Firi Weekly: An Exciting Week Ahead

U.S.-China Trade Deal Progress Before November 1 Deadline:
- Trump's 100% tariff threat was reportedly removed as the nations reached a preliminary consensus, with Trump and Xi Jinping meeting Thursday in South Korea to finalize the agreement.
Fed Expected to Cut Interest Rates 0.25%
- Markets show 97.8% certainty of Fed rate cut Wednesday after September inflation hit 3.0%, below the 3.1% forecast.
JPMorgan Accepts Bitcoin and Ether as Loan Collateral:
- America's largest bank will allow institutional clients to use Bitcoin and Ether as collateral by year-end, marking major crypto adoption shift.
Japan Launches First Yen-Backed Stablecoin:
- The JPYC startup launched Japan's first yen-backed stablecoin after receiving its license in August; the company targets $66 billion in issuance over three years.

Last Week’s Big Three

A Positive Weekend for U.S.-China Relations: President Trump had drawn a hard line in the sand with China—reach a trade deal by November 1st or face an additional 100% tariff on Chinese goods. As a result, the past few weeks have been marked by volatility, with both nations alternating between increasing and easing pressure, as we previously noted in Firi Weekly.

However, Sunday brought meaningful de-escalation. Chinese officials announced that the two countries had achieved preliminary consensus on several contentious issues. U.S. Treasury Secretary Scott Bessent later confirmed that the 100% tariff threat was effectively off the table and expressed confidence that China would delay implementing rare-earth export restrictions for another year. Trump himself told reporters he is optimistic about reaching a deal.

The scheduled meeting between Trump and Chinese President Xi Jinping in South Korea on Thursday should provide clarity on what they have agreed to so far. That said, significant issues remain unresolved—particularly the persistent U.S. trade deficit with China—so volatility could return quickly as details possibly emerge throughout the week.

JPMorgan to Accept Crypto as Collateral: According to Bloomberg, JPMorgan Chase will begin accepting Bitcoin and Ether as collateral for institutional loans by the end of this year, with digital assets held by third-party custodians. This follows the bank's earlier decision to accept U.S. crypto exchange-traded funds (ETFs) as loan collateral.

The move underscores how even former crypto skeptics are expanding their digital asset services. JPMorgan's hostility toward the sector is well-documented, making this pivot all the more significant. We have seen this trend accelerate over the past year, and it is reasonable to expect other major institutions will follow suit as the regulatory environment clarifies and client demand grows.

Japan's First Yen-Backed Stablecoin Goes Live: Today marked the official launch of Japan's inaugural regulated yen stablecoin, following Friday's announcement. The timing is notable—just weeks after reports surfaced that Japan's three largest banks are collaborating on their own stablecoin project. The newly launched token comes from JPYC, which received regulatory approval in August to issue a yen-backed stablecoin. The firm has set a three-year goal of reaching $66 billion in circulation.

It is abundantly clear that dollar-denominated stablecoins dominate the market, yet the emergence of alternatives pegged to other major currencies marks an important development. The potential entry of Japan's banking giants is particularly interesting—their existing distribution networks could drive meaningful adoption at scale, something standalone stablecoin projects typically struggle to achieve.

Behind the Charts

Chart 1: U.S. Consumer (CPI) Inflation Rate Year-over-Year

Friday's U.S. consumer price index (CPI) data showed inflation rising 3.0% year-over-year in September, up from 2.9% in August. This marked the first time inflation has reached the 3% threshold since January. Despite the uptick, markets responded positively because economists had forecast 3.1%, meaning the actual figure came in better than expected. Digital assets and equities both rallied on the news.

Chart 2: The Markets’ Expectations of a Cut This Week

The U.S. Federal Reserve (Fed) announces its rate decision on Wednesday, and market pricing suggests overwhelming confidence in a cut. Markets are pricing in a 97.8% chance of a 25 basis point (0.25%) rate cut after softer-than-expected inflation reinforced the case for easing.

Rate cuts generally benefit digital assets by reducing the appeal of safer investments and increasing liquidity in the financial system. However, it is worth remembering that when the Fed last cut rates in late September, crypto markets actually dipped in the immediate aftermath—likely because traders had already priced in the move. Assuming the Fed does not signal unexpected concern about economic conditions in its accompanying statement, this cut should be constructive for risk assets over the medium term.

A Number to Remember

390 bitcoins

Strategy—the company formerly known as MicroStrategy and the largest corporate holder of Bitcoin—added another 390 bitcoins to its treasury last week for $43.4 million. The relatively modest purchase, compared with some of the company's previous acquisitions, brings Strategy's total holdings up to 640,808 bitcoins.

On Our Radar

On our radar for the week ahead:

Will the Fed Cut Rates Wednesday? The consensus expects a quarter-point reduction, but surprises happen. If the Fed holds rates steady or delivers unexpectedly hawkish commentary about economic weakness, digital assets could face immediate selling pressure.
U.S.-China Summit: Thursday's meeting between Presidents Trump and Xi will dominate market attention. In light of the weekend’s statements, any deviation from the preliminary framework or signs that key issues remain unresolved could create volatility across global markets. Even rumors and unofficial comments leading up to the meeting can move the markets.
U.S. Tech Earnings Week: This is a critical week for equity markets, with major technology companies reporting third-quarter results. Alphabet (Google's parent company), Meta (Facebook), Apple, Amazon, and Microsoft all report earnings. Because crypto markets track closely with U.S. tech stocks—particularly high-growth, risk-oriented names—strong or weak results from these firms could significantly influence digital asset prices.

Mads Eberhardt27/10/2025

Should not be considered financial advice. Crypto may involve high risk.