The cryptocurrency markets exhibited signs of consolidation in the second week of October, even as investors maintained their hopes for another “Uptober” rally toward new peaks.
This week also highlighted the return of an $11 billion Bitcoin (BTC) whale after a two-month absence, transferring an additional $360 million in BTC, which may indicate a rotation into the second-largest cryptocurrency, with an extra $5 billion still in their wallet.
In a potential catalyst for Uptober, the US Securities and Exchange Commission (SEC) received 31 applications for crypto exchange-traded funds (ETFs), with 21 submitted in the first eight days of October.
However, the ongoing government shutdown might delay the regulatory response to these applications, as the SEC announced it would function “under modified conditions” with “extremely limited staff” until a funding bill is authorized.
As Democrats and Republicans failed to reach a consensus for the seventh time on Thursday, the government shutdown will extend into the following week, with the Senate set to recess until Tuesday, CBS News reported.
$11 billion Bitcoin whale returns with $360 million BTC transfer after two months
A Bitcoin whale, previously holding approximately $11 billion in BTC and having rotated over $5 billion into Ether (ETH) two months back, has re-entered the cryptocurrency market with another $360 million Bitcoin transfer.
The whale’s address transferred $360 million worth of Bitcoin to decentralized finance (DeFi) protocol Hyperunit’s hot wallet “bc1pd” on Tuesday, marking their first transaction in two months, according to blockchain data platform Arkham.
This transfer could indicate another shift toward Ether based on the whale’s previous transaction habits.
The $11 billion Bitcoin whale resurfaced two months ago, having rotated roughly $5 billion worth of BTC into Ether, momentarily overtaking Sharplink as the second-largest corporate treasury in terms of ETH holdings, as Cointelegraph reported on Sept. 1.
The whale still held more than $5 billion worth of Bitcoin in their main wallet as of Wednesday, which might signal further selling pressure for the original cryptocurrency.
The Bitcoin whale began shifting funds into Ether on Aug. 21 when they sold $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 outcomes, as decentralized finance (DeFi) liquidity surged to an all-time high while user engagement dropped sharply, based on new data from DappRadar.
In a report sent to Cointelegraph, DappRadar stated that daily unique active wallets averaged 18.7 million in Q3, down 22.4% from the previous quarter. Meanwhile, DeFi protocols collectively secured $237 billion, the highest total value locked (TVL) ever documented in the industry.
The report illustrated a growing divergence between institutional investments in blockchain-based financial platforms and retail user engagement with DApps. While DeFi TVL achieved unprecedented liquidity levels, overall activity lagged, indicating weaker retail participation.
“Throughout the quarter, every category experienced a decline in active wallets, but the impacts were especially notable in the Social and AI categories,” DappRadar noted. AI-focused DApps lost over 1.7 million users, dropping from a daily average of 4.8 million in Q2 to 3.1 million in Q3, while SocialFi DApps fell 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 appointed prime minister, Sanae Takaichi, might pave the way for more “refined” regulations to advance the country’s cryptocurrency economy, positioning it as the next global hub for crypto firms.
Takaichi, who was elected leader of the Liberal Democratic Party (LDP) on Saturday, is set 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 advancements in blockchain, while maintaining Japan’s stringent regulatory standards.
Takaichi’s election may influence the perception and governance of digital assets in the nation, according to Elisenda Fabrega, general counsel at tokenization platform Brickken.
In her previous public positions, Takaichi has advocated for “technological sovereignty,” underscoring the “strategic development of digital infrastructure, including blockchain technology,” Fabrega mentioned to Cointelegraph. “From a legal standpoint, this implies that her administration may adopt a stance that is not only permissive but potentially proactive in fostering the digital economy.”
Fabrega added that Takaichi’s political positioning may bolster “Japan’s commitment to legal certainty in the crypto sector” and reinvigorate interest in the country as an innovation-friendly crypto hub.
Japan’s government acknowledges blockchain as a “pillar of its digital transformation strategy,” stated Maarten Henskens, COO at Startale Group and head of Astar Foundation.
“A more relaxed monetary policy under the new administration could sustain liquidity and stimulate investor demand for alternative assets, including cryptocurrencies,” Henskens explained to Cointelegraph.
“At Startale and Astar, we view this as a favorable environment to further advance Japan’s Web3 ecosystem,” he noted.
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Afghanistan internet blackout “a wake-up call” for blockchain decentralization
Afghanistan’s recent nationwide internet outage highlighted a significant vulnerability in the world’s leading decentralized blockchains: their reliance on centralized internet providers, which are susceptible to government intervention and technical issues.
The country experienced a near-total internet failure lasting about 48 hours before connectivity was restored on Oct. 1, according to Reuters. The disruption was allegedly sanctioned by the Taliban administration, though officials later attributed the cause to “technical problems” associated with fiber optic cables.
Despite blockchains promoting a public, censorship-resistant network for value transfers, the dependence on centralized internet providers complicates these applications during outages.
“The Afghanistan blackout is not merely a regional connectivity issue: it is a wake-up call,” asserted Michail Angelov, co-founder of decentralized WiFi platform Roam Network. “When connectivity is controlled by a few centralized providers, the potential of blockchain can vanish overnight,” he emphasized.
The nationwide internet and mobile data outage affected around 13 million citizens, according to a September report from ABC News. This was the first nationwide internet blackout under Taliban rule, following earlier regional restrictions introduced to limit online activities deemed “immoral.”
The Taliban denied enforcing the ban, blaming the internet outage on technical difficulties, including fiber optic cable issues.
Iran has also been experiencing internet censorship issues since the onset of its conflict with Israel.
The Iranian government imposed an internet blackout for 13 days in June, permitting only domestic messaging applications, prompting citizens to seek hidden internet proxy links for temporary access, reported The Guardian on June 25.
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$10 billion in Ethereum awaits exit as validator withdrawals surge
Ethereum encountered its largest validator exit on record this week, with over 2.4 million Ether, valued at more than $10 billion, pending withdrawal from its proof-of-stake network, although institutional participants are largely filling the validator entry queue.
Ethereum’s exit queue exceeded 2.4 million Ether, valued at over $10 billion as of Wednesday. The increase in exits extended the validator queue time to upwards of 41 days and 21 hours, according to blockchain data from ValidatorQueue.com.
Validators are essential for adding new blocks and verifying transactions on the Ethereum network, playing a crucial role in its function.
“Significant withdrawals always imply the possibility of token sales; however, it doesn’t necessarily equate to immediate sales,” stated Nicolai Sondergaard, a research analyst at crypto intelligence platform Nansen, adding, “there’s no cause for concern based solely on this.”
While the $10 billion withdrawal queue is notable, validators are predominantly “consolidating from 32 ETH to 2,048 ETH stakes for improved operational efficiency,” suggested Marcin Kazmierczak, co-founder of the blockchain oracle company RedStone.
This includes increased inflows into liquid staking protocols for enhanced “capital efficiency,” he shared with Cointelegraph, adding:
“A significant portion of withdrawn ETH is redeployed within DeFi, rather than being sold.”
“The 44+ day withdrawal wait creates a natural throttle preventing supply shocks,” he explained, noting that Ether’s daily trading volume of $50 billion remains five times larger than the validator queue.
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DeFi market overview
Data from Cointelegraph Markets Pro and TradingView indicates that the majority of the 100 largest cryptocurrencies by market capitalization concluded the week on a positive note.
The privacy-oriented Zcash (ZEC) token surged more than 68%, securing the top gainer position in the top 100 for the second consecutive week. The Mantle (MNT) token also performed well, rising over 18% in the week’s second-best performance.
Thank you for reading our summary of this week’s most influential DeFi developments. Join us next Friday for more stories, insights, and education about this dynamically evolving space.
