The decentralized finance (DeFi) landscape just entered a defining phase. According to Sentora’s latest report, on-chain perpetual futures (perps) trading volume has surpassed $1 trillion in October 2025, a historic milestone that coincides with the Federal Reserve’s second rate cut of the year.
The intersection of these two trends, lower rates and surging on-chain leverage, is transforming how liquidity, risk, and price discovery function across the crypto ecosystem.
Fed Cuts Rates Again, But Crypto’s Response Is Muted
On October 29, 2025, the FOMC lowered policy rates by 25 basis points to a range of 3.75%–4.00%, following its September pivot. While such moves once ignited sharp risk-on rallies, the latest cut produced a more cautious reaction.
- •Bitcoin (BTC) dropped ~3.3% day-over-day, briefly slipping below $109,000.
- •The total crypto market cap fell back under $4 trillion.
Analysts from Sentora noted that “crypto tends to react to surprise policy shifts, not predictable ones.” With the October move largely priced in, Chair Powell’s remarks, emphasizing uncertainty over further easing in December, dampened enthusiasm.
This dynamic follows a historical pattern: the first rate cut in a policy cycle often delivers the strongest upside impulse, while subsequent ones see diminishing returns. The muted reaction also reflects today’s thinner centralized exchange liquidity and the migration of leverage toward decentralized venues.
Bitcoin and Ethereum Flows Confirm Accumulation
Despite the macro wobble, exchange data remains strongly bullish.
- •Bitcoin exchange netflows recorded -$2.06 billion in outflows last week, one of the largest on record, as investors moved coins into self-custody wallets.
- •Ethereum followed with -$642.7 million in outflows, reinforcing the accumulation trend.
Meanwhile, network fees cooled slightly, signaling reduced on-chain congestion:
- •Bitcoin’s fees fell -8.6% to $2.03 million.
- •Ethereum’s fees dropped -13.2% to $5.05 million, though it continues to lead as the top hub for on-chain activity.
Perpetuals Hit $1.3 Trillion: The New Engine of DeFi
For the first time ever, on-chain perpetual contracts cleared $1 trillion in monthly trading volume, with open interest nearing $18 billion, according to DeFiLlama. Sentora’s analysis describes this as a “structural step-change”, perps are no longer a niche, but the center of gravity for crypto leverage.
What’s driving the surge:
- •Venue diversification: As centralized exchanges reduced risk exposure and market-making depth, liquidity migrated to on-chain alternatives.
- •Capital efficiency: Lower rates have reduced the opportunity cost of leverage, making perps more attractive than fully-funded spot positions.
- •Protocol maturity: Risk management across major perps venues, from oracles to liquidation systems, has improved, tightening spreads and boosting throughput.
This structural evolution means that macro events now transmit directly through perps funding and open interest, not just through spot prices.
The Bigger Picture: Fed Cuts Meet On-Chain Reflexivity
The Fed’s cautious easing posture and DeFi’s trillion-dollar milestone mark a turning point. Lower front-end rates reduce funding costs, but the liquidity engine of crypto has shifted permanently on-chain. As a result, headlines from the Fed now ripple through funding rates rather than order books.
Sentora’s conclusion is clear:
“The Fed cut again, but the signal was caution, not a green light. Yet, as perps cross $1 trillion in monthly volume, leverage and liquidity are now dictated on-chain, and the next macro shock will hit there first.”
DeFi’s trillion-dollar month signals that the epicenter of crypto market structure has moved, with perps now defining how every Fed decision echoes through the digital asset economy.