Crypto Market Booms: Bitcoin Soars Past $118K, Ethereum Follows Strong Rally

Crypto Market Rally: Bitcoin and Ethereum Lead Gains as Sweden Considers Bitcoin Reserves

The global cryptocurrency market has entered October on a strong note, with major digital assets posting impressive gains despite lingering economic uncertainty across traditional financial markets. Bitcoin (BTC) and Ethereum (ETH) spearheaded the rally, fueled by institutional inflows, renewed investor optimism, and fresh political debate over the role of cryptocurrencies in national economies.

Bitcoin Breaks Above $118,000 Amid Market Momentum

Bitcoin surged past $118,000 in the last 24 hours, marking a 3 percent increase and contributing to a broader 4.3 percent weekly gain. Analysts note that this climb comes at a time when concerns over a potential U.S. government shutdown are unsettling equity markets, prompting investors to pivot toward digital assets as a hedge against political risk and inflation.

“The current rally reflects a shift in sentiment where cryptocurrencies are no longer viewed as highly correlated to equity markets,” said Jonathan White, a senior analyst at Digital Asset Research. “Investors are increasingly treating Bitcoin as a strategic store of value, particularly when uncertainty grips traditional markets.”

Ethereum followed suit, climbing above $4,300 before briefly spiking to $4,414, a 6.7 percent daily gain. The surge has been attributed to nearly $80 million in exchange-traded fund (ETF) inflows over just three days and heightened trading activity from large investors known as “whales.”

Ethereum Sees Breakout as Leverage Rises

Ethereum’s performance signals growing confidence in the asset’s utility beyond speculation. With the expansion of decentralized finance (DeFi) protocols and renewed interest in staking, ETH has experienced one of its strongest rallies of the year. Market leverage also appears to be building, as perpetual futures open interest jumped 17 percent to $1.27 trillion.

Funding rates in ETH perpetual contracts also turned positive at +0.0055 percent, suggesting that traders are positioning for further bullish momentum. “This kind of market structure creates a solid foundation for short-term gains,” explained White. “However, it also raises the risk of sharp corrections if leveraged positions unwind.”

Other major cryptocurrencies also benefited from the bullish trend. XRP, Solana (SOL), and Binance Coin (BNB) all posted double-digit weekly gains, reinforcing the idea that the rally is broad-based rather than limited to Bitcoin and Ethereum.

Sweden Considers Establishing a National Bitcoin Reserve

Adding to the momentum, political developments in Europe are also shaping the narrative around cryptocurrency adoption. In Sweden, members of parliament Dennis Dioukarev and David Perez from the Sweden Democrats have introduced a proposal to establish a national Bitcoin reserve.

The plan, which is still under review, suggests using Bitcoin seized by law enforcement as the foundation of the reserve. The goal would be to diversify Sweden’s national assets and provide a hedge against inflation, echoing recent debates in the United States and Latin America about whether Bitcoin could serve as a sovereign reserve currency.

“Countries like the United States are beginning to treat Bitcoin as a strategic resource,” Dioukarev said in a statement to Swedish media. “Sweden must not fall behind. Establishing a Bitcoin reserve could help strengthen our financial resilience in times of global uncertainty.”

While the proposal remains in its early stages, the discussion marks a significant step in legitimizing digital assets at the national policy level. Critics, however, warn that such a move could expose Sweden to Bitcoin’s well-documented volatility.

U.S. Lawmakers Debate Crypto Tax Rules Amid Shutdown Concerns

Meanwhile, across the Atlantic, the U.S. Senate Committee on Finance held a high-profile hearing this week to discuss the taxation of digital assets. Lawmakers debated the possibility of introducing a de minimis tax exemption for small crypto transactions under $300. Such a policy could encourage broader adoption of cryptocurrencies for everyday payments while reducing friction for users.

Lawrence Zlatkin, vice president of tax at Coinbase, testified before the committee, arguing that a de minimis exemption would be “a critical step to normalize crypto as a medium of exchange.” He added that such reforms would help foster innovation in the American digital asset sector while providing clarity for taxpayers.

At the same time, the committee examined stricter reporting rules as part of efforts to close an estimated $700 billion tax gap. Lawmakers face the difficult task of balancing innovation with compliance, especially as crypto adoption accelerates.

The timing of these discussions is notable, as they come amid mounting fears of a U.S. government shutdown. Analysts suggest that the political stalemate could further drive investors into decentralized assets, reinforcing the narrative of crypto as a safe haven during institutional gridlock.

Tornado Cash Co-Founder Challenges Legal Conviction

On the legal front, Roman Storm, co-founder of the decentralized privacy protocol Tornado Cash, has filed a motion to dismiss his criminal charges. U.S. prosecutors had accused Storm of operating an unlicensed money transmission business and facilitating money laundering.

Storm’s legal team, however, argues that the prosecution failed to prove intent to commit a crime, describing the case as negligence rather than criminal wrongdoing. “This case could set a precedent for how the law treats developers of open-source blockchain software,” said Jennifer Lawson, a professor of digital law at Columbia University.

The outcome of Storm’s case may have wide-reaching implications for the future of crypto privacy tools and the accountability of developers building decentralized technologies. A ruling in his favor could bolster innovation, while an adverse judgment could chill development in privacy-focused projects.

Market Outlook: Optimism With a Note of Caution

With Bitcoin trading above $118,000 and Ethereum maintaining momentum beyond $4,300, market sentiment is firmly bullish heading into the final quarter of 2025. Institutional inflows, political recognition, and macroeconomic uncertainty have all converged to drive demand for digital assets.

Yet analysts caution against complacency. The growing use of leverage, combined with regulatory uncertainty, leaves the market vulnerable to sudden corrections. Sweden’s exploration of a Bitcoin reserve highlights the growing geopolitical weight of cryptocurrencies, but it also underscores the risks nations face when integrating volatile assets into official financial systems.

For now, investors appear undeterred. As the world navigates inflationary pressures, political standoffs, and shifting economic paradigms, cryptocurrencies are increasingly being viewed not just as speculative assets but as integral components of the future financial landscape.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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