Alex Thorn, Galaxy Digital's head of research, argues that the structural bull market in crypto remains intact despite October's volatility and a softer risk appetite. His analysis identifies three major tailwinds that could power the next leg higher for digital assets, even as near-term conditions remain fragile.
October's Market Correction and Deleveraging
The Oct. 10 sell-off began with high leverage slamming into thin order books, according to Thorn's assessment shared with Galaxy Research subscribers. Market conditions worsened as exchange auto-deleveraging capped some market-maker shorts and thinned liquidity at the worst possible moment, amplifying downward pressure.
Roughly $19 billion in liquidations occurred as Bitcoin slid from an Oct. 6 all-time high near $126,300 to an intraday low around $107,000. Ethereum fell from approximately $4,800 to roughly $3,500 before markets stabilized into the weekend, marking one of the most severe deleveraging events in recent crypto history.
Macroeconomic Headwinds and Crypto-Specific Drag
Risk appetite faded again as macro jitters resurfaced, with Thorn pointing to softness in chip stocks and a hawkish turn from a Federal Reserve governor. Renewed concerns and geopolitical noise contributed to classic risk-off behavior, with gold and silver setting fresh records and the 10-year Treasury yield dipping back below 4%.
Thorn also identified a crypto-specific drag from cooled digital asset treasury companies, noting that with equity prices down across that cohort, there's less price-insensitive buying to deploy into crypto. This adds to near-term fragility even after the initial washout, though medium-term prospects remain constructive.
Key Tailwinds for Digital Assets
The first major tailwind Thorn highlights is AI capital spending, which he frames as a real-economy capex cycle led by cash-rich incumbents, including hyperscalers, chipmakers, and data-center operators. Corporate budgets and government posture point to a long runway, distinguishing this wave from purely speculative bubbles.
Stablecoins represent the second tailwind, with dollar-linked tokens continuing to gain traction as payment rails that broaden participation and deepen liquidity. Thorn believes these plumbing effects can support the ecosystem even when price action remains choppy, creating a foundation for sustainable growth.
Tokenization serves as the third catalyst, with real-world assets and traditional market infrastructure moving on-chain from pilots to implementation. This transition creates fresh demand for block space and core assets that secure, route, and settle activity, benefiting platforms tied to that flow and strengthening the case for Solana and Ethereum as infrastructure plays.
Positive Outlook for Bitcoin and Major Cryptocurrencies
Within this backdrop, Thorn remains positive on Bitcoin's digital gold role amid persistent doubts about fiscal and monetary prudence. He sees a favorable setup for majors tied to stablecoin usage and tokenization, though near-term rallies risk stalling below prior highs as markets digest recent shocks and rebuild confidence.