The calm between bear and bull
The crypto market is in a somewhat awkward transitional phase. The turmoil of the bear market is gradually fading, but there's still no sign of the excitement that comes with a bull market. Yet beneath the surface of this seemingly uneventful period, Bitcoin faces an important challenge. Find out more in this edition of Bitvavo's Market News.
Market update
During the transition from bear to bull market, negative emotions like fear, anger, and panic have already subsided, but the relief, excitement, and thrill of a full-blown bull market have yet to materialize.
This period in between is often described as dull and subdued, with terms like indifference and despondency often cropping up in literature. That's a fitting description of today's crypto market. Committed investors are building long-term positions, and each successive low is higher than the last. Steady progress, but hardly exciting.
During previous occurrences of this market cycle phase, the crypto market was just as sensitive to external forces as it is today. In 2020, it was the COVID-19 pandemic, and in 2023, turmoil among regional banks in the US. This time, we face a mix of oil prices, inflation, bond yields, and AI hype.
Bitcoin's only challenge is to keep the next low on the weekly chart above €50,700, which would give us a higher low (HL) after a higher high (HH). Just like in 2023, the ideal scenario would be for Bitcoin to climb further before establishing a higher low (HL) above the dominant average, which currently sits at €65,000.
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AI agent payments taking off
As you read this, somewhere an AI agent that has written some code, say, a smart contract for Ethereum, wants to have it checked for vulnerabilities. Another AI agent quotes a price of 89 cents, payable in USDC. The first agent pays from its wallet, the transaction is settled in seconds, and a security report arrives minutes later. No human clicked any approval button.
This is no future scenario, but a service that already exists: AgentLISA. The audit service, which itself runs on a language model, is featured in a recent Chainalysis report. The report focuses on agentic rails, such as payment protocols that AI agents can use. According to Chainalysis, one of these protocols, x402, has already processed over 138 million transactions. More importantly, spending patterns are showing signs of maturity.
From testing to regular use
According to Chainalysis, this segment of the market is moving beyond one-off experiments towards regular use. One of the indicators it looks at is how wallets are being used. For example, the share of wallets topped up within 30 days rose from 71% to 89% in less than a year.
More telling is that wallets are becoming active faster. In late 2025, when the protocol was still new, roughly 73 days passed between a wallet being funded and its first payment. By the third quarter of 2026, that gap had shrunk to just 18 minutes. Wallets are now being created for specific tasks that are ready to go, with funds needing to move immediately from A to B.
Moreover, almost all payments are tiny: over 87% are between a hundredth of a cent and 10 cents, with the majority falling between 1 and 10 cents per transaction.
Computing power and audits
What are agents spending their money on? Most of it goes towards information-based services: code reviews, financial data, and... computing power, the raw material needed to run language models. Chainalysis identifies this last category, known as model inference, as one of the largest.
The report also reveals a striking geographical divide in how these tasks are distributed. Of all traceable inference transactions, 88% came from US wallets and 0.1% from Chinese wallets. Conversely, roughly nine out of ten payments for security and code analysis originated from China-linked wallets, with almost all directed to a single address: AgentLISA.
On a global scale, current AI agent activity remains modest. Yet for the first time, a pattern of genuine economic activity behind these tiny digital payments is being revealed.
In other news
Qivalis takes major step toward European euro stablecoin. The consortium consists of 37 banks from 15 countries, including ING, Rabobank, and ABN AMRO. On Wednesday, it received an electronic money institution license from the Dutch Central Bank (DNB), clearing a major regulatory hurdle under MiCA. According to Spanish media, Qivalis is aiming for a November launch on Ethereum. Its goal: to provide European digital money for payments, cryptocurrency trading, and on-chain securities.
Operation Choke Point 2.0 was real, OCC confirms. According to the US regulator, banks have systematically denied banking services to entire sectors, including crypto. This provides official backing for suspicions that have persisted for years. Although the OCC strongly opposes this practice, the underlying problem will likely persist: banks are expected to act as enforcers, and their risk policies shift with the political winds.
Trump's White House crypto team has largely departed. This week, we learned that presidential council leader Patrick Witt is stepping down. The reason is procedural, as his temporary appointment has expired. Bo Hines, David Sacks, and Harry Jung have also previously left their roles. While their reasons for leaving vary, the string of departures is striking given the impasse over the CLARITY Act. For now, it remains unclear who will lead the stalled negotiations.
No matter where AI leads, Bitcoin will benefit, says Bitwise CIO Matt Hougan. Hougan argues that strong productivity growth favors scarce assets. But even if the AI boom turns out to be a bubble that bursts, he believes Bitcoin will come out ahead. In that scenario, Hougan expects bailouts and cash injections to push Bitcoin's price higher. And if AI delivers more moderate growth? Then continued adoption and ETF inflows will drive the necessary expansion. In his letter to Bitwise investors, Hougan makes his stance clear: he's bullish.
Satoshi Radio: Last week, images surfaced of hardware wallets containing spy chips. In the latest Satoshi Radio, the hosts discuss what’s going on and how you can protect yourself. The hosts also look at the 2.5 million BTC that cannot be moved to quantum-safe addresses. What should be done with these coins? Finally, the market update: is the crypto market holding up?
This article is for informational purposes only and does not constitute a marketing communication or recommendation. None of the content herein should be considered as investment advice or a substitute for it. Bitvavo makes no guarantees regarding the accuracy or completeness of the provided information. Investments involve risks. There is a possibility of losing your entire invested capital.