Crypto Market Weekly Update: Bitcoin Reserves, Stablecoins, and Market Reset Signals

Over the past week, discussions around the influence of stablecoins on financial sovereignty in emerging economies intensified, debates about a potential U.S. national Bitcoin reserve resurfaced, and analysts updated their views on Bitcoin’s current cycle and sentiment indicators. Regulators also emphasized clearer boundaries in digital asset oversight.

🌐 Stablecoin Growth and “Cryptovalization”

The stablecoin segment continued to expand, highlighting their growing role in cross-border payments and as liquidity parking tools. Moody’s analysts noted that the rapid adoption of digital currencies in emerging markets presents new risks to financial stability, potentially undermining central banks’ control over monetary policy.

This trend, referred to as “cryptovalization”, involves a shift of everyday payments and savings toward private digital currencies. Analysts warn that in such conditions, banks may face deposit outflows as households move funds to stablecoins or crypto wallets. Less than a third of jurisdictions currently have comprehensive digital asset regulations, though the U.S. (GENIUS Act) and EU (MiCA) provide examples of more holistic approaches.

Stablecoins are widely used in emerging markets to expand access to financial services, speed up remittances, facilitate mobile payments, and hedge against inflation. Moody’s highlights that insufficient oversight can trigger reserve outflows and require emergency government support if fiat-pegged stablecoins lose their value.

💰 National Bitcoin Reserve Debate

The idea of a U.S. national Bitcoin reserve has sparked controversy. OKX Global Managing Partner Haider Rafique noted that a government holding large BTC reserves could exert price pressure, undermining Bitcoin’s neutrality and potentially affecting the U.S. dollar. Historical examples, like Germany’s sale of 50,000 BTC in 2024, show how supply pressure can suppress BTC prices.

Rafique warned that a U.S. Bitcoin reserve could have macro-level consequences, including reduced confidence in the dollar, and might push investors toward safe-haven assets such as gold or the Swiss franc, potentially triggering a chain of liquidations.

🔄 Market Reset and Investor Sentiment

Bitcoin’s short-term holder metric, Glassnode NUPL, suggests a market “reset,” with unrealized losses for recent buyers historically signaling new accumulation waves. Meanwhile, stablecoin liquidity continues to grow:

• Total market cap: $300+ billion
• USDT: $174B, USDC: $73.5B, USDe: $9B, PYUSD: $1.4B, USDS: $1.3B
• Ethereum remains the leading network ($171B in stablecoins), followed by TRON ($76B) and others (~$29.7B)

Investor sentiment remained mixed. The Fear & Greed Index dropped to 28 points, the lowest since March 2025, coinciding with Bitcoin briefly falling below $110,000, before rebounding to $116,000. Ethereum hovered just under $4,300. Analysts from Bitwise consider this a market bottoming signal, noting exhausted selling pressure among short-term holders.

Regulatory Updates

U.S. regulators clarified oversight roles: SEC remains responsible for instruments resembling securities, while CFTC oversees commodity-like tokens. Both agencies emphasized the need for coordinated supervision, dismissing rumors of a potential merger. Tokenization was highlighted as a priority, with regulatory clarity expected within two years.

📊 Top 5 Cryptocurrencies (Oct ,2025)

The crypto market crossed $4 trillion in total capitalization, fueled by growing stablecoin adoption and resilient Bitcoin performance. Regulatory clarity, national reserve debates, and evolving market cycles continue to shape the landscape, offering both opportunities and caution for investors worldwide.