the timeline would be cause for concern, but not in October, baby. As CMS Holding said, happy October to those who celebrate.

Now, while the government shutdown has not disrupted price action, it has thrown off the plans of asset managers. Heading into the month, analysts expected numerous new crypto ETFs to go live, now those plans are in limbo as SEC staff are furloughed. According to a notice posted to Twitter, the SEC will be operating with a very limited number of staff members and all non-emergency functions will cease. That sadly includes the approval of crypto ETFs. We have no idea how long the shutdown will last, but neither side seemed ready to budge even an inch on Wednesday. A person familiar with the shutdown process told the block, the short answer is, we don't know for sure. The normal sane answer during regular shutdowns is the SEC went home today. However, the source added,

there's some small chance that SEC Chair Paul Atkins is so positively inclined towards these crypto products that he has created an exemption to get them to market even during a shutdown. Now, that seems like it would be a wild turn of events, but this is crypto and we've seen much stranger things happen. Still, by all accounts, the products are on the one yard line and essentially ready to go at a moment's notice. Sources say the division of corporate finance has been actively reviewing the applications and a flood of recent revisions implies that's the case. Now, all coin ETFs are just one part of a very thorough crypto agenda at the SEC that includes asset tokenization, crypto and 401ks, and a ton of rulemaking. Alas, all of that is on hold for

now until the government shutdown ends. Meanwhile, new IRS guidance saved micro-strategy billions in taxes. On Tuesday, the IRS and the Treasury Department issued guidance around the 15% corporate minimum tax. They clarified that companies can exclude unrealized gains on digital assets from their taxable profits. At the beginning of the year, national accounting standards were updated to allow companies to report unrealized crypto gains in their quarterly earnings. That made crypto-Treasory company reporting much more clear, but its interaction with the corporate minimum tax introduced during the Biden administration was a cause for concern. potentially micro strategy would have needed to pay a multi-billion dollar tax bill on their 27 billion

of unrealized profit. That didn't seem like the intention of the law, but it so presented a huge overhang for micro strategy and others. With the issue now cleared up, micro strategy stock was up 5% on Wednesday, outpacing even Bitcoin's gain. Meanwhile, prior to the government shutdown, Bitcoin advocates and lawmakers had gathered for the Bitcoin and DC event. The event served as a check-in on the various Bitcoin initiatives going on in Congress. Alaska Senator Nick Begich announced that he was sponsoring the Bitcoin Reserve bill, saying, I'm a believer that we need to diversify our national balance sheet. We've got a heavy emphasis on gold. I think we should have an additional strong emphasis on Bitcoin. Senator Cynthia Lummis, meanwhile, reported in on crypto taxation reform.

She said the Senate Finance Committee is currently working on a bill that includes 10 things, our nine, and one other, so I think we're making progress on that. Her words. Among the nine is Lumas's proposal for a de minimis exemption for crypto transactions. Under the proposal, transactions for less than $300 would not be assessed for capital gains tax, making crypto spending significantly easier. The Senate Finance Committee managed to hold a hearing on the topic on Wednesday despite the shutdown. Lauren Slatkin, the VP of Tax at Coinbase, who appeared as a witness said, the guiding principle is simply parity with traditional finance. The same tax rule should apply to the same economic activity, whether it involves commodities, stocks, or tokens on a blockchain.

Right now, that parity does not exist, and the lack of tailored rules has real consequences. To close out a couple stories in the Stablecoin space, Stripe continues to execute on their strategy to modernize the payment rails with a new platform for stablecoin issuers, called open issuance, the platform, quote, enables any business to launch and manage their own stable coin with just a few lines of code. Now, Stripe, of course, famously made their mark on the world by allowing payment widgets to be added to any website with a few lines of code, and now they're making issuing a stable coin just as easy. Stripe said, businesses can mint and burn coins freely and customize their reserves to manage the ratio between cash and treasuries and choose

their preferred partners. Treasuries are managed by BlackRock Fidelity Investments in Superstate. Cash is held by lead bank to provide liquidity as necessary. In addition, the information reported that Stripe is planning to apply for a federal banking charter and a New York trust license in order to meet Staplecoin regulations. Now, the implications of every major company operating their own Staplecoin would take a lot of getting used to. Assuming that liquidity fragmentation can be solved, it doesn't look all that different to operating a gift card or loyalty points program. Yet, at the same time, it's a very different world with all sorts of businesses being able to issue their own digital money. Zach Abrams, the CEO of Stripe's Stablecoin

partner, said, if money movement is core to your business, you should build with stablecoins, but don't build on top of someone else's coin. With open issuance, businesses can build on top of stable coins that they customize and control so that the benefits of this important technology flow directly to the people and businesses using them. A.J. of Masari believes that this is a very big deal tweeting, big launch from Stripe. Stablecoins as a service with reserve yield passed on to creators minus a 0.5% platform fee. Creators have full control over mint and burn fees and reserve allocations. Phantom wallet has already created the first custom stablecoin using the platform, allowing them to offer a native stablecoin to users without needing to set up any infrastructure.

Cryptoanalyst Tom Howard wrote, This is one of the best post-Genius strategies in action by Stripe and Bridge. USDC currently has a liquidity and distribution moat. Genius means all U.S. stablecoins are basically fungible Fed dollars. Holding U.S.D.C. for many means funding your competition. Open issuance means control where your stable coin yield goes, stop funneling profits, to your competition. Interoperable means each stable coin inherits the liquidity of the others killing the USDC moat. this is going to produce thousands of very useful stablecoins that don't need to figure out the hard

parts of licensing and liquidity. It comes with the network. I expect that basically every other stablecoin issuer works with Stripe to join some sort of open standard for stablecoin interoperability, otherwise they will all get killed trying to orchestrate liquidity against this hydra. Lastly, Bitwise, CIO Matt Hogan believes that Tether could become the world's most profitable company. In his latest client memo, Hogan wrote, Tether is targeting a very large market. It has nearly 100% share of the stablecoin market in non-Western countries. There's a chance that many emerging market countries will convert from primarily using their own currencies to using USDT. If that happens, Tether could end up managing trillions of dollars in capturing all of the interest.

To give a sense of scope, he continued, in 24, Saudi Aramco turned in the most profitable year in corporate history, earning $120 billion. At current interest rates, if Tether got to $3 trillion in assets, about 3% of the global money supply, it would top that, becoming the most profitable company in history. Hogan told that story in the context of Bitcoin's growth and potential. He wrote that many Bitcoin skeptics failed to recognize the relative size of the market that Bitcoin is looking to disrupt, suggesting it could never reach the same market cap as Amazon at $2.3 trillion. Hogan posited, Imagine you had two startups, one trying to disrupt Amazon and the other trying to disrupt gold.

To be worth $2.3 trillion, the Amazon disruptor would need to take 100% of the market, forcing the Seattle-based giant into bankruptcy. Good luck with that. But if the startup were instead seeking to disrupt gold, it's a vastly different story. To hit $2.3 trillion, it would need to capture less than 10% of that market. He concluded, knowing that crypto is targeting very large markets opens investors' eyes to crypto's upside. There are some of the largest and most important markets in the world. There's a big difference between going after Amazon and going after the entire market for

global payments. So friends, that's the story heading into October. I appreciate you listening as always. And until next time, be safe and take care of each other. Peace.