Welcome to The Market Runup! Every week, we’re diving into what happened in the crypto market onchain and off-chain, as well macro developments — so you can get smarter on your Mondays and prepare for the week ahead.

We’re later than usual this week as I had a pet emergency to wrangle. Still scrambling, but here’s a quick look at what went down last week. 

Last week was a balancing act: Bitcoin ended the week above $86K and tech stocks held their ground as softer hiring data eased expectations for another Fed hike. But Treasury yields remained above 5%, oil continued to trade up from $100, and Bitcoin ETF inflows slowed down, leaving investors weighing the market’s resilience.

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Brian Esposito of DiamondLake: The Real Problem With Tokenization

Last week, I sat down with Brian Esposito of DiamondLake to talk about the state of the market, the rising cost of capital, and where traditional finance meets digital assets.

The market backdrop today is a complicated one. September’s jobs report showed just 29,000 new jobs, while unemployment ticked higher from 4.1% to 4.2%. Meanwhile, August’s core PCE inflation came in at 3% annually. Those numbers gave investors reason to expect patience from the Fed when it comes to interest rate hikes, but businesses and households are still under pressure from the months of rising inflation.

Esposito shared his thoughts on the current market, what Treasury yields above 5% mean for companies’ valuations and financing plans, and how geopolitical uncertainty may influence their decisions. We also explored whether AI investment can continue supporting growth even as other parts of the economy slow.

Our conversation also touched on the energy crisis due to the Iran War, as well as DiamondLake’s focus on real assets and tokenization. Esposito explained how digital ownership can improve access to investment products; what makes a commercial property attractive today;, and why putting an asset on a blockchain isn’t enough to attract buyers.

The percentages and metrics are based on a 7-day timeframe, unless noted otherwise.

Perpetual Motion covers the latest in the booming perpetual futures market. This section is brought to you by Synthetix, the leading decentralized perpetual futures protocol of Ethereum Mainnet.

Bitcoin derivatives activity picked up before Friday’s jobs report landed, with open interest increasing 4.3% to 653,000 BTC as of October 2 from  about 626,000 BTC on September 30. Outstanding positions were worth approximately $56.2 billion as of Friday, October 2nd.

Funding rates also moved higher as bitcoin’s price increased to $86,500, following a relatively low level of open interest at the end of September. 

Derivatives exposure rose even as weekly ETF inflows slowed, a combination that leaves the market more dependent on fresh buying keeping pace with traders’ expectations.

Spot vs Derivatives Flows (what to watch):

Positive ETF flows remain encouraging, but last week’s inflows of $241 million is a stark contrast  from the $2.39 billion we saw coming in just a week earlier. I’m watching whether those inflows strengthen again as Bitcoin continues to trade above $85,000.

Cross-asset correlations (what it tells you):

Stocks rallied after Friday’s weaker jobs report, but the market showed mixed performance throughout the full week. The Nasdaq gained 0.45%, the S&P 500 fell 0.27%, and the Dow declined 1.26%. Bitcoin’s positive momentum alongside technology stocks suggests selective appetite for risk.

The bond market looked less reassured. Treasury yields initially fell after the payrolls data came im only to rebound, with the 10-year bills back around 5.25% on Friday. Lowering expectations for an immediate interest rate hike haven’t yet translated into a sustained decline in long-term borrowing costs.

Bitcoin’s gains, continued ETF inflows, and the resilience of technology stocks indicate that investors remain willing to take risk. But the backdrop isn’t as comfortable as a strong Friday session might imply.

With that in mind, our assessment for this week is:

Crypto: Constructive, though slower ETF inflows and rising leverage warrant attention.

Global macro: Selectively constructive, but still sensitive to interest rates, energy costs and weakening hiring.

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This information is for entertainment purposes only. It should not be considered financial advice, nor should it be used to make investment decisions. Cryptocurrencies are high risk and you should consult a financial professional before making any financial decisions. Make sure you do your own research.