ALTERNATIVE MARKETS UPDATE – END OCTOBER 2025

​Over the past month, monetary policy across major developed economies has entered a more nuanced phase, with rate-cut cycles largely paused as central banks assess the balance between easing inflation and maintaining credibility. In the US, the Federal Reserve recently lowered its policy rate to 3.75-4%, delivering a long-anticipated cut aimed at supporting growth amid moderating inflation. However, Chair Jerome Powell struck a notably cautious tone, emphasising that additional cuts in 2025 are unlikely unless economic conditions deteriorate meaningfully, as core inflation and wage pressures remain elevated. Across the Atlantic, the European Central Bank has kept its deposit facility rate steady at 2%, marking a pause in its earlier easing cycle as policymakers monitor the resilience of the Eurozone economy and the transmission of previous cuts through credit markets. In Switzerland, the Swiss National Bank continues to maintain its policy rate at 0 %, reflecting a benign inflation environment and a strong franc that has helped contain import prices. Meanwhile, the Bank of England has taken a more conservative stance, holding its base rate at 4% amid budgetary constraints and lingering concerns over fiscal credibility, signalling that further reductions are unlikely in the near term. Collectively, these developments suggest that while the global tightening phase has clearly ended, central banks are now entering a period of cautious calibration, prioritising stability and inflation control over aggressive monetary accommodation. Figure 1 summarizes the development of interest rates and inflation rates of the aforementioned economies.

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RESEARCH PERSPECTIVE VOL. 262 October 2025 Alternative Markets Update Over the past month, monetary policy across major developed economies has entered a more nuanced phase, with rate-cut cycles largely paused as central banks assess the balance between easing inflation and maintaining credibility. In the US, the Federal Reserve recently lowered its policy rate to 3.75-4%, delivering a long-anticipated cut aimed at supporting growth amid moderating inflation. However, Chair Jerome Powell struck a notably cautious tone, emphasising that additional cuts in 2025 are unlikely unless economic conditions deteriorate meaningfully, as core inflation and wage pressures remain elevated. Across the Atlantic, the European Central Bank has kept its deposit facility rate steady at 2%, marking a pause in its earlier easing cycle as policymakers monitor the resilience of the Eurozone economy and the transmission of previous cuts through credit markets. In Switzerland, the Swiss National Bank continues to maintain its policy rate at 0 %, reflecting a benign inflation environment and a strong franc that has helped contain import prices. Meanwhile, the Bank of England has taken a more conservative stance, holding its base rate at 4% amid budgetary constraints and lingering concerns over fiscal credibility, signalling that further reductions are unlikely in the near term. Collectively, these developments suggest that while the global tightening phase has clearly ended, central banks are now entering a period of cautious calibration, prioritising stability and inflation control over aggressive monetary accommodation. Figure 1 summarizes the development of interest rates and inflation rates of the aforementioned economies. Figure 1: Interest Rate & Inflation Rate in the US, UK, European Union and Switzerland, Source: Trading Economics, November 2025 Over the past two to three weeks, the cryptocurrency market has entered a correction phase following months of strong performance, as macro headwinds and profit-taking weighed on risk sentiment. Bitcoin (BTC) has retreated from its recent high of around $123,000 to $106,000, while Ethereum (ETH) has eased from $4,200 to $3,600, with both assets now consolidating after breaking below key technical levels. Figure 2 shows the development of BTC and ETH during 2025. Despite this pullback, BTC remains up roughly 14 % YTD and ETH 8 %, underscoring the broader resilience of the digital-asset market amid rising volatility. The sell-off was triggered by a combination of factors, which include renewed US–China trade tensions, a cautious tone from Federal Reserve Chair Jerome Powell suggesting limited scope for additional rate cuts, and a surge in liquidations across leveraged positions. Meanwhile, large-wallet activity pointed to profit-taking among early-cycle investors, adding supply pressure on exchanges. Altcoins underperformed sharply as liquidity and retail participation thinned, reinforcing the market’s shift toward a “risk-off” posture. Nevertheless, the medium-term outlook remains constructive: institutional inflows into crypto ETFs and increasing integration of digital-asset strategies in portfolio allocations continue to provide a structural demand base, suggesting that if macro conditions stabilise, this correction could set the stage for renewed accumulation into year-end. Figure 2: Bitcoin Price and YTD of Bitcoin and Ethereum, Source: Investing, November 2025 STONE MOUNTAIN CAPITAL Stone Mountain Capital is an advisory boutique established in 2012 and headquartered in London with offices Pfaeffikon in Switzerland, Tallinn in Estonia and Dubai and Umm Al Quwain in United Arab Emirates. We are advising 30+ best in class single hedge fund and multi-strategy managers across equity, credit, and tactical trading (global macro, CTAs and volatility). In private assets, we advise 10+ sponsors and general partners across private equity, venture capital, private credit, real estate, capital relief trades (CRT) by structuring funding vehicles, rating advisory and private placements. As of 14th June 2025, Stone Mountain Capital has total alternative Assets under Advisory (AuA) of US$ 62.9 billion. 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