Q3 Memo: From Chop to Charge—A Bullish Summer Close

The summer period of 2025 ended up being rather bullish, contrary to market consensus and positioning. As we expected, we saw the first taste of an altszn: a reallocation from BTC to ETH, SOL, and select alternative assets.

While BTC mostly chopped, other majors—mainly ETH—finally went on a moon mission. Spot ETH ETFs put up monster prints, with a record $5.43B of net inflows in July and a $1B single-day intake on Aug 12—a key liquidity tailwind as digital asset treasury companies (DATs) and other participants chased prevailing narratives via ETF or spot buys. Strong demand continued into August.

Into late September, the macro and policy backdrop flipped supportive: on Sep 17, the Fed cut 25 bps, signaling an easing path that buoyed risk appetite. The very next day (Sep 18), the SEC approved generic listing standards for spot commodity/digital-asset ETPs, widening the pipeline beyond BTC/ETH and lowering listing friction.

Flows and prices responded—crypto market cap popped around the cut, reinforcing the bull tone into quarter-end—while U.S. government shutdown brinkmanship (Sep 30) added headline risk but ultimately didn’t derail the trend.

As ETH approached and then tagged the $5k area, attention rotated to SOL, where institutional access is expanding and major catalysts are brewing (listed derivatives, ETPs, and interest from DATs)—all supported by continued usage momentum.

Among the strongest narratives were Hyperliquid, Ethena, and Pump.fun, touted for “real cash flows“: profit-producing protocols with strong buyback-driven flywheels that captured trader imagination and incremental capital throughout the quarter.

Heading into Q4, we expect some chop before momentum rebuilds—seasonally Q4 skews bullish, and fundamentals (ETF flows, L2/infra upgrades, on-chain cashflows, ongoing accumulation) remain supportive.

We’re mindful of the other side: sellers distributing BTC profits into fiat and risk assets have shown they can dent rallies. Still, our base case is buyers dominate the tape, with strength likely extending into early 2026 (H1), barring an exogenous macro shock.

Rest up, recharge, and get ready to roll again. See you next quarter, anon.