November Newsletter: BTC, DAT Compression and Macro

October delivered a sharp reality check for the cryptocurrency market. For more than a decade, the month had been associated with strong rallies. This time, it ended with widespread losses, fading momentum, and a shift in sentiment. Beneath the surface, technology advances and regulatory decisions continued to reshape the market, setting the stage for a volatile November.

Macro and Market Conditions

Bitcoin broke its long-standing “Uptober” streak with its first negative October since 2018, falling about five percent as global uncertainty increased. The downturn was not caused by any internal crypto failure but by a combination of broader risks: shrinking liquidity, weaker risk appetite, and an increasingly uncertain monetary policy outlook.

The Federal Reserve reduced interest rates by a quarter point, as markets expected, but Chair Jerome Powell stressed that future cuts were not guaranteed. His warning that policy remained “sufficiently restrictive” dampened investor confidence and pushed Treasury yields higher. At the same time, renewed trade tension between the United States and China shook markets. Tariff announcements and export restrictions created spillover effects across global equities, commodities, and digital assets.

In short, the macro environment turned hostile. Risk appetite fell, liquidity tightened, and the usual October optimism gave way to defensive positioning. The total crypto market capitalization slipped modestly after reaching record highs earlier in the quarter.

Market structure data suggests this was not a retail panic but a repositioning among institutional traders. Futures and options activity reached new records in the third quarter, signaling ongoing institutional engagement despite the price weakness. The constant reversal of expectations—August green, September red, and October red again—underscored how unreliable historical patterns have become in a market now guided by liquidity and macro signals rather than seasonality.

Institutional and Regulatory Developments

Politics and regulation once again shared center stage. President Donald Trump issued a controversial pardon for Binance founder Changpeng Zhao, framing it as a step toward ending what he called the previous administration’s “war on crypto.” The decision was received positively within the industry, although critics questioned whether it blurred the line between financial innovation and political favoritism. Binance’s BNB token rose modestly after the announcement, and Zhao publicly thanked Trump, vowing to “make America the capital of crypto.”

While that story dominated headlines, traditional financial firms continued to push quietly into tokenization and digital assets. Visa expanded support for multiple stablecoins, Western Union filed a trademark for a potential WUUSD token, and Circle began testing its new settlement network, Arc. Tether announced plans to launch USAT in December, and Indonesia outlined its own digital rupiah project.

In parallel, banks and asset managers deepened their involvement in tokenized securities. Nordea is prepared to offer Bitcoin-linked synthetic exchange-traded products, while Securitize is moving toward a public listing through a merger with a special-purpose acquisition company valued at over one billion dollars. These moves suggest that, even as prices falter, the underlying infrastructure for institutional crypto exposure continues to develop.

Technology and Protocol Upgrades

Bitcoin

Bitcoin Core’s version 29.1 update introduced lower fee rate thresholds for transaction relay and packaging, allowing more efficient block space use when the network is uncongested. It also added rate limiting for log writes to prevent storage overflow in abnormal situations, improving node stability.

Ethereum

Ethereum’s next major upgrade cycle advanced on schedule. The Fusaka testnets completed in October, with mainnet activation planned for early December. The upgrade will raise the mainnet gas limit from 45 million to 60 million, expanding transaction capacity. Preparations also began for the Glamsterdam upgrade, which will introduce new execution and consensus proposals such as proposer-builder separation (ePBS) and block-level access lists.

Beyond protocol tuning, the Ethereum Foundation promoted ERC-8004, a new “Trustless Agents” standard designed to create an auditable framework for autonomous AI services interacting across blockchains. The standard has already attracted developer interest and will feature prominently at the upcoming DevConnect conference.

Privacy Assets

Privacy coins became the month’s surprise winners. Zcash rose nearly 200% in 30 days and over 900% year to date, driven by growing interest in privacy amid debates over tighter surveillance. Shielded pool inflows reached nearly five million ZEC, representing about thirty percent of total supply. The growth signals longer-term holding behavior and reduced tradable liquidity.

Electric Coin Company, the creator of Zcash, released its fourth-quarter roadmap focused on reducing technical debt, enhancing the Zashi wallet’s privacy, and improving developer fund transparency. Privacy, once seen as a regulatory liability, is being reconsidered as a core crypto utility.

Emerging Narratives and New Use Cases

Coinbase’s x402 protocol captured significant attention. Reviving the dormant HTTP 402 “Payment Required” status code, the system enables micropayments between AI agents and services. Adoption accelerated as major technology companies such as Cloudflare, Google, and Visa began integrating support. Across Ethereum-compatible networks, x402 volume peaked at nearly one million dollars per day, with Base handling the majority of transactions.

This surge reflects early demand for “machine-to-machine commerce,” where AI models can autonomously pay for data, compute, or access through crypto-native payment rails. While still experimental, x402 represents one of the first practical intersections between AI and blockchain, hinting at a future where automated agents become active participants in the digital economy.

Looking Ahead to November

The next few weeks will determine whether the market’s stagnation is a pause or the start of a new regime. Several key variables stand out.

First, liquidity remains the decisive factor. The interplay between Federal Reserve policy, Treasury issuance, and the strength of the U.S. dollar will continue to drive risk appetite. If the dollar weakens and liquidity improves, crypto could rebound quickly.

Second, political progress in Washington will matter. The government shutdown, now entering record length, has delayed several regulatory initiatives, including potential spot altcoin exchange-traded fund approvals and broader stablecoin frameworks. Any resolution would remove a major overhang.

Third, infrastructure growth continues beneath the surface. Tokenization projects, stablecoin pilots, and protocol upgrades are expanding crypto’s long-term base, even if they have yet to translate into price performance.

Finally, privacy and AI narratives are emerging as new catalysts. As financial surveillance intensifies and autonomous digital systems become mainstream, these two themes may drive the next wave of speculative and structural growth.

Conclusion

October 2025 underscored that crypto no longer operates in isolation from global markets. The “Uptober” myth faded, replaced by a market that reacts to liquidity, policy, and real economy dynamics. At the same time, the technology behind the industry continues to advance rapidly.

Infrastructure development, protocol innovation, and shifting regulatory tone all point toward long-term maturation, even if near-term sentiment remains cautious. The lesson from October is clear: momentum can vanish, but progress does not. Investors should now focus less on seasonal patterns and more on structural shifts shaping crypto’s future. November begins with uncertainty, but it also begins with opportunity.