The chain reaction that turned markets red

Not long ago, investors were celebrating record prices. But that mood quickly vanished amid worrying signals coming from the White House. The resulting chain reaction sent markets deep into the red. Why? Find out in this Market News update. In the news section, we also look at Polymarket, which is being embraced by Wall Street with a multibillion dollar injection.

Market update

On Friday, October 10, US President Trump announced steep import tariffs, responding to earlier reports from China that the country planned to restrict the export of critical raw materials. Investors were unhappy about this new chapter in the trade war, and stocks, gold, and cryptocurrencies fell sharply.

At first, there was nothing unusual happening in the crypto market. By 11:00 p.m., futures on the Nasdaq technology index closed the trading day down 4.3%, while Bitcoin was down 7.0%.

Ten minutes later, the chain reaction began. Losses in the crypto market deepened, stop losses were triggered, collateral from leveraged positions was liquidated, and the downward movement was further fueled. The altcoin market was particularly hard hit, with some tokens losing tens of percent in just a few minutes.

Recovery followed over the weekend. The White House softened its comments on tariffs, and investors began buying back their positions. At the opening of the futures market on Sunday evening, Bitcoin's loss was only 5%, down from 14% at its lowest point. Altcoins still have more ground to make up, but they are also well above Friday evening's low.

Featured

Prediction markets are coming of age

In 2020, Shayne Coplan was working from his bathroom. He was out of money, his apartment was too small, but his idea held strong. "Little did I know Polymarket was going to change the world," wrote Coplan on social media.

Five years later, Polymarket is worth over $8 billion. And this week, investor Intercontinental Exchange (ICE) stepped in with up to $2 billion. ICE owns the New York Stock Exchange. The man who once worked from the bathroom is now sitting at the table with Wall Street.

Polymarket is a so-called prediction market, a place where people bet on the outcome of real-world events. Think questions like "Will the Republicans win the midterm elections?" or "Will there be a Solana ETF this year?" Participants stake their money, and each trade reflects a probability estimate. The result is a real-time indicator of the future — not based on opinions, but on money.

The idea has been around for a while. In 2003, the US Department of Defense attempted to predict global conflicts using this principle with FutureMAP. The initiative was almost immediately shut down after public outrage. Coplan continued the idea twenty years later, but this time, powered by blockchain technology.

In 2022, Polymarket was fined by the US regulator. Nevertheless, the platform experienced explosive growth, particularly during the 2024 US elections. Since 2025, it has been operating legally in the US thanks to a new license. With ICE on board, a new chapter is dawning.

Why would the owner of the world's largest stock exchange invest in a platform known for betting on political outcomes? It's all about the data. Polymarket offers something unique: a real-time view of investor expectations. ICE plans to sell that market information to institutional clients. "There are opportunities in markets that ICE and Polymarket can uniquely serve together", said CEO Jeffrey Sprecher.

In addition, ICE is acquiring innovative technology and the people with the skills to develop it. The icing on the cake is that Polymarket can rely on ICE's reputation; no longer a crypto project in a gray area, but a full-fledged player in the financial system.

As investor Michael Arrington summarized: "It's not just a fantastic product, it's a public good." Prediction markets don't create the news, they measure it. And sometimes, they predict exactly what the future will hold.

Other news

• US government shutdown halts approval of crypto ETFs. Due to the government shutdown, work at the SEC has largely ground to a halt, delaying the launch of new spot ETFs for currencies including litecoin, solana, and XRP. Only essential work and fraud cases are continuing. According to Bloomberg analyst Eric Balchunas, it’s best seen “like a rain delay”: As soon as the government is up and running again, the predicted wave of ETF launches will follow.

• Grayscale introduces staking to Wall Street. For the first time, a spot ETF in the US has added staking. Grayscale's ether and solana funds (ETHE, ETH, and GSOL) are now using their holdings to earn network rewards. The proceeds flow back to the fund holders. This brings staking, once a purely on-chain phenomenon, to the traditional trading floor.

• Deutsche Bank expects Bitcoin in central bank reserves. According to a new report, Bitcoin could join gold on central bank balance sheets by 2030. The bank points to declining volatility, clearer regulation, and growing institutional adoption. Bitcoin won't replace the dollar, but it could become a modern hedge: digital gold with an increasingly clear, official stamp.

• Ethereum puts privacy high on the agenda. The Ethereum Foundation launched Kohaku, a toolkit that allows developers to build privacy features and better data protection into their apps. Privacy and security according to Ethereum CEO Vitalik Buterin are "first-class priorities." Privacy coins, which were already performing well before the announcement, received an extra boost. The market appears to be rediscovering the importance of privacy. 

Satoshi Radio: The latest episode of Satoshi Radio naturally focuses on Bitcoin's new record price. Was it a telling breakout? You'll also get a tour of the most important news, including impressive flows into ETFs, the US government shutdown, comments from ECB President Lagarde on bitcoin, and new recommendations from investment bank Morgan Stanley.

This article is for informational purposes only and does not constitute a marketing communication or recommendation. None of the content herein should be considered as investment advice or a substitute for it. Bitvavo makes no guarantees regarding the accuracy or completeness of the provided information. Investments involve risks. There is a possibility of losing your entire invested capital.