HashKey Capital Monthly Insights Report: October 2025

Overall Market Performance

October marked the start of the longest period of US government shutdown in history, with the shutdown continuing into November. Geopolitical tensions also flared up between US and China over rare earth controls, causing gold prices to rise to its highest level on October 17. On the policy front, the Fed has issued its second rate cut of the year and promised to end quantitative tightening in December, although its hawkish tone towards a definitive rate cut in December, kept market euphoria at bay. Market expectations for a rate cut in December has now fallen from 82% to ~67% as of the time of writing with 1/3 expecting rates to stay unchanged. These confluence of factors have led to a divergence in performance between equities and crypto markets.

On the back of strong earnings growth, the constructive meeting between Donald Trump and Xi Jin Ping have also lifted market sentiment. China has agreed to resume soybean purchases and keep rare earth export flowing while the US has reduced its tariff on Chinese goods from 57% to 47%, providing market relief for the time being. Brushing aside geopolitical tension, U.S equities hit all-time highs in October, led by strong demand for AI infrastructure and solid performance in large-cap growth stocks and the “Magnificient 7”. S&P 500, Nasdaq 100, and Dow Jones Industrials recorded MoM gains of 2.3%, 4.8%, 2.6% respectively.

While the equities market notched new highs, crypto market reacted negatively against the backdrop of rising geopolitical tension, erasing more than $19B in a day, marking the largest liquidation event in crypto’s history. Sentiments turned sour as the Fear and Greed index fell into ‘Fear’ territory. Bitcoin ended the month in the red, while Gold has stood the test of time as a safe haven, recording positive gains in October and outperforming it on a YTD basis as well.

Overall, market capitalization of the industry has fallen from ~$3.9T to ~$3.69T. Notwithstanding declines in market performance, product launches remain active with the first spot SOL staking ETFs by Bitwise and Grayscale launched during the last week of the month and cumulatively brought in more than $500M in AUM. Hong Kong has also approved the launch of its first spot SOL ETF issued by ChinaAMC. Other altcoin ETFs like HBAR, LTC have also been introduced despite government shutdown, due to a more streamlined listing procedures for asset issuers.

Bitcoin

In October, Bitcoin broke its 7 years streak of ‘Uptober’ by recording a MoM decline of ~5% despite continued institutional inflows and breaking record highs earlier in the month. While institutional flows remained robust, the source of inflows weighed heavily towards ETFs. Spot Bitcoin ETFs brought in $3.43B while digital asset treasuries’ BTC holdings remained relatively unchanged. After a period of rapid accumulation thus far this year, Bitcoin treasuries are now deploying share buyback schemes. One notable example is Metaplanet, which announced a $500M BTC-backed loan to buyback shares, increase Bitcoin/share and boost its mNAV. Although broader equity markets have advanced, Bitcoin’s correlation with equities has fallen to near zero, indicating that its price action is no longer moving in tandem and is not benefiting from the same catalysts driving equity market gains.

Ethereum and L2s

Ethereum price slumped in October, recording a MoM decline of 7.21% despite ETF inflows of $564.9M and Ethereum treasury companies holding more than 5M ETH.

Performance Metrics of Ethereum

Despite the decline in daily active addresses which led to a decline in TVL and monthly transactions, larger average transactions supported the ecosystem. Overall average transaction size increased from $72.5K to $93.4K. Average stablecoin transaction size also mirrors growth in overall average transaction size. BUIDL’s average transaction increased from $6.2M to $52.1M, while other stablecoins like USYC, USDS also saw average transaction size grow. Consequently, DEX trading volume and stablecoin transfer volume hit all-time highs, fuelling a 15.32% MoM increase in network fees. Looking beyond the disappointing price performance, fundamentals on Ethereum painted a more neutral outlook. With the upcoming Fusaka Upgrade set for December 3, this could further stimulate activity on mainnet, encourage the deployment of break-out consumer applications, and bolster network growth.

L2s Performance Metrics

L2s processed the highest monthly transactions in history, reaching 788.9M, representing a 3.66% MoM growth. TPS across all L2s have also increased significantly from 220 to more than 3,000 in October, demonstrating the value of L2s in delivering fast, low cost transactions while being secured by Ethereum. Despite a decline in monthly active users, L2s’ low fees and high throughput have driven monthly transaction count to an all-time high, with application revenue on L2s exceeding $230M. This is mainly attributed to surging DEX and perp DEX volumes on Base, Arbitrum, and zkLighter. While rent paid to L1 has significantly came down due to Pectra Upgrade in May, rent paid in October stands at its highest level since the upgrade, underscoring how activity on L2s can still accrue value to Ethereum.

Other notable ecosystem development news:

• Ethereal DEX on Abitrum now live on mainnet alpha.

• Ethereum Foundation deployed 2,400 ETH into a yield-bearing Morpho vault.

• Brevis announced Pico Prism, the state-of-the-art zkVM for Ethereum real-time proving. 99.6% of blocks proven under 12 seconds, 6.9s average with 64 RTX 5090 GPUs.

• The Ethereum Foundation announced a new privacy research “cluster” (private reads/writes, zkID, portable proofs, UX) on Oct 8, signaling core-ecosystem focus on default-private tooling.

• zkSync launched Atlas upgrades.

Solana

Solana Performance Metrics

Solana wasn’t spared from the downturn in October, erasing 10.3% in price and 6.45% in daily active users. However, TVL in SOL terms reached all-time highs as DATs deployed into staking pools and DoubleZero increased their SOL staked pool from 3,000 SOL to 13,000 SOL, contributing to more than 71M staked SOL at the end of October. Liquid staked dzSOL by Double Zero also became the third largest liquid staked SOL behind JitoSOL and bnSOL.

Stablecoin supply rose by 4.14% to a record $15.1B as daily active stablecoin users grew, consequently leading to a near-twofold increase in transfer volumes.

DEX volumes surged 43.75% MoM to $96.6B, surpassing Ethereum and BNB. A quietly launched AMM dark pool, HumidiFi, stole the spotlight with the highest DEX volume of $35.92B in October. Although Solana’s DEX trading levels are still distant from prior highs, its lending markets set a fresh record in October led by Jupiter and Fluid, surpassing $2.77B in total outstanding loans.

DeFi

DeFi infrastructure passed a significant stress test. During the liquidation cascade, leading DeFi venues cleared multi-billion-dollar flows without downtime, a stark contrast to prior cycles.

In derivatives, perp-DEX turnover set a record above $1.3T for the month, with leadership rotating among Hyperliquid, Lighter, and Aster. Others like ApeX, Pacifica, EdgeX also saw notable growth. Lighter’s public mainnet opened after an extended private beta and rapidly scaled TVL and volumes by offering zero maker/taker fees, while Aster continues to benefit from high leverage, BNB distribution, and ongoing incentive campaign. Hyperliquid, meanwhile, executed its rare ADL (auto-deleverage) mechanism as a last-resort backstop during the most acute dislocation, drawing public scrutiny but ultimately demonstrating how its liquidation waterfall — book liquidations, vault intervention (HLP), then ADL — contains systemic risk by isolating losses in child vaults. As competition among perpetual DEXs intensifies, Hyperliquid’s market share has declined, with platforms such as Aster and Lighter now reaching comparable levels. The race to lead will ultimately depend on factors such as fees, distribution, asset listings, and leverage design, underscoring the sensitivity of liquidity.

DEX volumes similarly break new highs with $614B in trading volume. Uniswap saw its trading volume reached a new record with more than $170B in monthly trading volume. HumidiFi also emerged as a leading DEX player on Solana with major DEX aggregators channeling significant volumes to it, overtaking Meteora to become the third largest DEX by volume behind PancakeSwap and Uniswap.

On the lending side, Maple and Aave announced their partnership to enhance yields through leverage looping strategies. SyrupUSDT has also been accepted as collateral on the Aave Plasma market, filling its $300M cap on Aave plasma within minutes on 30 October . SyrupUSDC has also witnessed its fair share of growth on Jupiter Lend as deposits on the platform rose from ~$127.7M to $164.6M, becoming the 3rd largest deposit asset. Overall, Maple saw its TVL increase from $4.3B to $5B after various DeFi integrations, multichain expansion, and DRIPs campaign, drawing in record revenue of $2.3M in October.

RWA

TVL of RWA sector

In October, tokenized RWAs grew 9.87% MoM to $35.61B. Most RWA segments expanded their TVL in October, with private credit and U.S. Treasuries remaining the dominant categories. At the same time, tokenized commodities and institutional fund products gained meaningful traction recording TVL growth of 39.25% and 23.11% respectively. Within Aave’s RWA market, Horizon, tokenized funds such as JTRSY, VBILL, JAAA, and USCC are being used as deposit collateral to unlock capital efficiency. Notably, Janus Henderson’s tokenized fund JAAA surpassed $1 billion in TVL, underscoring the growing institutional demand for tokenized funds. Tokenized gold soared in popularity with Tether Gold and Paxos Gold combined now having a higher market capitalization than Blackrock’s BUIDL. Tether’s XAUT rose from $1.44B to $2.11B driven by its multichain expansion to Solana, whale accumulation, and institutional adoption (eg. Aurelion’s $134M purchase for treasury). Transfer volume for these tokenized commodities mainly occur on Ethereum, generating an all-time high of $8.87B in October.

Tokenized Commodities Performance Metrics

In terms of RWA growth by network, most tokenized assets would call Ethereum their home. Solana’s footprint in tokenized securities is expanding rapidly, with its number of holders and transaction volume exceeding Ethereum’s by more than twofold. This divergence suggests a structural shift toward chains optimized for cost-efficient, high-frequency settlement.

Stablecoins

Stablecoins continued to anchor overall market activity, with total circulating supply surpassing $300B and monthly transaction volume surging to an all-time high of $3.9T, a 14.7% MoM increase. On Ethereum alone, stablecoin settlement hit a record ~$2.82T in October, up 45% MoM, led by USDC with nearly $1.62T and USDT just under $900B. The number of monthly active addresses and transaction count have also reached new highs. Solana recorded notable momentum, posting a 5.2% MoM expansion in stablecoin supply — largely propelled by PYUSD and USDG — and a corresponding 175% MoM increase in total transaction volume.

Among stablecoins, PYUSD and USDG were notable performers. USDG saw its supply ballooned 35.1% MoM after partnership with exchanges (Kraken) and DeFi venues like Jupiter Lend on which it currently has the highest yields among other stablecoins on the platform. PYUSD continues to benefit from Paypal’s strong distribution channel and institutional partnership. Ethena’s USDe, meanwhile saw signficant outflows of ~$5B after the 10 October market crash and a series of stablecoin depeg that led investors to flee to more conservative yield bearing stablecoins.

Institutional adoption has kept paced with the growth of the sector. S&P Global placed its stablecoin stability assessments onchain via Chainlink, giving protocols and institutions a standardized evaluation framework on collateral, liquidity, and governance risks — an institutional milestone for programmable finance. Late-stage acquisition discussions by Coinbase and Mastercard involving BVNK and Zerohash signaled a deepening institutional recognition of stablecoin payment as a mature and strategically important financial tool. Local stablecoins are also seeing early adoption. Japan’s first yen stablecoin, JPYC, launched 27 October and has thus far gathered more than $7.6M in circulating supply although trading volume remains limited.

Notable M&A/Fundraising and Portfolio Updates

Fundraising in October reached its highest level this year, with more than $3.5B raised across 78 deals. Stablecoin blockchain, Tempo, raised $500M at a $5B valuation. Prediction markets funding is also heating up. Kalshi raised a significant sum of $300M at a $5B valuation, following Polymarket’s $2B investment from ICE, valuing it $9B. Digital asset treasuries continue to raise with more than $300M of funding in October. On the acquisition front, FalconX acquired 21Shares, Kraken acquired Small Exchange for $100M and Coinbase acquired Echo for $375M.

Portfolio Highlights:

• 14 tokenised funds from WisdomTree are live on Plume Network with DCG allocating $10M to the WisdomTree Money Market Fund.

• Questflow launched Daydreams, an x402 agent facilitator, processing around 100k+ in transaction a day.

• Myriad markets are now live on BNB.

• AEON Pay expanded to Georgia with local QR-based crypto checkout, letting users pay in digital assets at 20K+ local merchants while settling in local currency.

• Babylon demonstrated borrowing USDC against native BTC on Ethereum Mainnet with Morpho.

• DigiFT acts as distribution partner for CMB International’s money market fund on BNB.

• Plume Network has earned approval from the SEC as a registered transfer agent, enabling it to manage digital securities and shareholder records directly onchain and integrate with the U.S. Depository Trust & Clearing Corporation (DTCC) settlement network.