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What we will cover this week:
Macroeconomic Outlook: U.S. Government Shutdown Deepens as Congress Stalemate Drags - Markets Brace for Data Blackout & Policy Uncertainty
The October 11 Crypto Crash: Causes, Impacts, and What Comes Next
Narratives to Watch after the Crash
Notable projects to watch
Weekly ecosystem updates
Macroeconomic Outlook: U.S. Government Shutdown Deepens as Congress Stalemate Drags - Markets Brace for Data Blackout & Policy Uncertainty
Government Shutdown Overview
Congress has failed to pass a government funding bill after seven failed Senate votes, leading to a prolonged shutdown that’s halting key economic data releases and freezing parts of the federal workforce.
Both chambers remain deadlocked - Republicans want a 7-week short-term funding extension with no policy changes, while Democrats demand permanent Obamacare subsidy extensions and a reversal of Medicaid cuts.
With neither side budging, the situation has turned into a political standoff.
Key Timeline & Impacted Data Releases
Jobs Report (Oct 3): Canceled due to shutdown - no official employment data.
CPI Inflation Report (Oct 15): Postponed, now set for Oct 24 under emergency release to calculate Social Security COLA.
Federal Reserve Meeting: Oct 29 - now operating with incomplete data.
The Bureau of Labor Statistics’ closure has forced investors and policymakers to rely on private data (ADP, Challenger, etc.), creating higher uncertainty in market pricing.
Labor Market Developments
Federal layoffs have begun under President Trump’s “reduction in force” (RIF) initiative, marking the first permanent federal job cuts during a government shutdown in decades.
Early estimates suggest a few thousand federal positions already eliminated, with more expected.
Unions have pledged to challenge the cuts legally, but short-term employment disruption is inevitable.
This adds additional downside pressure to labor markets already showing weakness - a delayed jobs report, coupled with rising layoffs, is likely to reinforce recession expectations heading into Q4.
What This Means for the Fed
With incomplete labor and inflation data, the Federal Reserve is effectively flying blind ahead of its Oct 29 meeting.
However, the expected 2.7% Social Security COLA adjustment signals inflation remains moderate - supportive of the Fed’s dovish turn.
Market consensus (CME FedWatch):
Oct 29: 96% odds of a 0.25% rate cut → New rate: 4.00%
Dec 10: 86% odds of another 0.25% cut → Rate: 3.75%
The continued rate-cut trajectory suggests the Fed is prioritizing growth and stability over inflation control - a classic easing pivot.
Market Implications
Equities: Lower rates are typically bullish for risk assets. Expect rotation into high-beta sectors and small caps once the shutdown resolves.
Commodities: Precious metals (gold, silver) likely strengthen as real yields fall.
Crypto: Historically, liquidity expansion and lower yields drive capital back into digital assets.
Bitcoin has shown strong correlation with Fed easing cycles, particularly during 2020–2021.
A rate move from 4.25% → 3.75% could mark the start of a new liquidity wave.
Expect renewed momentum in BTC, ETH, and DeFi tokens, particularly if CPI data shows disinflation on Oct 24.
Narrative Updates
I/ The October 11 Crypto Crash: Causes, Impacts, and What Comes Next
Takeaways:
U.S. & China tariff war triggered a massive market-wide crash
Over-leverage caused ~$20B in liquidations
USDe briefly depegged due to CEX lag and panic selling
ETF inflows and whale buys show confidence returning
Crash reset the market for the next recovery phase
II/ Narratives to Watch
Takeaways:
RWA
DeFi Transparency
Institutional DeFi
III/ Weekly ecosystem updates
Our radar expanding on these ecosystems:
Ethereum and notable L2s
BNB Chain
Solana
Bitcoin ecosystems
Base
HyperLiquid
Monad
Full news roundups for the week from October 5th - October 12th: HERE
IV/ Notable projects to watch
This week’s watchlist highlights notable projects we believe are worth monitoring, chosen for their strong fundamentals and key upcoming catalysts.
