Government Shutdown Creates Economic Instability
October began with a significant shock to the U.S. economy. On October 1, 2025, the federal government entered a shutdown after Congress failed to reach an agreement on a new budget. This resulted in hundreds of thousands of federal employees being furloughed, and many government agencies experiencing slowdowns or complete halts in their operations. Consequently, crucial economic data, such as labor reports and inflation figures, ceased to be released.
The absence of this vital information exacerbated existing uncertainty. The Federal Reserve found itself making critical decisions without access to current data, while investors grew increasingly apprehensive about the unfolding situation. The shutdown also had a direct negative impact on the economy, costing billions of dollars weekly, reducing consumer spending, and increasing the risk of job losses due to the slowdown in government expenditures.
As cryptocurrencies, particularly Bitcoin, become more intertwined with the U.S. financial market, these economic uncertainties have a swift effect on digital assets. The government shutdown introduced additional pressure on risk assets, ultimately contributing to a decline in cryptocurrency prices. As long as the shutdown persists, it is expected to remain a central topic in economic and policy discussions, with its influence on the market likely to intensify.
Once the government reopens, a short-term sense of relief is anticipated across various markets. However, a lack of clear progress on cryptocurrency regulation could potentially limit the extent of any recovery. Should the currently overvalued S&P 500 enter a correction phase, it is plausible that cryptocurrencies might also experience sideways movement or a moderate downturn in response.
Bitcoin's Seven-Year "Uptober" Streak Broken
October, traditionally a month of strong performance for Bitcoin, concluded with its first negative showing in seven years. Several factors contributed to this shift. Firstly, Bitcoin had experienced a sustained period of growth in the preceding months, steadily increasing from April onwards with only a minor pause in August. Following such a robust rally, the market naturally required a phase of consolidation.
A more immediate cause was the shutdown of the U.S. federal government, which generated widespread market uncertainty. The repercussions became particularly evident at the beginning of November, when the prolonged shutdown and the delay in economic data releases triggered a renewed wave of risk aversion, placing additional strain on Bitcoin and the broader cryptocurrency market.
The past month served as further confirmation that Bitcoin's price dynamics are increasingly correlated with the global financial system. Its sharp reaction to the U.S. government shutdown clearly demonstrated this connection. As a higher-risk asset, Bitcoin experienced more pronounced and volatile movements than traditional markets, amplifying the effects of macroeconomic uncertainty.
Looking ahead, Bitcoin's price movements appear to be closely linked to the performance of the U.S. economy, the trajectory of the stock market, and any future developments in cryptocurrency regulation. As global liquidity conditions and shifts in U.S. policy evolve, Bitcoin is likely to mirror these changes even more directly, behaving less like an isolated digital asset and more like a volatile component of the broader financial cycle.
Ethereum Experiences Sharper Decline Amid Regulatory Uncertainty
Ethereum, being a more risk-sensitive asset compared to Bitcoin, witnessed a more pronounced decline and exhibited greater volatility throughout the month. Over the past two years, Ethereum's price behavior has been characterized by extremes, either following a gradual downward trend or experiencing abrupt monthly surges of 40% or more.
Historically, these significant price rallies have almost invariably coincided with major catalysts, such as anticipation of an ETF approval, the outcome of an election, or the passage of key legislation. At this juncture, regulatory developments remain the primary determinant of Ethereum's price outlook. Any substantial policy decision, particularly concerning institutional access or the classification of digital assets, is likely to shape the direction of its next major price trend.
The State of Blockchains
BNB Chain Leads in Active Addresses
October marked the most successful month for BNB Chain this year. Network fees reached $70.7 million, the highest figure recorded since January 2022. The chain also led in October by the number of active addresses, reaching 58.3 million users. It recorded $119 billion in Decentralized Exchange (DEX) volume, the highest since October 2021, and set a new record in perpetual futures trading at $16.8 billion.
The surge in activity was primarily driven by perpetual futures trading, largely fueled by Aster, a perpetual DEX that attracted thousands of traders to BNB Chain. As users engaged in farming the Aster airdrop, the network's key metrics saw a significant increase.
This influx of liquidity revitalized the memecoin sector. The launchpad for four.meme generated $44 million in fees, surpassing its total historical revenue. Numerous previously overlooked tokens reached new all-time highs, while new contenders emerged. By the end of the month, the memecoin hype began to cool, but overall network activity remained close to its peak levels.
Solana is the Top Chain by DEX Volume
October presented a mixed picture for Solana. Network fees decreased to $27.7 million, the lowest level since March. Active addresses fell to 37.7 million, a figure significantly below the peak activity observed a year ago.
On a positive note, total transactions increased by 3% month-over-month, and DEX volume reached $149 million, the highest since February and the leading volume among all chains. Humidify emerged as the top DEX by volume, surpassing Meteora, Raydium, and Orca.
Memecoin activity was minimal this year as traders shifted their focus to other chains (Base, BNB Chain) and sectors such as perpetual futures trading and prediction markets. Pump.fun solidified its dominance as Solana's primary launchpad, now holding a 90-95% market share in terms of volume, token launches, and active users.
Meanwhile, an increase in sandwich attacks raised concerns within the community. Approximately 400,000 attacks were recorded in October, affecting 200,000 users and resulting in nearly 20,000 SOL in losses. Jito subsequently banned 15 validators implicated in these attacks, but the impact of these measures has been limited thus far.
The month also saw the launch of the Solana ETF by Bitmine, which attracted $199 million in inflows. However, this had a minimal effect on SOL's price, with the token closing October down 10% overall.
Base Memecoin Activity Grows
Base demonstrated strong performance in October. The network's Total Value Locked (TVL) surpassed $10 billion for the first time, while its stablecoin market capitalization reached $4.63 billion. Network fees climbed to $9.9 million, the highest since January, and DEX volume achieved a new all-time high of $55 billion. Total transactions saw a 5% month-over-month dip but remained near record levels. However, active addresses declined by 8%, approaching their 2025 low.
Memecoin activity surged across the network. With 1.19 million new tokens created, Base became the leading chain for token launches, surpassing both Solana and BNB Chain. Clanker, a native token launch tool on Base, generated $4.8 million in fees, marking its second-best result to date. Despite the increased attention, most major Base memecoins experienced price drops exceeding 30%.
Speculation surrounding the potential launch of a BASE token continued throughout October. While the Base team confirmed they are exploring tokenization, no official roadmap has been disclosed. JPMorgan has forecasted that the upcoming Base token could achieve a market capitalization of $34 billion, citing a twofold increase in DeFi TVL over the past year and projecting up to $23 billion in new liquidity if an airdrop and token launch occur.
Avalanche Hits Highest Transactions Count Since 2023
In October, the Avalanche network recorded its highest monthly fees of 2025 at $1.64 million. The number of transactions reached 61.5 million, the highest level observed since 2023. Concurrently, active addresses decreased by approximately 10%, and TVL declined by about 15%.
In ecosystem news, Visa enabled payments in four different stablecoins on Avalanche. BlackRock's BUIDL fund added $500 million in Real-World Assets (RWAs), making Avalanche its second-largest chain after Ethereum. Additionally, Avalanche Treasury Co. announced a $675 million merger with Mountain Lake Acquisition Corp. to form a publicly listed vehicle for AVAX exposure, with plans to list on Nasdaq in Q1 2026, pending regulatory approval.
Altcoin Performers
ZEC experienced a surge in institutional interest following Grayscale's announcement of a Zcash Trust targeted at accredited U.S. investors. With privacy coins regaining attention, investors turned to ZEC as an alternative to public chains. Consequently, the token saw a price increase of over 200% in October.
COAI jumped by more than 300% after its listing on Aster, which unlocked liquidity and provided exposure to thousands of new traders. However, this rally was largely speculation-driven, fueled by social media hype and momentum surrounding the AI narrative rather than fundamental factors. The token is currently valued at a $300 million market capitalization.
DASH became another beneficiary of the privacy trend, breaking out of a five-year downtrend and attracting traders who had been anticipating a reversal. Technical upgrades contributed to market optimism. The token is now trading at its highest level since 2023.
H (Humanity Protocol) experienced a significant surge of 153% in a single day on October 14, following indications of whale accumulation. The rally was supported by the project's expansion within the Sui ecosystem and its increasing role in decentralized biometric identification solutions. However, the token later pulled back approximately 30% from its newly established all-time high.
TAO gained 59% in October, distinguishing itself among large-cap tokens. This surge was attributed to growing institutional interest and the launch of the world's first staked Bittensor Exchange-Traded Product (ETP) by Deutsche Digital Assets and Safello.
DeFi Overview: Aave, Ethena, Pendle
Aave
Aave demonstrated strong resilience during a significant market-wide stress event, automatically managing $180 million in liquidations with no downtime or user disruption. This highlights the robustness of its automated risk management system. The protocol continued to attract institutional-scale users and deepen its integrations, serving as a critical liquidity source and collateral platform for the expanding initiatives of both Ethena and Pendle.
After reaching an all-time high TVL of $76 billion, Aave's TVL retracted to $63 billion following a broader market correction. For the first time ever, Aave generated over $100 million in monthly fees, totaling $102.6 million. The upcoming V4 mainnet, scheduled for late Q4 2025, is expected to further solidify Aave's position as the leading decentralized finance (DeFi) lending protocol.
Ethena
Ethena underwent a major stress test in October when USDe briefly lost its peg on Binance due to an external oracle malfunction. The peg was rapidly restored, but the circulating supply decreased from 15 billion to 9 billion over the month. Later, during a broader market downturn and significant liquidations, Ethena successfully managed another stress event—its mint and redeem functions operated without interruption, processing $2 billion in redemptions within a 24-hour period.
The protocol expanded its integrations, launching deeper collaborations with major DeFi money markets such as Aave and Pendle to diversify collateral and enhance cross-protocol liquidity. Additionally, Ethena introduced JupUSD, the native stablecoin of the Jupiter ecosystem, built on its Stablecoin-as-a-Service framework. The project also transitioned the USDtb smart contract to Anchorage Digital, making it the first federally regulated stablecoin issued under the GENIUS Act.
Pendle
Pendle launched new "Agentic DeFi" strategies in collaboration with Giza Tech (Pulse), INFINIT Labs (Plasma), AFI Protocol, and Symphony, introducing advanced automated yield products. Institutional recognition also grew, evidenced by the launch of the Pendle ETP on the SIX Swiss Exchange by 21Shares—a significant step towards bridging DeFi yields with traditional finance. Pendle's new Boros product for trading funding rates on centralized and decentralized exchanges reached $2.83 billion in trading volume and $4.7 billion in open interest within three months.
Perp DEX Wars
The competition among major perpetual decentralized exchanges (DEXs) has intensified with the emergence of new players gaining traction. The sector has evolved from Hyperliquid's dominance to a highly competitive landscape.
Hyperliquid still led in October by trading volume at $308 billion, but rivals are closely following. Lighter finished October in second place with $272 billion, followed by Aster with $260 billion. Notably, during the last week of October, both Lighter and Aster surpassed Hyperliquid as its volumes dropped to July lows. However, with $9 billion in open interest, Hyperliquid remains unmatched, exceeding the combined total of all other players. Both Hyperliquid and Aster also ranked among the top 10 projects by monthly fees.
The market crash in October served as a stress test, demonstrating Hyperliquid's robust infrastructure, which remained fully operational during mass liquidations. Lighter and Aster experienced rapid growth, but their long-term sustainability remains to be seen, as they rely on incentivized traffic (both have points programs, while Hyperliquid does not).
Prediction Markets: Polymarket vs Kalshi
In October, prediction markets emerged as the dominant narrative, capturing significant attention within the crypto community. The total monthly trading volume reached a new all-time high of $8.5 billion, surpassing the volume seen during the U.S. elections. The number of active traders also hit an all-time high of 478,000.
Polymarket is now focused on regulatory steps to legally expand its presence in the U.S. market. A significant announcement involved a $2 billion strategic funding round backed by Intercontinental Exchange (ICE), the parent company of the NYSE, at a valuation of $9 billion. Another major update was the confirmation of the POLY token launch scheduled for 2026, which will include an airdrop for active users. These developments generated considerable excitement within the crypto community and drove an increase in Polymarket's activity.
Kalshi also announced a new investment round in October—a $300 million Series D at a $5 billion valuation, led by Sequoia Capital and Andreessen Horowitz. To date, the project has raised a total of $565 million. Its recent partnership with Robinhood has been transformative, enabling users to trade NFL and college football markets directly through the brokerage. The "Sports" category now accounts for over 90% of Kalshi's trading volume. To diversify its offerings, the platform is expanding into Polymarket's territory, including cryptocurrency markets, and has onboarded prominent crypto influencers such as John Wang, ICO Beast, and 0xUltra.
Examining the numbers, Kalshi recorded $4.4 billion in volume compared to Polymarket's $4.1 billion. This gap is considerably smaller than in September, when Kalshi was the clear leader with $2.9 billion versus Polymarket's $1.6 billion. The majority of Kalshi's volume originates from sports markets, whereas Polymarket's volume is distributed across several categories: sports, politics, and culture. Kalshi also leads in transaction count, with 16 million transactions compared to Polymarket's 12 million. As of November 1, Polymarket has $200 million in open interest against Kalshi's $296 million.
Other prediction applications are unable to match the volumes demonstrated by these two platforms. Among newer launches, Opinion Labs, a prediction market supported by YZi Labs, is worth mentioning. Access is currently limited, so it is advisable to monitor for future updates.