The cryptocurrency market showed signs of consolidation in the second week of October, with investors still betting on a new round of "Uptober" rally to reach historical highs.
Another piece of news this week is that a whale holding $11 billion worth of Bitcoin (BTC) has transferred $360 million worth of Bitcoin again after a two-month pause, suggesting a possible shift towards the world's second-largest cryptocurrency, with $5 billion worth of Bitcoin still remaining in its wallet.
As another potential factor driving the Uptober rally, the U.S. Securities and Exchange Commission (SEC) received 31 applications for cryptocurrency exchange-traded funds (ETFs), 21 of which were submitted in the first eight days of October.
According to the SEC, it will operate under "adjusted conditions" before the appropriations bill is passed, with only "a very small number of employees" on duty.
According to CBS News, Democrats and Republicans failed to reach an agreement for the seventh time on Thursday, and the government shutdown will extend into next week, with the Senate set to leave Washington on Tuesday.
A whale who exchanged over $5 billion worth of Bitcoin for Ethereum (ETH) two months ago returned to the crypto market this week, transferring $360 million worth of Bitcoin again.
According to blockchain data platform Arkham, the whale's address transferred $360 million worth of Bitcoin to the hot wallet "bc1pd" of the decentralized finance (DeFi) protocol Hyperunit on Tuesday. This marks its first transfer in two months.
Based on the whale's trading pattern, this transfer may indicate a renewed interest in Ethereum.
As reported by Cointelegraph on September 1, this whale holding $11 billion worth of Bitcoin had exchanged about $5 billion worth of Bitcoin for Ethereum two months ago, briefly surpassing the second-largest corporate treasury, Sharplink, to become the second-largest holder of Ethereum.
As of Wednesday, the whale's main wallet still holds over $5 billion worth of Bitcoin, indicating that there may still be further selling pressure on the world's first cryptocurrency.
On August 21, this Bitcoin whale began transferring funds into Ethereum, exchanging $2.59 billion worth of Bitcoin for $2.2 billion worth of spot Ethereum and $577 million worth of long positions in Ethereum perpetual contracts.
According to the latest data from DappRadar, the decentralized application (DApp) industry showed a mixed performance in the third quarter of 2025, with DeFi liquidity reaching an all-time high, while user activity saw a significant decline.
A report sent by DappRadar to Cointelegraph indicated that the average daily unique active wallets in the third quarter were 18.7 million, down 22.4% from the second quarter. Meanwhile, the total value locked (TVL) in DeFi protocols reached $237 billion, the highest ever in the field.
The report pointed out that institutional funds continue to flow into blockchain financial platforms, while retail user participation in DApps is declining. Despite record DeFi liquidity, overall activity lags behind, indicating weakened retail participation.
"Throughout the quarter, active wallets across all categories saw a decline, with the main impact concentrated in the social and AI sectors," DappRadar wrote. DApps focused on AI lost over 1.7 million users, dropping from 4.8 million in the second quarter to 3.1 million in the third quarter; SocialFi DApps fell from 3.8 million to 1.5 million.
Japan's newly elected Prime Minister Sanae Takaichi may push for more "optimized" regulations to support the country's cryptocurrency economy, potentially becoming a new hub for global crypto companies.
Sanae Takaichi was elected as the leader of the Liberal Democratic Party (LDP) on Saturday and will take office on October 15, becoming Japan's first female prime minister.
Experts say her leadership could bring a more open attitude towards technological innovation, including blockchain innovation, while maintaining Japan's rigorous regulatory standards.
According to Elisenda Fabrega, Chief Legal Officer of the tokenization platform Brickken, Takaichi's election could have a "substantial impact" on the country's perception and governance of digital assets.
Fabrega told Cointelegraph that Takaichi has previously expressed support for "technological sovereignty" in public forums, mentioning "strategic development of digital infrastructure, including blockchain technology." "From a legal perspective, this means her government may adopt a stance that is not only tolerant but also actively promotes the digital economy."
Fabrega added that Takaichi's political positioning may strengthen "Japan's commitment to legal certainty in the crypto space" and reignite market interest in its role as an innovation-friendly crypto hub.
Maarten Henskens, COO of Startale Group and head of Astar Foundation, stated that the Japanese government is viewing blockchain as "a pillar of digital transformation strategy."
Henskens told Cointelegraph, "A more relaxed monetary policy under new leadership is expected to maintain liquidity and enhance investor interest in alternative assets, including cryptocurrencies."
"At Startale and Astar, we believe this creates a favorable environment for the continued development of Japan's Web3 ecosystem," he added.
Afghanistan recently experienced a nationwide internet blackout, exposing a critical vulnerability of mainstream decentralized blockchains that rely on centralized network providers, which are susceptible to government intervention and technical failures.
According to Reuters, the country experienced a near-nationwide internet blackout lasting about 48 hours, restoring connectivity on October 1. The outage was reportedly ordered by the Taliban government, which later attributed the cause to "fiber optic technology failure."
Although blockchains are designed to provide users with a public, censorship-resistant value transfer network, reliance on centralized network providers makes it difficult for them to function during outages.
According to Michail Angelov, co-founder of the decentralized WiFi platform Roam Network, "The blackout in Afghanistan is not just a regional connectivity crisis, but a wake-up call." He added, "When connectivity is monopolized by a few centralized providers, the promises of blockchain can collapse in an instant."
According to ABC News in September, the nationwide disruption of internet and mobile data services affected about 13 million citizens. This was the first nationwide blackout since the Taliban took power, following previous restrictions in September in some areas to curb what were deemed "immoral" online activities.
The Taliban denied the ban, claiming the blackout was due to technical issues, including fiber line failures.
Since the outbreak of conflict with Israel, Iran has also faced issues with internet censorship.
According to The Guardian on June 25, the Iranian government shut down the internet for 13 days in June, retaining only local messaging applications, prompting the Iranian public to seek hidden proxy links for temporary internet access.
Ethereum experienced the largest-ever exit of validators this week, with over 2.4 million Ethereum, worth over $10 billion, waiting to be withdrawn from the proof-of-stake network, but institutional participants are significantly replenishing the validator queue.
The Ethereum exit queue surpassed 2.4 million on Wednesday, worth over $10 billion. According to ValidatorQueue.com, this surge in exits has extended the waiting time for the validator queue to 41 days and 21 hours.
Validators are responsible for adding new blocks and verifying transactions in the Ethereum network, making them a key component of its operation.
Nicolai Sondergaard, a research analyst at the crypto intelligence platform Nansen, stated, "Large withdrawals mean that tokens may be sold, but it does not necessarily equate to a sell-off." He added, "There is no need to worry based solely on this."
Marcin Kazmierczak, co-founder of the RedStone blockchain oracle company, pointed out that despite the massive $10 billion withdrawal queue, validators are likely just "merging 32 Ethereum into 2048 Ethereum to improve operational efficiency."
He added to Cointelegraph that this includes inflows into liquid staking platforms to enhance "capital efficiency":
He explained that with Ethereum's daily trading volume reaching $50 billion, it remains five times the size of the validator queue.
According to data from Cointelegraph Markets Pro and TradingView, most of the top 100 cryptocurrencies by market capitalization saw gains this week.
The privacy token Zcash (ZEC) was the biggest gainer among the top 100 for the second consecutive week, rising over 68%; Mantle (MNT) performed second this week, with an increase of over 18%.
Thank you for reading this week's most impactful DeFi dynamics summary. We look forward to seeing you next Friday, as we continue to bring you the latest industry updates, in-depth insights, and educational content to help you navigate this rapidly evolving field.
Related: Crypto Biz: Bitcoin (BTC) reaches a corporate moment, ICE makes bold moves, Tether continues to expand its territory
Original: “Finance Redefined: DeFi Booms, Bitcoin (BTC) Whale Sparks 'Uptober' Rally Hopes”
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