Oversupply expected to meet rising lithium demand

The largest undercurrent for the lithium market is excessive supply. Since 2020, mined output has climbed 192 percent from 82,000 metric tons to 240,000 metric tons in 2024, as outlined by the US Geological Survey.

As supply grew, demand was unable to keep pace, leading to a mounting glut that has weighed on prices.

“While futures activity can catalyse short-term price movements, beneath the surface demand remains tepid, inventories high and buyers cautious, underscoring a disconnect between price action and market reality,” Paul Lusty, head of battery raw materials at Fastmarkets explained in a September update. “We expect continued price instability in the near term with potential for further corrections unless meaningful supply disruptions materialise.”

The supply increase was anticipated to satiate a growing appetite for EVs that has yet to fully materialize.

The EV boom has fueled strong long-term growth forecasts for lithium, but the market is now facing a sharp imbalance. Global EV sales climbed past 17 million units in 2024 and are projected to top 20 million in 2025, yet a 22 percent surge in mined supply last year has outpaced demand, pushing prices lower and creating a persistent oversupply.

This discrepancy was underscored by industry attendees at Fastmarkets’ Lithium Supply & Battery Raw Materials conference, who warned that the imbalance could persist until at least 2030.

As a result, lithium prices remain under pressure despite strong EV uptake, and a meaningful re-balancing will likely depend on new supply expansions being delayed, mine closures and steeper than anticipated demand growth — potentially in the second half of the decade.

With EV demand expected to accelerate beyond 2030 and new supply projects lagging, Q3 2025 could mark the start of a tighter era. For investors watching battery metals, the key question is whether the market has found a floor — or is merely in the calm before the next supply squeeze.

Chinese lithium supply and access in question

As mentioned, the market did find support through July and August, thanks in part to Chinese battery giant Contemporary Amperex Technology (CATL) (SZSE:300750,HKEX:3750) suspending operations at its Jianxiawo lepidolite mine. Located in the country’s Jiangxi province, it is one of the world’s largest lithium sources.

The shutdown followed the August 9 expiration of the mine’s operating permit, with CATL confirming it is seeking an extension but providing no timeline for restarting production. The halt was expected to last at least three months, removing about 65,000 metric tons of lithium carbonate equivalent — roughly 6 percent of global supply — from the market and reigniting bullish sentiment in an otherwise oversupplied sector.

The shuttering of the mine propelled lithium prices and mining stocks.

In mid-October China introduced new export restrictions on advanced lithium-ion batteries, key materials and production equipment — a move set to ripple through global supply chains.

Effective November 8, 2025, companies will now need export licenses to ship high-energy batteries, cathodes, synthetic graphite anodes and related machinery abroad. The new policy follows July’s limits on lithium iron phosphate (LFP) technology exports, tightening Beijing’s control over the battery sector.

China produces over 70 percent of global cathode materials and more than 95 percent of synthetic graphite, making its export decisions pivotal. S&P Global notes in an October briefing that the new controls are expected to delay production timelines and complicate sourcing for manufacturers outside China, particularly in the US, which imports roughly two-thirds of its lithium-ion batteries from Chinese suppliers.

“Export control does not mean an outright export ban, but rather a stricter approval process,” said Fastmarkets’ Walter Zhang. “We believe that the primary intent is to counter measures such as the US OBBB (One Big Beautiful Bill) Act, while preventing potential technology transfer demands from European or American governments and avoiding the military or dual-use applications of advanced battery technologies.”

Additionally, the move adds a new front to the US-China trade standoff, with Washington expected to deepen partnerships with Korean and Japanese producers like LG Energy Solution and Panasonic to reduce dependency.

While China’s CATL will likely pivot toward Europe and emerging markets, global battery costs and supply volatility are expected to rise through 2026.

US government makes lithium push

Outside of China, the US invested heavily in the lithium-mining segment in Q3.

On October 1, Washington released the first US$435 million tranche of a landmark US$2.23 billion loan to Lithium Americas (TSX:LAC,NYSE:LAC), marking one of the Trump administration’s most significant steps yet to strengthen domestic control over critical minerals.

The funds, directed through the Department of Energy, will support construction of the Thacker Pass lithium project in Nevada, which is set to become the largest lithium source in the Western Hemisphere.

As part of the deal, the department will receive warrants representing a 5 percent equity stake in Lithium Americas and an equivalent interest in its joint venture with General Motors (NYSE:GM).

The agency also agreed to defer US$182 million in debt service over five years, underscoring Washington’s long-term commitment to building a resilient battery supply chain.

Thacker Pass is central to US efforts to reduce reliance on Chinese lithium refining and rival major producers in Australia and Chile. Once operational, Phase 1 of the project will produce 40,000 metric tons of battery-grade lithium carbonate annually — enough to power roughly 800,000 EVs — and reinforce the administration’s push to secure supply.

Looking at the rest of the year and remainder of the decade sentiment towards lithium is cautiously optimistic, according to Benchmark analysts fresh off the heels of this year’s LME Week in London.

“Market participants noted that strong spodumene appetite continues amid limited lepidolite supply from Jiangxi,” a Benchmark overview states. “Attention turned to CATL’s Jianxiawo mine, with its start‑up – whether as soon as next month or delayed to early Q1 26 – likely to influence short‑term pricing.”

Bitcoin and Ether price update

Bitcoin (BTC) was priced at US$107,811, a 3.5 percent decrease in 24 hours. Its lowest valuation of the day was US$107,657, and its highest was US$108,936.

Bitcoin price performance, October 22, 2025.

Chart via TradingView.

Bitwise Chief Investment Officer Matt Hougan believes gold’s explosive price performance this year could offer a glimpse of what lies ahead for Bitcoin, arguing that the world’s top cryptocurrency may be preparing for a similar structural breakout once its remaining pool of sellers runs dry.

Gold has surged roughly 57 percent in 2025, powered largely by sustained central bank accumulation. Bitcoin, meanwhile, has traded in a relatively narrow range between US$108,000 and US$112,000. According to Hougan, the comparison between the two assets provides a potential roadmap for their trajectory going into next year.

“Don’t look at gold’s meteoric rise with envy. Look at it with anticipation. It could end up showing us where bitcoin is headed,” Hougan wrote in a client note this week.

In addition, steady accumulation by exchange-traded funds (ETFs) and corporate treasuries has provided a similar source of structural demand. Since the launch of spot Bitcoin ETFs in January 2024, institutions and corporations have purchased roughly 1.39 million BTC, far outpacing new supply generated by the network.

Market data this week supports the idea of renewed accumulation. Following a US$19 billion liquidation event earlier this month, spot Bitcoin ETFs have recorded US$477 million in positive net inflows.

Predictions about a breakdown below US$100,000 have not materialized, though ongoing long liquidations over the past four hours reveal how vulnerable bullish traders remain near current support.

Ether (ETH) was priced at US$3,796.34, a 4.9 percent decrease in 24 hours. Its lowest valuation of the day was US$3,795.42, and its highest was US$3,873.52.

Altcoin price update

• Solana (SOL) was priced at US$179.68, at its lowest valuation of the day, down by 7.5 percent over the last 24 hours. Its highest valuation of the day was US$185.98.

• XRP was trading for US$2.37, a decrease of 5.2 percent over the last 24 hours and its lowest valuation of the day. Its highest was US$2.41.

Fear and Greed Index snapshot

CMC’s Crypto Fear & Greed Index remains locked in a state of anxiety, sitting in “fear” territory (29) for seven consecutive days and marking its longest streak since April. Its stagnation reflects a growing sense of caution among investors, as Bitcoin continues to trade within a narrow band between US$103,000 and US$115,000 for nearly two weeks.

Over the past 30 days, the index has been in greed territory for just seven days — the same period when Bitcoin reached its all-time high of US$126,000 in early October. Since then, investor sentiment has reversed sharply.

CMC Crypto Fear and Greed Index, Bitcoin price and Bitcoin volume.

Chart via CoinMarketCap.

The current fear phase began on October 11, a day after the largest liquidation event in crypto history erased more than US$20 billion in leveraged positions. Historically, similar periods of heightened fear have marked turning points for Bitcoin. The last extended stretch of fear occurred in March and April during the Trump administration’s tariff standoff with China, when Bitcoin bottomed near US$76,000. Market analysts say the prevailing mood underscores uncertainty following the US Federal Reserve’s recent policy pivot and renewed US-China trade negotiations.

Crypto derivatives and market indicators

Bitcoin derivatives metrics suggest traders are taking a wait-and-see approach.

Liquidations for contracts tracking Bitcoin have totaled approximately US$6.12 million in the last four hours, with the majority being long positions, signaling continued risk aversion. Ether liquidations showed a similar pattern, with long positions making up the majority of US$9.35 million in liquidations.

Futures open interest for Bitcoin was down by 1.09 percent to US$68.51 billion over four hours, with further decreases in the final hour of trading. Ether futures open interest moved by -1.15 percent to US$43.7 billion.

The funding rate remains positive for both crytocurrencies, with Bitcoin at 0.008 and Ether at 0.002, indicating more overall bullish positioning than bearish.

Bitcoin’s relative strength index stood at 44.98, meaning its price momentum is in a neutral to slightly bearish zone.

Today’s crypto news to know

Senate Democrats tell Trump envoy to explain undivested crypto stakes

Senate Democrats have called on Steve Witkoff, US President Donald Trump’s special envoy to the Middle East, to explain why he has not divested from his crypto holdings despite federal ethics requirements.

In a letter led by Senator Adam Schiff, eight lawmakers pressed Witkoff for details on his interests in World Liberty Financial, the Trump-linked crypto firm he co-founded in 2024, and several affiliated entities.

Witkoff’s latest ethics disclosure, dated August 13, shows he still owns stakes in multiple crypto-related businesses, including WC Digital Fi and SC Financial Technologies. Lawmakers allege these investments pose potential conflicts of interest given his diplomatic role and the company’s business ties to the United Arab Emirates.

The scrutiny follows a New York Times report linking Witkoff’s crypto dealings to a US$2 billion Emirati investment in Binance funded through World Liberty Financial’s stablecoin, USD1.

Neither the White House nor World Liberty Financial has commented on the matter.

FalconX announces plans to acquire 21Shares

FalconX announced plans to acquire 21Shares, one of Europe’s leading crypto exchange-traded product issuers.

The deal, confirmed Wednesday, will integrate FalconX’s prime brokerage operations, which serves over 2,000 institutional clients, with 21Shares’ portfolio of 55 listed products across Bitcoin, Ether and other digital assets.

21Shares currently oversees more than US$11 billion in assets and will continue operating independently under CEO Russell Barlow following the deal. While the financial terms remain undisclosed, the transaction marks FalconX’s third major acquisition this year after Arbelos Markets and Monarq Asset Management.

Hong Kong approves first spot Solana ETF

Hong Kong regulators have approved the region’s first spot Solana ETF.

The Securities and Futures Commission granted authorization to China Asset Management Company to launch the Hua Xia Solana ETF on the Hong Kong Stock Exchange on October 27. The product will trade through OSL Exchange, with OSL Digital Securities as sub-custodian and BOCI-Prudential Trustee serving as the primary custodian.

Each unit will consist of 100 shares, with a minimum investment of about US$100.

The fund’s debut makes Solana the third cryptocurrency — after Bitcoin and Ethereum — to receive regulatory approval for a spot ETF in Hong Kong.

Fed governor proposes skinny master accounts for crypto access to Fed payments

Fed Governor Christopher Waller signaled a major policy shift during his opening remarks at the Payments Industry Conference on Tuesday (October 21), welcoming DeFi and crypto innovators into mainstream payments dialogue and proposing a new framework for direct access to Fed payment infrastructure for eligible firms.

In his speech, Waller recognized traditional banks and crypto-native fintechs as core stakeholders and stressed the Fed’s intent to be active in technology-driven payment revolutions like distributed ledger technology, tokenized assets and artificial intelligence (AI). The proposed payment accounts, referred to as skinny master accounts, would offer eligible nonbank entities direct access to the Fed’s payments rails, bypassing third-party banks, but without interest, overdraft protection or discount window access, and potentially with balance caps.

Waller said this tailored access aims to match the needs and risks of payment firms and digital asset companies with a simpler review. He also noted that the Fed is conducting hands-on research into tokenization, smart contracts and AI/payments intersection and will seek industry input on the new account framework.

Andreessen Horowitz highlights maturing crypto industry

Andreessen Horowitz’s most recent State of Crypto 2025 report highlights a new era in the cryptocurrency industry that the firm says is defined by real utility and maturing institutional adoption.

The authors point out stablecoins’ explosion as a dominant macroeconomic force, citing nearly US$46 trillion in processed transactions over the past year, a figure that rivals traditional payment systems.

The report also emphasizes infrastructure upgrades across blockchains like Ether and Solana, which have increased transaction speeds while lowering costs, as well as improved regulatory clarity in the US through supportive legislative actions, which have been major catalysts helping revive builder confidence and establish frameworks for digital asset oversight that balance innovation with investor protection.

World app expands into prediction markets

World, the digital identity project formerly known as Worldcoin, is expanding into prediction markets by integrating Polymarket. The company, which is led by OpenAI CEO Sam Altman, announced on Tuesday that its World app, a mobile app combining a digital wallet with a decentralized identity tool, has integrated the Polymarket app.

The launch of the Polymarket mini app on World enables World app users to place Polymarket bets directly from the World app wallet using Circle’s USDC or World’s token, Worldcoin.