Crypto–Macro Report: Week of September 29 - October 3, 2025

By David R. Fredericks, Quinnipiac University Global Economics Research Team

Digital Asset Performance (Monday = 100)

Cryptocurrencies started the week hesitantly but gained steady momentum from midweek onward. Bitcoin (BTC-USD) and Ethereum (ETH-USD) rose about 7%, while Solana (SOL-USD) advanced roughly 9.4%. After early softness, all three rallied from Wednesday through Friday.

This week’s crypto strength coincided with heightened U.S. political uncertainty. On October 1, the U.S. federal government entered a shutdown after Congress failed to pass a spending resolution. According to some like Convera (2025), the development temporarily pressured the U.S. dollar and triggered speculation of fiscal disarray—conditions that some argue historically favor decentralized, non-sovereign assets like Bitcoin.

Figure Notes: Data rebased to Monday = 100; values represent daily closes; X-axis covers Mon–Fri only. Source: Yahoo Finance; own calculations.

Weekly Returns (Mon → Fri)

Some interpreted the rally as reflecting both speculative repositioning and improving macro expectations as markets priced in the potential for easing liquidity conditions amid U.S. political gridlock. The federal shutdown effectively delayed major regulatory decisions and scaled back SEC and CFTC operations, which may have reduced short-term oversight concerns, according to observers like Gibson Dunn (2025).

Figure Notes: 5-day return (%) calculated from Monday’s open to Friday’s close. Source: Yahoo Finance; own calculations.

Macro Environment

Macro indicators were mixed but showed a mid-week shift in tone. The term spread (10y–2y) widened midweek; nominal yields eased modestly; and the U.S. Dollar Index (UUP) was broadly flat. iA Global Asset Management (2025) notes that some market participants considered the possibility that the Federal Reserve could adopt a more dovish posture if political uncertainty weighs on growth—an interpretation consistent with a temporarily steeper curve.

Figure 3A Notes: Percent change relative to Monday close; each series scaled to a common baseline. Source: Yahoo Finance; own calculations.

Figure 3B Notes: 60-day Z-scores normalized around 0; higher values indicate relative strength. Source: Yahoo Finance; own calculations.

Bitcoin vs Dollar Dynamics

The co-indexed comparison of BTC and the inverse Dollar (1/UUP) shows both series trending higher through the week. MUFG Research (2025) described the U.S. dollar as “mixed” amid political risk during this period, which some analysts use as context for concurrent BTC strength. From an economics perspective, softer dollar conditions and stable-to-lower yields imply lower alternative returns; such mechanics could be consistent with flows into crypto.

Figure Notes: BTC and 1/UUP co-indexed to 100 at Monday’s close; plotted on a shared normalized scale. Source: Yahoo Finance; own calculations.

Summary & Outlook

Crypto markets ended the week higher. According to Reuters (2025), the shutdown context framed the period for U.S. financial regulators. From an economics standpoint, (i) softer dollar conditions and (ii) stable-to-lower yields imply a decline in alternative returns; these could be reasons for increased interest in crypto, which many argue is relevant in episodes like this (see Reuters, 2025). Key near-term tests include the October CPI release and Treasury auctions.

References

Reuters. (2025, October 1). U.S. financial regulators start shutting down as federal funding runs out. https://www.r euters.com/sustainability/boards-policy-regulation/us-financial-regulators-start-shuttering-federal-funding-runs-out2025-10-01 Convera. (2025, October 2). Government shutdown drags on U.S. dollar. https://convera.com/blog/currency-news/government-shutdown-drags-on-us-dollar Gibson Dunn. (2025, October 3). Derivatives legislative and regulatory weekly update. https://www.gibsondunn.com/derivatives-legislative-and-regulatory-weekly-update-october-3-2025 iA Global Asset Management. (2025, October). Macro Strategy Outlook – October 2025. https://iagam.ca/insights/macro-strategy-october-2025 MUFG Research. (2025, October 2). FX Daily Snapshot – U.S. Dollar Mixed as Political Risk Mounts. https://www.mufgresearch.com/fx/fx-daily-snapshot-02-oct-2025 Data: Yahoo Finance and FRED (series include BTC-USD, ETH-USD, SOL-USD, UUP, DGS2, DGS10, T5YIE); own calculations (indexed Mon=100, Sep 29–Oct 3, 2025).