Cryptocurrency markets exhibited signs of stabilization in the second week of October, as investors remained hopeful for another “Uptober” rally toward new highs.
In other news, the $11 billion Bitcoin (BTC) whale returned after a two-month absence, transferring an additional $360 million in BTC, indicating a possible shift toward the world’s second-largest cryptocurrency, with another $5 billion still in their wallet.
Adding to the Uptober excitement, the US Securities and Exchange Commission (SEC) has received 31 applications for crypto exchange-traded funds (ETFs), with 21 of these filed in the first eight days of October.
However, the ongoing government shutdown may delay the regulatory response to these applications, as the SEC announced it would operate “under modified conditions” with an “extremely limited number of staff” until a funding bill is approved.
As Democrats and Republicans failed to reach a consensus for the seventh time on Thursday, the government shutdown will extend into next week, with the Senate scheduled to be out until Tuesday, CBS News reported.
$11 billion Bitcoin whale returns with $360 million BTC transfer after two months
A Bitcoin whale that held roughly $11 billion in BTC before converting over $5 billion of that amount into Ether (ETH) two months ago has made another move in the cryptocurrency market with a $360 million Bitcoin transfer.
The whale wallet transferred $360 million worth of Bitcoin to decentralized finance (DeFi) protocol Hyperunit’s hot wallet “bc1pd” on Tuesday. This marks their first transfer in two months, according to blockchain data platform Arkham.
The transaction may indicate another rotation into Ether, judging by the whale’s previous transaction trends.
The $11 billion Bitcoin whale first emerged two months ago, converting approximately $5 billion worth of BTC into Ether, briefly outpacing the second-largest corporate treasury firm, Sharplink, in total ETH holdings, Cointelegraph reported on Sept. 1.
The whale still retained over $5 billion worth of Bitcoin in their primary wallet as of Wednesday, suggesting potential future selling pressure for the world’s first cryptocurrency.
The whale began shifting their funds into Ether on Aug. 21, selling $2.59 billion of BTC for a $2.2 billion spot Ether and a $577 million Ether perpetual long position.
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DeFi TVL hits record $237 billion as daily active wallets fall 22% in Q3: DappRadar
The decentralized application (DApp) sector concluded the third quarter of 2025 with mixed results, as decentralized finance (DeFi) liquidity surged to an all-time high while user engagement fell significantly, based on new data from DappRadar.
DappRadar reported that daily unique active wallets averaged 18.7 million in Q3, reflecting a 22.4% decline from the previous quarter. Meanwhile, DeFi protocols collectively secured $237 billion, representing the highest total value locked (TVL) ever recorded in the sector.
The report underscored a growing divergence between institutional investments in blockchain-based financial platforms and retail user engagement with DApps. As DeFi TVL reached historic liquidity levels, overall activity fell, indicating weaker retail participation.
“Across the entire quarter, every category saw a decrease in active wallets, with the most notable impact seen in the Social and AI segments,” DappRadar stated. AI-driven DApps lost over 1.7 million users, declining from a daily average of 4.8 million in Q2 to 3.1 million in Q3, while SocialFi DApps plunged from 3.8 million to 1.5 million in Q3.
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New Japan PM may boost crypto economy, “refine” blockchain regulations
Japan’s newly elected prime minister, Sanae Takaichi, could pave the way for more “refined” regulations to enhance the nation’s cryptocurrency economy, potentially establishing it as a leading global hub for crypto businesses.
Takaichi was elected leader of the Liberal Democratic Party (LDP) on Saturday and is poised to become Japan’s first female prime minister when she assumes office on Oct. 15.
Experts suggest her leadership may foster a more open approach to technological experimentation, including blockchain innovation, while adhering to Japan’s strict regulatory standards.
Takaichi’s election could have a “material impact on the perception and governance of digital assets within the country,” noted Elisenda Fabrega, general counsel at tokenization platform Brickken.
In prior public roles, Takaichi has voiced support for “technological sovereignty,” emphasizing the “strategic development of digital infrastructure, including blockchain technology,” Fabrega informed Cointelegraph. “From a legal standpoint, this hints that her administration may adopt a stance that is not just permissive but potentially proactive in promoting the digital economy.”
Fabrega added that Takaichi’s political position could strengthen “Japan’s commitment to legal clarity in the crypto realm” and revive interest in the nation as a crypto-friendly innovation hub.
Japan’s government is recognizing blockchain as a “pillar of its digital transformation strategy,” Maarten Henskens, chief operating officer at Startale Group and head of Astar Foundation, remarked.
“A more accommodating monetary policy under the new leadership might sustain liquidity and boost investor interest in alternative assets, including cryptocurrencies,” Henskens told Cointelegraph.
“At Startale and Astar, we view this as a promising environment to continue advancing Japan’s Web3 ecosystem,” he added.
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Afghanistan internet blackout “a wake-up call” for blockchain decentralization
Afghanistan’s recent nationwide internet outage revealed a significant vulnerability in the world’s leading decentralized blockchains: their reliance on centralized internet providers susceptible to governmental actions and technical failures.
The country experienced a near-total internet shutdown lasting about 48 hours before connectivity was restored on Oct. 1, Reuters reported. This disruption was reportedly ordered by the Taliban administration, although officials later attributed it to “technical issues” with fiber optic cables.
Despite blockchains aiming to deliver a censorship-resistant, public network for transferring value, their dependency on centralized internet providers complicates these use cases during outages.
“The Afghanistan blackout is not merely a regional connectivity crisis: It serves as a wake-up call,” stated Michail Angelov, co-founder of decentralized WiFi platform Roam Network. “When connectivity is controlled by a small number of centralized providers, the potential of blockchain can collapse overnight,” he remarked.
The nationwide internet and mobile data services outage impacted around 13 million citizens, according to a September report from ABC News. This represented the first nationwide internet shutdown under Taliban governance, following earlier regional restrictions imposed in September to curtail online activities viewed as “immoral.”
The Taliban denied the existence of the ban, attributing the internet outage to technical difficulties, including problems with fiber optic cables.
Iran has also encountered internet censorship problems since the onset of its conflict with Israel.
The Iranian government restricted internet access for 13 days in June, allowing only domestic messaging apps, prompting individuals in Iran to seek hidden internet proxy links for temporary connectivity, The Guardian reported on June 25.
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$10 billion in Ethereum awaits exit as validator withdrawals surge
This week, Ethereum recorded its largest validator exit on record, with over 2.4 million Ether valued at more than $10 billion pending withdrawal from its proof-of-stake network, although institutional participants are compensating for much of this in the validator entry queue.
Ethereum’s exit queue surpassed 2.4 million Ether worth over $10 billion on Wednesday. The uptick in exits extended the withdrawal queue time to over 41 days and 21 hours, according to blockchain data from ValidatorQueue.com.
Validators play a pivotal role in adding new blocks and verifying transactions on the Ethereum network.
“Significant withdrawals often imply the possibility of token sales, but it doesn’t necessarily equate to sales of tokens,” remarked Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen, adding that “there is no immediate reason for concern from this alone.”
While the $10 billion withdrawal queue is notable, validators are more likely “consolidating from 32 ETH to 2,048 ETH stakes for operational effectiveness,” explained Marcin Kazmierczak, co-founder of blockchain oracle firm RedStone.
This includes increased inflows into liquid staking protocols for improved “capital efficiency,” he informed Cointelegraph, adding:
“A significant portion of withdrawn ETH is redeployed within DeFi, rather than sold.”
“The 44+ day withdrawal wait time sets a natural throttle that prevents supply disruptions,” he illustrated, noting that Ether’s daily volume of $50 billion is still five times larger than the validator queue.
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DeFi market overview
Based on data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization finished the week in positive territory.
The privacy-focused Zcash (ZEC) token surged over 68% to become this week’s biggest gainer in the top 100 for the second consecutive week. The Mantle (MNT) token advanced over 18%, marking the week’s second-best performance.
Thank you for reading our summary of this week’s most significant DeFi developments. Join us next Friday for additional stories, insights, and education on this rapidly evolving sector.
