ALTERNATIVE MARKETS UPDATE – MID OCTOBER 2025

​Gold has risen sharply in recent weeks, climbing past $4,000 per ounce and gaining more than 50% since the start of the year, as shown in Figure 1. The rally accelerated after September as investors reacted to a mix of geopolitical and macroeconomic developments. Prices surged as tensions in the Middle East intensified, driving safe-haven demand, but gold briefly lost momentum once a peace deal was reached, reducing immediate global uncertainty. However, expectations of imminent interest rate cuts and renewed tensions between the United States and China over rare earth minerals and retaliatory tariffs quickly offset that effect. Strong central bank purchases, continued ETF inflows, and a softer dollar have added further support, pushing gold to record levels and making it one of the top-performing assets of 2025 so far.

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RESEARCH PERSPECTIVE VOL. 261 October 2025 Alternative Markets Update Gold has risen sharply in recent weeks, climbing past $4,000 per ounce and gaining more than 50% since the start of the year, as shown in Figure 1. The rally accelerated after September as investors reacted to a mix of geopolitical and macroeconomic developments. Prices surged as tensions in the Middle East intensified, driving safe-haven demand, but gold briefly lost momentum once a peace deal was reached, reducing immediate global uncertainty. However, expectations of imminent interest rate cuts and renewed tensions between the United States and China over rare earth minerals and retaliatory tariffs quickly offset that effect. Strong central bank purchases, continued ETF inflows, and a softer dollar have added further support, pushing gold to record levels and making it one of the top-performing assets of 2025 so far. Figure 1: Development of Gold since the Beginning of 2025, Source: Investing, October 2025 Last Friday, financial markets were rattled after the United States announced plans to impose tariffs of up to 100% on all Chinese imports, responding to Beijing’s new restrictions on rare earth mineral exports. The escalation reignited fears of a renewed trade war between the world’s two largest economies, triggering a sell-off in equities and a sharp move into safe-haven assets. Gold prices surged past $4,000 per ounce in the immediate aftermath, highlighting how quickly sentiment can shift amid rising uncertainty. The episode served as a clear reminder that volatility has returned to global markets, with geopolitical developments once again dictating short-term price movements and investor positioning. Over the past two weeks, crypto markets have seen renewed bouts of volatility, with Bitcoin briefly topping the $120,000 mark before tumbling toward $110,000 amid the latest US–China trade tensions and tariff threats. That swing underscores how sensitive the space is to macro and geopolitical headlines. Still, Bitcoin is now up roughly 25 % on the year and these drawdowns have been much stronger historically. Ethereum has posted a similar gain, but its path was characterized by significantly more volatility. Back in April, when the first tariff shock hit, ETH dropped was down 50%, and its recent recovery has been more dramatic, as shown in Figure 2. The divergence between Bitcoin and the broader altcoin market has become more apparent, as investors increasingly view Bitcoin as the more resilient, institutional-grade assets while smaller tokens remain highly sensitive to liquidity shifts and risk sentiment. Figure 2: Bitcoin Price and YTD of Bitcoin & Ethereum During 2025, Source: CoinMarketCap, October 2025 Following the strong rebound in major cryptocurrencies, attention has increasingly shifted toward Digital Asset Treasury (DAT) companies – firms that manage and optimise corporate balance sheets by holding, lending, or actively deploying digital assets such as Bitcoin and Ethereum. These companies have surged in prominence as more corporates and funds adopt on-chain treasury strategies to hedge against inflation, diversify reserves, and generate yield in a high-liquidity environment. The recent crypto rally, coupled with improving regulatory clarity and rising institutional adoption of tokenised assets, has fuelled a wave of new entrants employing this model and driven valuations in the sector sharply higher. The appeal of the industry arises from the fact that DATs can accumulate more cryptocurrencies for every dollar spent as opposed to ETFs. Potential sources of these additional tokens arise from staking yields, being able to buy locked tokens, among others. Figure 3 shows an example of Bitmine Immersion Technologies, the originally largest ETH miners to becoming an Ethereum DAT. The company expanded through a PIPE deal to accumulate more ETH, which led to a significant increase in its share price. Since then, the company enjoyed a great equity rally through the appreciation of ETH, and the premium investors associate with the business model to accumulate more tokens in the long-term as opposed to holding an ETF or the tokens themselves. Figure 3: Price Growth Contribution of Bitmine Immersion Technologies from June 2025 to September 2025, Source: Pantera Capital, October 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. 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