Cryptocurrency markets exhibited consolidation signs in the second week of October, with investors remaining optimistic about a potential “Uptober” rally toward new highs.
In the news this week was the $11 billion Bitcoin (BTC) whale who resurfaced after a two-month break to transfer another $360 million in BTC, indicating a possible shift toward the second-largest cryptocurrency, leaving an additional $5 billion in their wallet.
Another potential catalyst for the Uptober rally is the US Securities and Exchange Commission (SEC), which received 31 applications for crypto exchange-traded funds (ETFs), with 21 filed in the first eight days of October.
However, the ongoing government shutdown could delay the regulatory response to these ETF applications, as the SEC announced it would operate “under modified conditions” with a “very limited number of staff” until a funding bill is passed.
As Democrats and Republicans failed to reach an agreement for the seventh time on Thursday, the government shutdown will persist into next week, with the Senate not returning until Tuesday, CBS News reported.
$11 billion Bitcoin whale returns with $360 million BTC transfer after two months
A Bitcoin whale that held approximately $11 billion in BTC before shifting over $5 billion into Ether (ETH) two months ago has re-entered the cryptocurrency market with another $360 million Bitcoin transfer.
The whale’s address shifted $360 million worth of Bitcoin to the decentralized finance (DeFi) protocol Hyperunit’s hot wallet “bc1pd” on Tuesday. This marked their first transfer in two months, according to blockchain data platform Arkham.
The transfer may indicate another shift back to Ether, considering the whale’s previous transaction behaviors.
This $11 billion Bitcoin whale first surfaced two months ago, rotating about $5 billion BTC into Ether, temporarily outpacing the second-largest corporate treasury firm, Sharplink, in terms of total ETH holdings, Cointelegraph reported on Sept. 1.
As of Wednesday, the whale still held over $5 billion worth of Bitcoin in their main wallet, suggesting potential selling pressure for the world’s first cryptocurrency.
The Bitcoin whale began rotating 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) industry concluded the third quarter of 2025 with mixed results, as decentralized finance (DeFi) liquidity soared to a record high, while user activity sharply declined, according to new data from DappRadar.
In a report to Cointelegraph, DappRadar reported that daily unique active wallets averaged 18.7 million in Q3, down 22.4% from the previous quarter. Meanwhile, DeFi protocols collectively locked in $237 billion, the highest total value locked (TVL) ever in this sector.
The report underscored a disconnect between institutional capital flowing into blockchain-based financial platforms and retail users’ engagement with DApps. While DeFi TVL peaked at record liquidity levels, overall activity lagged, hinting at diminished retail participation.
“Throughout the quarter, every category saw a drop in active wallets, but the impact was mainly observed in the Social and AI sectors,” DappRadar noted. AI-focused 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 decreased 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, may pave the way for more “refined” regulations to enhance the country’s cryptocurrency economy, potentially positioning Japan as a global hub for crypto companies.
Takaichi was elected leader of the Liberal Democratic Party (LDP) on Saturday and is set to become Japan’s first female prime minister when she officially takes office on Oct. 15.
Experts believe her leadership could foster a more open approach toward technological experimentation, including blockchain innovation, while upholding Japan’s strict regulatory standards.
Takaichi’s election could significantly influence the governance and perception of digital assets within the country, as noted by Elisenda Fabrega, general counsel at tokenization platform Brickken.
In previous public roles, Takaichi has shown support for “technological sovereignty,” advocating for the “strategic development of digital infrastructure, including blockchain technology,” Fabrega told Cointelegraph. “Legally, this suggests her administration may take a posture that is not only permissive but possibly proactive in promoting the digital economy.”
Fabrega further mentioned that Takaichi’s political stance may bolster “Japan’s commitment to legal clarity in the crypto space” and reignite interest in the nation as an innovation-friendly crypto hub.
Japan’s government is viewing blockchain as a “pillar of its digital transformation strategy,” stated Maarten Henskens, chief operating officer at Startale Group and head of Astar Foundation.
“A more lenient monetary policy under the new leadership could sustain liquidity and invigorate investor interest in alternative assets, including cryptocurrencies,” Henskens remarked to Cointelegraph.
“At Startale and Astar, we view this as a solid opportunity 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 highlighted a significant flaw in leading decentralized blockchains: their reliance on centralized internet providers, which are susceptible to government intervention and technical failures.
The country experienced a near-total internet shutdown lasting roughly 48 hours prior to the restoration of connectivity on Oct. 1, according to Reuters report. The disruption was allegedly ordered by the Taliban administration; however, officials later attributed it to “technical issues” related to fiber optic cables.
While blockchains aim to establish a public, censorship-resistant network for value transfers, their dependence on centralized internet providers complicates these objectives during outages.
“The Afghanistan blackout transcends 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 dominated by a few centralized providers, the promise of blockchain can evaporate overnight,” he added.
The nationwide internet and mobile data services outage impacted around 13 million citizens, based on a September report by ABC News. This marked the first nationwide internet shutdown under the Taliban regime, following prior regional restrictions imposed in September to mitigate online activities deemed “immoral.”
The Taliban denied imposing the ban, attributing the outage to technical issues, including problems with fiber optic cables.
Iran has also been grappling with internet censorship since the onset of its conflict with Israel.
The Iranian government imposed an internet shutdown for 13 days in June, permitting access only to domestic messaging apps, leading Iranians to seek hidden internet proxy links for temporary access, as reported by The Guardian on June 25.
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$10 billion in Ethereum awaits exit as validator withdrawals surge
Ethereum experienced its largest validator exit on record this week, with over 2.4 million Ether valued at over $10 billion awaiting withdrawal from its proof-of-stake network, although institutional participants are replacing much of this in the validator entry queue.
Ethereum’s exit queue surpassed 2.4 million Ether worth over $10 billion on Wednesday. This surge in exits extended the validator queue time to over 41 days and 21 hours, according to blockchain data from ValidatorQueue.com.
Validators play a crucial role in the Ethereum network by adding new blocks and verifying transactions.
“Significant withdrawals often indicate that tokens may be sold, but this does not necessarily mean actual token sales,” noted Nicolai Sondergaard, a research analyst at crypto intelligence platform Nansen, adding that “there’s no need for alarm from this alone.”
While the $10 billion withdrawal queue is notable, validators are likely “consolidating from 32 ETH to 2,048 ETH stakes for enhanced operational efficiency,” stated Marcin Kazmierczak, co-founder of blockchain oracle company RedStone.
This involves increasing inflows into liquid staking protocols to improve “capital efficiency,” he told Cointelegraph, adding:
“A significant portion of withdrawn ETH is redeployed within DeFi, not sold.”
“The 44+ day withdrawal wait time acts as a natural throttle, preventing supply shocks,” he explained, emphasizing that Ether’s daily trading volume of $50 billion remains five times greater than the validator queue.
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DeFi market overview
As per data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization concluded the week positively.
The privacy-focused Zcash (ZEC) token surged over 68%, securing the title of the week’s biggest gainer within the top 100 for the second consecutive week. The Mantle (MNT) token gained over 18%, marking the week’s second-best performance.
Thank you for reviewing our summary of this week’s most impactful DeFi developments. Join us next Friday for additional stories, insights, and educational content regarding this rapidly evolving space.
