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Morgan IF Weekly Market & Policy Brief — Oct 20–26, 2025

Morgan IF

Morgan IF 27/10/2025 News

Morgan IF Weekly Market & Policy Brief — Oct 20–26, 2025

1) Markets: risk stabilizes; BTC leads, ETH lags

  • BTC rebounded to ~$110–114K as ETFs turned net-positive on the week; US spot BTC ETFs saw ~$446–447M net inflows into Oct 24, while spot ETH ETFs posted net outflows—a rotation that kept ETH below prior highs.
  • Macro tailwind: the US 10-year Treasury yield dipped below 4% during the week (Oct 22), easing financial conditions and supporting risk assets.

2) Tokenization: institutional product momentum ticks up

  • Federated Hermes × Archax unveiled tokenized UCITS money-market funds (London, Oct 22) — a materially “TradFi-native” RWA use-case with FCA-regulated plumbing (exchange, broker, custodian).
  • Nomura’s Laser Digital launched a tokenized ‘Carry’ fund on Sei (Oct 22–24 window), underscoring tokenization moving from pilots to income-oriented strategies.

3) Europe: MiCA era shaping capital flows & supervision

  • EU supervisors underscored that MiCA implementation and supervisory convergence remain top priorities (ESMA Sept–Oct newsletter; published this week). Expect continued scrutiny of CASP authorizations and market integrity.
  • Policy backdrop: The European Commission (Oct 10) reiterated that existing MiCA rules adequately address stablecoin risks, even as the ECB continues to flag financial-stability concerns — a gap we expect to influence bank integrations and euro-stablecoin initiatives into Q4

Morgan House View — implications for institutional portfolios

Digital asset sleeve (near-term):

  • Overweight BTC vs. ETH tactically given flow leadership (BTC ETF inflows vs. ETH outflows). Maintain strict risk budgets after the early-October drawdown; use strength to rebalance rather than chase beta.
  • Stablecoins & payments rails (EU): prioritize MiCA-compliant issuers in eurozone payment and treasury workflows; expect bank partnerships to expand as supervisors push convergence.
  • RWA/tokenized cash management: the tokenized MMF path is becoming institutionally executable (KYC/CSD-adjacent control and FCA-regulated custody). We see scope to pilot tokenized liquidity buckets alongside T-bill strategies for operational efficiency and 24/7 settlement.

Macro overlay:

  • With the 10-year UST <4% during the week, digital-asset beta can remain sensitive to duration moves; hedge rate shocks around key data and the upcoming FOMC (Oct 29).

What we’re watching next

  • FOMC (Oct 29) and downstream ETF flow reaction — whether BTC’s weekly inflow trend persists and if ETH outflows stabilize.
  • Further TradFi tokenization prints (MMFs, credit, and alternatives) following this week’s launches.
  • EU supervisory communications on MiCA authorizations and stablecoin risk guards into November.

Notes: This briefing is informational and not investment advice. Figures reflect public sources during Oct 20–26, 2025 (local time UK).

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