Market Update (September 2025)

September ended with broadly positive momentum across asset classes, which coincided with the Fed rate cut during the month. Equity markets remained near record highs, but concerns over persistent inflation, geopolitical tensions, and trade conflicts influenced investor sentiment. Both traditional and digital asset markets continue to watch for potential Fed policy changes in October.

Executive Summary

• Overall Market Performance: September concluded with broadly positive momentum across asset classes. US equities extended their multi-month rally, while gold surged nearly 10% in September. BTC gained 5.1%, recovering from August’s volatility. ETH, by contrast, fell 3.6% during the month, but still delivered a substantial 66% growth  in Q3.
• G20 Macro Environment: September 2025 presented a mixed but broadly resilient landscape across G20 economies. Divergent central bank policies underscored varying inflation and growth dynamics, while persistent trade frictions and geopolitical tensions remained key external pressures.
• Crypto Market Dynamics: DeFi sectors varied, with Liquid Staking and Meme categories leading the growth. BTC ETFs drew US$3.5 billion in net inflows, while ETH ETFs drew $283 million, marking six consecutive months of net inflows.
• Crypto Regulatory Developments: US greenlit tokenised collateral in derivatives and generic ETF listings, and aims to roll out an ‘innovation exemption’ for digital assets. China opened a digital yuan operations centre and proposed easing capital rules for banks holding crypto. The EU is targeting a 2029 digital euro launch. Australia drafted tougher licensing for digital asset platforms. South Korea capped crypto lending rates.
• Equity Market Trends: US indices rose (S&P 500 +4.25%, Dow +2.43%), driven by tech giants, Federal Reserve cuts, and economic resilience. Europe delivered strong growth, despite the European Central Bank maintaining a cautious policy stance. Asia showed gains except Australia. South Korea, Japan, and Hong Kong led regional gains driven by AI and semiconductor tailwinds.
• New Developments in Crypto and TradFi: Trump Media Group and Crypto.com closed a purchase agreement for 584 million Cronos (CRO). Crypto.com revamped its Level Up rewards programme. Crypto.com received approval  of a full stack of US Commodity Futures Trading Commission derivatives licenses. Citi projects the stablecoin market cap will reach $4 trillion by 2030. Nine major European banks are developing a euro-pegged stablecoin.
• Outlook on Key Projects and Tokens: Cronos partnered with Amazon Web Services (AWS) to accelerate institutional tokenisation adoption and real-world assets (RWA). BTC faces potential strength from the ‘Uptober Effect’ and from potential Fed rate cuts. Ethereum announced its Fusaka upgrade, scheduled on 3 December. Tether is reportedly raising up to $20 billion at a valuation of up to $500 billion. Hyperliquid launched its USDH stablecoin.

1.  Overview

September concluded with broadly positive momentum across asset classes, as investors digested the Federal Reserve’s 0.25% rate cut while weighing ongoing growth and inflation uncertainties. US equities extended their multi-month rally, with the S&P 500, Dow Jones, and NASDAQ all posting solid gains. Gold surged nearly 10% in September, reinforcing its outperformance in 2025 YTD. 

Crypto markets saw a mixed month: BTC gained 5.1%, recovering from August’s volatility. ETH, by contrast, pulled back 3.6% in the month, though still delivered an outsized growth of 66% in Q3. Equities and crypto alike closed September well-positioned heading into Q4, with monetary policy expectations, inflation data, corporate earnings and institutional adoption continuing to shape the outlook for these assets.

1.1 Macro of the G20 Economies

September 2025 presented a mixed but broadly resilient landscape across G20 economies. Divergent central bank policies underscored varying inflation and growth dynamics, while persistent trade frictions and geopolitical tensions remained key external pressures. Although growth is projected to moderate, potential further monetary policy easing, business investment and fiscal support are expected to offset some of the headwinds.

Inflation and Monetary Policy

Central banks remained on divergent paths in September. The US Federal Reserve delivered a 0.25% rate cut, with its updated dot plot suggesting the possibility of two more cuts in 2025, though policymakers remain divided. The European Central Bank held policy steady, maintaining its focus on inflation stability near its 2% medium-term target. The Bank of Canada lowered its benchmark rate to 2.5%, while the Bank of Japan and Bank of England kept rates unchanged. In emerging markets, policy was mixed: India and Brazil held steady, while Turkey continued with aggressive easing to support domestic growth.

Trade and External Pressures

Trade tensions remained elevated following the US’ implementation of “reciprocal” tariffs, though the White House issued an executive order modifying their scope and introduced exemptions for certain goods where trade agreements were in place. Despite this, steep duties on economies including India and Brazil persisted. The UNCTAD global trade update emphasised that trade policy uncertainty continues to loom over global markets, and is often “more disruptive than tariffs”.

Outlook

The OECD revised its 2025 global growth upwards by 0.3% to 3.2%, mentioning that it was more resilient than anticipated in H1 2025, with industrial production being supported by front-loading ahead of higher tariffs. However, downside risks remain heading into Q4, including full tariff effects that are yet to be felt, sticky inflation and ongoing geopolitical tensions.  

1.2 Crypto Market 

DeFi categories had mixed performances in September, with Liquid Staking and Meme categories leading the market capitalisation (MC) growth. 

Liquid staking increase was led by Etherfi (+54%) and Eigenlayer (+41%). This coincided with news that Google Cloud partnered with Eigenlayer to bring verifiability to support payment settlement with AI agents. Meme category increase was led by Pump.fun (+68%), which introduced Project Ascend to revamp its creator fee structure with dynamic fees. Most tokens in the DEX category saw a drop in September, except Pancake Swap (+4%).

In September, US spot Bitcoin ETFs reversed August’s outflows and recorded strong net inflows, signaling renewed institutional demand. The US spot BTC ETFs saw net inflow of $3.5 billion in September, reversing the monthly net outflow of $749 million in August. Additionally, the assets under management (AUM) of the BTC ETFs surged by 10.4% in September, while the AUM of ETH ETFs dropped by 4.4%.

In September, spot ETH ETFs’ performance weakened but still maintained a net inflow of $283 million, marking six consecutive months of net inflows. 

1.3 Crypto Regulation Updates

1.4 Equity Market

The US stock market continued to see robust gains in September 2025, defying the month’s historical reputation for weakness. Major indices—especially the S&P 500 and Nasdaq—reached new highs. Market momentum was driven by strength in megacap technology stocks, macroeconomic resilience and central bank policies.

Key Drivers of US Stock Market include:

• Mega-Cap Technology Leadership: Index gains were once again led by tech and AI giants (Nvidia, Amazon, Alphabet), which delivered standout results in cloud and artificial intelligence, fueling optimism and index outperformance.
• Fed Rate Cut and Future Expectations: The US Federal Reserve cut rates by 25 basis points in September, citing slowing labor market momentum and inflation remaining elevated. The committee signalled two more rate cuts are on the way in 2025.  
• Resilient US Economy: US consumer spending and retail sales were slightly higher than expectations in August, showing signs of economic resilience. The US consumer price index also showed yearly increases in-line with expectations.
• Sector Rotation: Technology remained the dominant driver of index returns, leading the monthly gains (+7.2%) alongside the Communications sector (+5.5%). Materials (-2.3%) and Consumer Staples (-1.8%) underperformed. Eight out of the eleven S&P 500 sectors displayed gains in September. 

Europe

European equity markets delivered strong growth in September 2025, with the STOXX Europe 600 gaining 4.52% and outperforming other major indices in the region. Other major countries’ equity indices also delivered positive month-on-month gains, with the French CAC index recovering from August’s political uncertainty. 

Primary Market Drivers:

On the monetary front, the European Central Bank maintained a cautious stance and maintained its interest rates in September. Inflation in the eurozone edged up slightly to 2.2% in September, above ECB’s 2% target, while manufacturing PMI dropped to 49.8 in September, slipping into contraction territory. However, US Fed rate cuts and expectations for looser monetary policy supported investor appetite in the region.  

Sector Rotation: Euro STOXX 50 added Deutsche Bank, Siemens Energy and Argenx in the month, which suggests institutional flows favoured financials, energy and healthcare. Technology and materials also outperformed.

Asia

Asian equity markets in September 2025 showed gains with the exception of Australia. South Korea, Japan and Hong Kong led regional gains while India and Singapore’s indices were largely stable. 

Sector Rotation: Rotation continued to shift towards AI-linked and semiconductor stocks in China. South Korea saw leadership from semiconductors and export-driven industries. Indian equities were dragged down by IT companies as the market absorbed the impact of US visa curbs. 

China

Chinese markets continued to rise with the CSI 300 climbing 3%, and the tech-heavy ChiNext soaring 12%. Technology and AI momentum remained strong. On the policy front, China’s central bank said it will step up monetary policy to support economic growth. 

Japan: Record Highs in September

The Nikkei 225 rose 6.2% in September and reached record highs in the month, supported by cyclical and value plays as well as an AI tailwind. The rally was supported by optimism around US monetary easing and weakened yen currency. BOJ’s Governor Ueda mentioned inflation is on track but global uncertainties remain, with no clear hint for immediate rate hike.

South Korea: Strong Export Momentum 

South Korea stood out as a regional outperformer, powered largely by semiconductors and export momentum. The country’s exports marked their fastest growth in 14 months in September as AI drives demand for chips. On the policy front, the government’s decision to abandon the planned capital gain tax hikes boosted investor sentiment.

1.5 Performance Correlation

BTC’s rolling 30-day return correlation kept negative with REIT, but positive with the S&P 500 and Gold.

2. New Developments

2.1 Crypto.com News

• Trump Media has closed a purchase agreement with Crypto.com to acquire 684.4 million CRO at 15.3 cents per token in a 50% stock and 50% cash exchange. The agreement is a part of a partnership that enables CRO to be integrated into the Truth Social and Truth+ platforms.
• Truth Social updated its rewards system, enabling Truth Social users subscribed to its Patriots Package to convert ‘gems’ earned through platform activities into CRO and other benefits, utilising Crypto.com’s digital wallet infrastructure.
• Crypto.com revamped its Level Up rewards programme to feature zero trading fees and enhanced CRO token benefits, accessible via subscription or CRO Lockup/Staking.
• Crypto.com has approval of a full stack of US Commodity Futures Trading Commission (CFTC) derivatives licenses – becoming the first major cryptocurrency platform globally to hold Futures Commission Merchant (FCM), designated contract market (DCM), and derivatives clearinghouse organization (DCO) licenses in the US for derivatives.
• Crypto.com Custody Trust Company achieved SOC1 Type II and SOC2 Type II compliance. These certifications validate Crypto.com Custody’s commitment to transparency, governance, and robust security for institutional clients.
• Underdog and Crypto.com | Derivatives North America (CDNA) announced the first sports prediction market exchange through the Underdog app. This provides American sports fans a federally compliant way to access CDNA sports event contracts and make predictions on the outcomes of their favorite sports events.
• Crypto.com integrated Crypto.com Custody with the Sei Network to provide custody for SEI tokens. The SEI tokens will be stored in a cold storage solution to protect assets used by institutional investors for treasury management, validator rewards, and ecosystem growth.
• Exodus Movement selected Crypto.com Custody Trust Company as its digital asset custodian. This partnership enhances security and regulatory safeguards for Exodus.
• ZOOZ Power has chosen Crypto.com to support its digital asset treasury strategy, leveraging Crypto.com’s OTC trading desk to buy bitcoin for its strategy.
• Plasma selected Crypto.com Custody to provide secure custody and liquidity for XPL, its native blockchain token. This partnership delivers institutional-grade security, compliance, and asset management across Plasma’s global network.
• Axelar Foundation has partnered with Crypto.com to provide secure institutional custody services and treasury management for AXL tokens.
• Frax has selected Crypto.com to provide secure institutional custody and liquidity solutions for Frax’s stablecoins and staking assets. This enables institutions to securely participate in Frax’s ecosystem.
• Crypto.com and Sharps Technology (STSS) announced that STSS has expanded its Solana-focused digital asset treasury strategy with Crypto.com’s services including its custody infrastructure and OTC desk. 
• Crypto.com partners with SOL Strategies (CSE: HODL) to support its treasury strategy and power validator integration. SOL Strategies will diversify its custody operations by utilizing Crypto.com Custody for a portion of its treasury operations. In addition, SOL Strategies’ validator services will be made available to Crypto.com’s institutional custody clients.

2.2 TradFi

Assets Allocation

We used the following assets to construct the portfolio, and compared the returns with adding BTC and ETH:

JP Morgan analysts wrote in a recent stock coverage report that institutional adoption of crypto still looks early but momentum is building. Recent crypto IPOs and regulatory clarity from the GENIUS Act boosted expectations for crypto adoption. The firm’s analysts also believe bitcoin is undervalued relative to gold on a volatility-adjusted basis. 

Citi projects the stablecoin market cap will grow to $4 trillion by 2030, up from previous projections of $3.7 trillion. The bank does not expect stablecoins to disrupt the banking sector, but would help to “reimagine” the existing financial system. 

Nine major European banks, including UniCredit and ING, are developing a euro-pegged stablecoin compliant with Markets in Crypto-Assets (MiCA) regulation. It is expected to be issued in the second half of 2026 as a digitised European payment standard.

3. Outlook

3.1 Projects and Tokens

Cronos (CRO)

Cronos partnered with Amazon Web Services (AWS) to accelerate institutional adoption of tokenisation and RWA by making Cronos data, infrastructure, and AI tools more accessible to developers. AWS will provide selected Cronos builders with up to $100,000 in credits to support the development of tokenisation pilots, DeFi protocols, and AI-powered applications. Additionally, Crypto.com, Cronos and Morpho announce collaboration to expand DeFi lending and tokenization opportunities.

Bitcoin (BTC)

“Uptober Effect” could bring strength, with October historically being the best month for the token and returning +20% in the past 10 years. Potential Fed rate cuts may also provide a buying case.

Ethereum (ETH)

Ethereum announced that its Fusaka upgrade is scheduled for 3 December while the increase in blob capacity will be around 17 December, followed by another blob capacity hard fork on 7 January 2026. Additionally, Ethereum Foundation launched a new unit, the ‘dAI team’, that will focus on building tools to let AI agents and bots transact. The Foundation also released a roadmap to bring privacy features under ‘Privacy Stewards of Ethereum (PSE)’ to Ethereum L1. 

Tether (USDT)

Tether is reportedly raising up to $20 billion in a fundraising round that could value the company at up to $500 billion. SoftBank and ARK are among potential investors considering the investment. It also announced a new USD-backed stablecoin, USAT, and named former White House crypto advisor Bo Hines as the project’s CEO. 

Hyperliquid (HYPE)

Hyperliquid is reportedly preparing to launch its proprietary stablecoin, USDH, through an on-chain governance process. Additionally, its founder announced the HIP-3 infrastructure for mainnet, which will enable builder-deployed perpetuals. Circle launched native USDC on Hyperliquid’s HyperEVM blockchain and plans to integrate HyperCore DEX with HyperEVM for seamless asset bridging. 

Avalanche (AVAX)

Avalanche Foundation is reportedly raising $1 billion to launch digital asset treasury projects. The proceeds will be used to purchase AVAX at a discounted price from the foundation. 

Ethena (ENA)

Ethena Labs launched its synthetic stablecoins, USDe and staked USDe (sUSDe), on the Avalanche blockchain, marking a major cross-chain expansion. MegaETH introduced its stablecoin, MegaUSD (USDm), which was built with Ethena Labs using Ethena’s stablecoin-as-a-service stack. 

3.2 Token Unlock Calendar

Read the full report: Market Update (September 2025)

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Authors

Crypto.com Research and Insights team

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