ESMA probes tokenized collateral as France backs stablecoin tax plans and Trump rules out pre-election Iran strikes. Today’s BTC is near $83K amid Greed sentiment. The cryptocurrency market rebounded after a sharp decline in the previous trading session. Bitcoin fell to around $80,300 before gradually recovering to nearly $83K, with 24-hour gain of approximately 0.61%. Ether traded near $2,500 and remained weaker than Bitcoin after losing about 9% over the past week. Leveraged positions contracted significantly amid recent market volatility. According to Coinglass, total liquidations reached USD 1.191 billion over the reported 24-hour period. Long liquidations accounted for USD 1.056 billion compared with USD 135 million in short liquidations, indicating that the previous selloff primarily affected bullish positions. The Ether derivatives market also experienced substantial deleveraging. Total ETH futures open interest fell 5.18% over 24 hours to USD 32.151 billion as leveraged positions were reduced. Meanwhile, U.S. spot crypto ETFs continued to record outflows. Spot Bitcoin ETFs saw net outflows of approximately USD 244 million on October 8, while spot Ether ETFs recorded net outflows of USD 72.544 million. These figures indicate continued weakness in short-term demand through traditional investment products. Market sentiment also weakened as the Crypto Fear & Greed Index declined to 59 from 64 yesterday and 72 last week. Despite the decline, sentiment remained in the Greed category. On the macroeconomic front, U.S. President Donald Trump said the United States would not launch new military strikes against Iran before the November 3 midterm elections. Oil prices fell following the announcement, while some risk assets recovered. Although Bitcoin has rebounded from its previous session low, Ether's relative weakness and continued ETF outflows highlight ongoing adjustments in market capital allocation. Declining futures open interest also suggests that leveraged positioning remains under pressure.

Source: Alternative

Key News Highlights:

ESMA Opens Tokenized Collateral Consultation on Liquidation and Clearing Risks During Market Stress

The European Securities and Markets Authority (ESMA) launched a consultation on tokenized collateral on October 9 to assess the feasibility and potential risks of using tokenized assets as collateral in central counterparty clearing operations. The consultation focuses on whether central counterparties (CCPs) can promptly obtain and liquidate tokenized collateral during periods of severe market volatility, liquidity shortages or clearing member defaults. It also examines whether these assets can be converted into readily available funds when needed. Tokenized collateral refers to asset rights recorded and transferred through blockchain or other distributed ledger technologies. This includes digital representations of existing financial assets and assets issued directly on distributed ledgers. ESMA noted that assets with strong liquidity in traditional financial markets may face additional limitations after tokenization. These risks may arise from redemption procedures, transfer restrictions, interoperability issues and uncertainty over legal ownership. The regulator will also examine whether token transfers constitute legally valid transfers of ownership of the underlying assets. Another key consideration is whether clearing institutions can obtain legally enforceable control over collateral during clearing operations. The consultation covers tokenized cash, stablecoins, tokenized deposits and other settlement assets. It will also assess how these instruments interact with existing financial market infrastructure. European financial institutions have already begun applying distributed ledger technology to collateral management. For example, Eurex Clearing introduced a related service in 2025 and facilitated live securities transfers involving major financial institutions. ESMA plans to review the consultation responses in the first quarter of 2027 before determining whether additional regulatory measures or harmonized supervisory standards are necessary. No new mandatory requirements for tokenized collateral have been announced at this stage.

French Finance Committee Backs Stablecoin Conversion Tax Proposals in 2027 Budget Bill

The Finance Committee of France's National Assembly recently approved several amendments concerning cryptocurrency taxation. The proposals include extending capital gains taxation to conversions of crypto assets into fiat-pegged stablecoins and expanding the scope of exit tax provisions for cryptocurrency holders. Under Amendment I-CF1826 proposed by lawmaker Nicolas Sansu, conversions of Bitcoin or other crypto assets into electronic money tokens that meet relevant EU definitions would no longer qualify for the existing tax deferral treatment available to certain crypto-to-crypto transactions. The proposal identifies differences in the current tax treatment of cryptocurrency conversions and transactions involving fiat-pegged stablecoins. It seeks to address these differences through legislative changes. If enacted, the new rules are expected to take effect on January 1, 2027. Investors could therefore incur taxable capital gains when converting crypto assets into qualifying stablecoins even without withdrawing funds into fiat currency through a bank account. The committee also supported Amendment I-CF798 introduced by lawmaker Daniel Labaronne. This proposal would allow eligible realized cryptocurrency losses to be carried forward for up to 10 years and offset against future taxable gains. Another amendment seeks to expand France's exit tax regime to include directly held crypto assets. Under the proposal, taxpayers relocating their tax residence outside France could face taxation on unrealized capital gains if their household cryptocurrency holdings exceed EUR 800,000 and the relevant conditions are met. France's National Assembly is scheduled to begin reviewing the 2027 Finance Bill on October 13. The proposed amendments must still complete the remaining legislative process and should not be treated as enacted tax rules. Meanwhile, the EU's DAC8 crypto tax reporting requirements have been in effect since January 1, 2026. These rules require applicable crypto service providers to collect and report relevant user identity and transaction information for exchange between national tax authorities.

Trump Rules Out Iran Strikes Before Midterm Elections as Bitcoin Rebounds From $80,300

U.S. President Donald Trump stated on Truth Social on October 8 that the United States would not launch new military strikes against Iran before the November 3 midterm elections. He also indicated that discussions between Washington and Tehran were continuing. Before the announcement, geopolitical tensions in the Middle East and concerns over potential energy supply disruptions remained major issues for global financial markets. Bitcoin briefly fell into the $80,300 to $80,400 range on Thursday and reached its lowest level in nearly three weeks. Following Trump's statement, cryptocurrencies and several traditional risk assets rebounded. Bitcoin initially recovered to around $82,500 before climbing back above $83,000 later on Friday. Despite the short-term recovery, Bitcoin and Ether remained approximately 4% and 9% lower over the past week, respectively. The latest gains therefore have not fully reversed the losses recorded during the recent market downturn. Global energy markets also reacted to the announcement. Brent crude futures fell as much as 1.61% on Friday to around $102.60 per barrel, while West Texas Intermediate crude futures also declined. The developments come amid ongoing concerns over U.S.-Iran tensions, shipping security in the Strait of Hormuz and global oil supplies. These issues had previously heightened market concerns about energy prices and inflationary pressures. Trump described the ongoing discussions as making progress, although no formal peace agreement has been announced. U.S. economic sanctions against Iran and regional military deployments also remain in place. In the derivatives market, Coinalyze data showed that Bitcoin futures open interest declined approximately 1.9% over the reported 24-hour period to USD 27.1 billion. The decline indicates that Bitcoin's recovery at the time was not accompanied by a significant increase in new leveraged futures positions. Market attention remains focused on the U.S.-Iran negotiations, energy price movements and adjustments in cryptocurrency derivatives positioning following the previous session's large-scale liquidations.

U.S. Spot Bitcoin and Ether ETFs Record Outflows as Ether Funds Extend Losing Streak to Eight Trading Days

U.S.-listed spot Bitcoin and Ether exchange-traded funds (ETFs) both recorded net outflows on October 8 as investors withdrew funds from crypto investment products amid recent market volatility. According to SoSoValue, spot Bitcoin ETFs recorded total net outflows of approximately USD 244 million during the session. Fidelity's FBTC accounted for roughly USD 197 million in net outflows, making it the largest source of withdrawals among spot Bitcoin ETFs that day. In contrast, Franklin Templeton's EZBC attracted approximately USD 4.7143 million in net inflows and was among the few products to record positive fund flows. Spot Ether ETFs also recorded net outflows of approximately USD 72.544 million on October 8. This marked their eighth consecutive U.S. trading day of net outflows, indicating that the withdrawals have persisted beyond a single trading session. BlackRock's ETHA accounted for approximately USD 71.1208 million in net outflows and represented the largest source of withdrawals among Ether funds. Meanwhile, Fidelity's FETH recorded net inflows of approximately USD 5.503 million. Morgan Stanley's MSSE also attracted about USD 1.3209 million in net inflows. These differences show that individual funds continued to experience varying investor flows despite broader withdrawals across the category. Based on U.S. trading data through October 8, spot Bitcoin and Ether ETFs recorded combined net outflows of approximately USD 986 million since the beginning of October. Cumulative outflows from Ether ETFs exceeded those from Bitcoin ETFs during this period. Despite the recent withdrawals, spot Ether ETFs maintained positive cumulative net inflows since their launch. This highlights the difference between short-term fund movements and overall capital allocation over a longer period. ETF flow figures are reported according to U.S. trading sessions and therefore follow a different reporting schedule from the continuously operating cryptocurrency market. The latest subscription and redemption activity remains subject to confirmation through subsequent complete trading-day records.

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