Cryptocurrency markets showed signs of consolidation in the second week of October, even as investors continued to bet on another “Uptober” surge to novel highs.
Also in the news this week was the $11 billion Bitcoin (BTC) whale, which returned from a two-month hiatus to pour another $360 million in BTC, signaling a potential shift into the world’s second-largest cryptocurrency, with an additional $5 billion in the wallet.
Another potential catalyst for Uptober was that the U.S. Securities and Exchange Commission (SEC) received 31 cryptocurrency ETF (ETF) applications, 21 of which were filed in the first eight days of October.
However, the ongoing government shutdown could ponderous regulators’ response to these requests, as the SEC said it will operate “under modified conditions” with a “very limited number of employees” until the funding bill is passed.
As Democrats and Republicans failed to reach an agreement for the seventh time on Thursday, the government shutdown will extend into next week as the Senate leaves town by Tuesday, CBS News reported.
$11 Billion Bitcoin Whale Returns with $360 Million BTC Transfer After Two Months
The Bitcoin whale, which held about $11 billion in BTC before swapping over $5 billion for Ether (ETH) two months ago, has returned to the cryptocurrency market with another $360 million Bitcoin transfer.
The whale address transferred $360 million worth of Bitcoin to the decentralized finance (DeFi) protocol of Hyperunit’s scorching wallet “bc1pd” on Tuesday. This marked their first transfer in two months, According to to the Arkham blockchain data platform.
The transfer could signal another rotation into the ether, based on the whale’s trading patterns.
The $11 billion bitcoin whale surfaced two months ago and swapped about $5 billion worth of BTC for Ether, briefly overtaking the second-largest corporate treasury firm, Sharplink, in terms of total ETH holdings, Cointelegraph reported on September 1.
As of Wednesday, the whale still held more than $5 billion worth of Bitcoin in its main wallet, signaling more potential selling pressure for the world’s first cryptocurrency.
The Bitcoin whale began turning its funds into Ether on August 21, when it sold $2.59 billion worth of BTC for $2.2 billion of spot Ether and $577 million of perpetual long Ether.
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DeFi TVL Hits Record $237 Billion as Daily Lively Wallets Drops 22% in Q3: DappRadar
The decentralized application (DApp) industry ended the third quarter of 2025 with mixed results as decentralized finance (DeFi) liquidity surged to record levels and user activity plummeted, according to novel data from DappRadar.
In a report submitted to Cointelegraph DappRadar he said that in the third quarter, the number of unique vigorous wallets per day averaged 18.7 million, a decline of 22.4% compared to the second quarter. Meanwhile, DeFi protocols have collectively secured $237 billion, which is the highest total value locked (TVL) ever recorded in the space.
The report highlights the continuing disconnect between institutional capital flowing into blockchain-based financial platforms and retail user engagement with DApps. Although DeFi TVL reached record levels of liquidity, overall activity was lower, suggesting weaker participation from the retail sector.
“Looking at the full quarter, every category saw a decline in active wallets, but the impact was most felt in the Social and AI categories,” DappRadar wrote. AI-centric DApps lost more than 1.7 million users, from an average daily number of 4.8 million in the second quarter to 3.1 million in the third quarter, while SocialFi DApps increased from 3.8 million to 1.5 million in the third quarter.
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Japan’s novel prime minister may stimulate the cryptocurrency economy and “improve” blockchain regulations
Japan’s newly elected Prime Minister Sanae Takaichi may open the door to more “sophisticated” regulations to boost the country’s cryptocurrency economy, which could become the next global hub for crypto companies.
Takaichi was elected leader of the Liberal Democratic Party (LDP) on Saturday, and is expected to become Japan’s first female prime minister when she takes office on October 15.
Experts say her leadership could usher in a more open attitude toward technology experimentation, including blockchain innovation, while maintaining strict Japanese regulatory standards.
According to Elisenda Fabrega, general counsel of tokenization platform Brickken, Takaichi’s election could have a “significant impact on the perception and management of digital assets in the country.”
In previous public positions, Takichi has expressed support for “technological sovereignty,” mentioning the “strategic development of digital infrastructure, including blockchain technology,” Fabrega told Cointelegraph. “Legally, this suggests that her administration can adopt a posture that is not only liberal but potentially proactive in promoting the digital economy.”
Fabrega added that Takaichi’s political position could strengthen Japan’s “commitment to legal certainty in the crypto space” and renew interest in the country as an innovation-friendly cryptocurrency hub.
The Japanese government considers blockchain a “pillar of its digital transformation strategy,” said Maarten Henskens, chief operating officer at Startale Group and head of the Astar Foundation.
“A softer monetary outlook under new leadership could maintain liquidity and increase investor appetite for alternative assets, including cryptocurrencies,” Henskens told Cointelegraph.
“We at Startale and Astar see this as a strong environment for further development of the Japanese Web3 ecosystem,” he added.
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Internet failure in Afghanistan “wake-up call” for blockchain decentralization
The recent nationwide internet outage in Afghanistan highlighted a critical weakness of the world’s leading decentralized blockchains: their dependence on centralized internet providers, which remain vulnerable to government intervention and technical failures.
The country experienced a near-total Internet shutdown that lasted about 48 hours before connectivity was restored on October 1, Reuters reported. The Taliban administration reportedly ordered disruptions, although officials later blamed “technical problems” with fiber optic cables.
While blockchains aim to provide people with a public, censorship-resistant network for transferring value, their dependence on centralized internet providers makes these operate cases challenging in the event of downtime.
“The outage in Afghanistan is not just a regional connectivity crisis: it is a wake-up call,” said Michail Angelov, co-founder of the decentralized Wi-Fi platform Roam Network. “When connectivity becomes monopolized by a handful of centralized providers, the promise of blockchain could collapse overnight,” he added.
According to a September report, the nationwide interruption of internet and mobile data services affected approximately 13 million citizens report from ABC News. It was the first nationwide internet shutdown under the Taliban, following regional restrictions imposed earlier in September to curb online activities deemed “immoral”.
The Taliban has denied the ban, blaming the internet outages on technical issues, including problems with fiber-optic cables.
Since the beginning of the conflict with Israel, Iran has also been struggling with Internet censorship problems.
In June, the Iranian government shut down internet access for 13 days except for domestic messaging apps, prompting Iranians to seek hidden internet proxy links to gain transient access, The Guardian reported June 25.
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$10 billion in Ethereum awaits exit as validator payouts escalate
Ethereum saw its largest-ever exit from a validator this week, with over 2.4 million Ether worth over $10 billion waiting to be withdrawn from the proof-of-stake network, but institutional participants are replacing most of them in the queue to enter the validator.
On Wednesday, Ethereum’s exit queue exceeded 2.4 million Ether, worth over $10 billion. The edged escalate in the number of exits extended the queue time to the validator to over 41 days and 21 hours, According to to blockchain data from ValidatorQueue.com.
Validators are responsible for adding novel blocks and verifying transactions on the Ethereum network, playing a key role in its operation.
“Large payouts always mean there is a chance for token sales, but it doesn’t necessarily equate to token sales,” said Nicolai Sondergaard, a research analyst at crypto intelligence platform Nansen, adding that there is “no reason to be concerned about this.”
While the $10 billion payout queue is significant, validators are most likely “consolidating between 32 ETH and 2,048 ETH rates to increase operational efficiency,” according to Marcin Kaźmierczak, co-founder of Oracle blockchain-based RedStone.
This includes growing inflows into liquid staking protocols to improve “capital efficiency,” Cointelegraph said, adding:
“Much of the withdrawn ETH is moved in DeFi, not sold.”
“The 44-plus day waiting time for withdrawal creates a natural limiting factor for supply shocks,” he explained, adding that Ether’s daily volume of $50 billion is still five times larger than the validator queue.
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DeFi market overview
According to data from Cointelegraph Markets Pro and TradingView, most of the top 100 cryptocurrencies by market capitalization ended the week in the green.
The privacy-protecting token Zcash (ZEC) surged more than 68% and became the top 100 gainer of the week for the second week in a row. Mantle token (MNT) rose over 18%, the second best result of the week.
Thank you for reading our roundup of the most crucial events in DeFi this week. Join us this Friday for more stories, insights and education about this active space.
