Please note that VanEck may have a position(s) in the digital asset(s) described below.

Three key takeaways for October:

• Tariff shock ends “Uptober”: Bitcoin’s rally reversed abruptly after a Trump tariff tweet triggered a swift liquidation wave that erased weeks of gains.
• Binance breaks under pressure: Oracle errors and a trading engine freeze at crypto’s largest exchange magnified losses, underscoring systemic fragility in market infrastructure.
• Privacy and innovation advance: Digital-asset treasuries kept accumulating through the drawdown while experimenting with new financing tools, and Zcash led a renewed push toward zero-knowledge privacy tech.

Price Returns

Source: Bloomberg as of 10/31/2025. Index performance is not representative of fund performance. It is not possible to invest directly in an index. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein.

“Uptober” Averted

October began like a victory lap for Bitcoin holders. The halving trade had aged well, volatility was subdued, and institutional inflows through ETPs and DATs were steady. On October 6, Bitcoin notched a new all-time high near $126,000, its third consecutive monthly close in six figures. Traders dubbed it “Uptober.”

Then came the tweet.

At 10:41 a.m. EST on October 10, former President Trump posted: “As President, I will impose 100% tariffs on all Chinese goods. America First. China pays.”

Within minutes, the macro dominoes began to fall: the dollar surged, risk assets sold off, and Bitcoin, the most liquid expression of speculative risk, turned violently south. Leveraged longs were vaporized. Roughly $19B in crypto futures positions disappeared in less than 12 hours as prices breached six figures across major venues. On some smaller exchanges, cascading margin calls pushed BTC near $100K.

Volatility Spikes Amid Tariff Tempest

Source: Glassnode as of 10/27/2025. Index performance is not representative of fund performance. It is not possible to invest directly in an index. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein. MarketVector Smart Contract Leaders Index (MVSCLE) is designed to track the performance of the largest and most liquid smart contract assets, and is an investable subset of MarketVector Smart Contract Index.

BTC Futures Open Interest Drops -19% in 5 Hours

Source: Glassnode as of 10/27/2025. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein.

We’ve seen a lot of market unwinds in this space, but this one was particularly cinematic. On October 9, perpetual funding rates were still near 40% annualized, and social sentiment screamed, “$150K next.” By the morning of the 11th, traders were instead watching liquidation bots chew through billions.

The aftermath was textbook. Bitcoin stabilized near $103K, then drifted to a $115K close, down roughly 9% on the month before rallying somewhat to end October -4%. ETH followed a similar path, closing around $3,700 on October 11th and ending October near its lows, down 6%.

Binance Exchange Wobbles During the Crypto Panic of October 10

Every cycle produces one day when the infrastructure gets stress tested. October 10 was that day for Binance.

The exchange handled 30–40% of global crypto spot and futures volume going into the selloff. During the worst of the volatility, multiple assets on Binance depegged from their redemption value — including the USDE stablecoin (-35%) and wBETH, a wrapped version of staked ETH that momentarily traded down 90%.

The catalyst: a $90M market sell order that ripped through Binance’s internal order books, which also feed its own oracle pricing. With no external reference points, the price collapse became self-reinforcing. That’s the crypto equivalent of a clearing house marking collateral to fire-sale prices and calling in more margin just as liquidity vanishes.

Then came the real problem: latency.

Binance’s trading engine seized under the load. For roughly 100 minutes, thousands of traders reported “order rejected” errors while watching their collateral evaporate. Some couldn’t sell; others couldn’t buy the dip. Liquidity providers, normally the shock absorbers, were frozen out. The result was the kind of price dislocation that only happens when human and machine panic meet.

In the chaos, Binance triggered its auto-deleveraging (ADL) system, a last-ditch safety valve that forcibly closes profitable positions to cover losing ones. In traditional markets, clearing members absorb defaults; in crypto, that role doesn’t exist. ADL is an algorithmic clearing member of last resort.

In traditional finance, exchanges like the CME and CBOE rely on clearing members: firms that stand between traders and the exchange, absorbing losses if a client goes bust. They’re effectively risk sponges that prevent the kind of forced winner-liquidations we saw on Binance. In crypto, that layer doesn’t exist. Everything is peer-to-peer margining, automated and unforgiving. Until decentralized markets or prime brokers evolve to take on that role, episodes like October 10 will keep exposing how thin the protection layer really is.

The twist this time: Binance still had more than $1B in its reserve fund. That prompted a heated debate among traders: why invoke ADL if the fund wasn’t exhausted? One answer might be that the ADL logic runs on price triggers, not judgment. It’s a system designed for survival, not fairness.

We doubt the event was malicious; it was just a perfect storm of incentive misalignment, overconfidence, and self-referential pricing. Still, reputational scars matter. Whether Binance can rebuild trust with its heaviest users, particularly market makers, will be a key metric for November.

What we’re watching next:

• Whether Binance diversifies its oracle sources
• Engine uptime under load
• Potential migration of professional traders toward exchanges that stayed online: Hyperliquid, CME, or even decentralized perps

Winners and Losers

While the market convulsed, one ecosystem actually printed gains: BNB Chain.

BNB rose +13% in October, propelled by a new decentralized exchange (DEX) called Aster, which briefly topped all decentralized derivatives platforms by volume. Incentive-driven trading (“points farming” by another name) drew users like moths to flame. At one point, Aster processed more notional volume than dYdX and Hyperliquid combined.

But as always, the details matter. DefiLlama (a credible data aggregator) later excluded Aster’s volumes from its DEX rankings, citing probable wash trading. We’re not ready to call that verdict final, but it reinforces a theme: liquidity in crypto often lives where incentives flow, not necessarily where organic demand resides.

BNB’s fundamentals did improve, though. Chain revenue jumped +235% month-over-month, placing it second behind Hyperliquid’s $3M/day run rate. Meanwhile, Ethereum reclaimed its title as the top DEX chain by daily volume ($4.5B, edging Solana by just 1%).

The losers were concentrated in Ethereum Layer 2 tokens — governance coins without gas utility. LINEA fell 43%, adding to a brutal stretch for new L2 entrants. The structural problem is clear: users pay ETH, not LINEA, for gas. Unless these tokens capture a share of network fees, they remain governance placeholders. Ex-Mantle (+187% YoY), the group’s average one-year return sits around -60%, compared with +65% for BTC and +62% for ETH.

The divergence tells a story: real economic utility—blockspace, stablecoin velocity, fee throughput—is what holds up during volatility. Narrative-only tokens don’t.

Source: Artemis XYZ as of 10/28/2025. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein.

Digital Asset Treasuries (DAT) Updates

Even as markets convulsed, the digital-asset treasuries (DATs) kept stacking.

October ranked among the year’s strongest accumulation months for ETH and SOL. Yet, despite that buying, DAT market values still slipped as token prices corrected.

DATs added roughly +4bps of BTC supply, +59bps of ETH, and +39bps of SOL. The contrast was striking: the marginal buyer remained the public treasury, not the hedge fund.

Yet valuations compressed. BTC’s 30-day volatility jumped from 24% to 42%, but DAT share prices lagged, reflecting fatigue among investors still more enchanted by AI equities than crypto beta. We can’t blame them: most AI names kept printing higher highs while pure-play miners and treasuries went sideways.

What impressed us this month was the financing innovation inside the DAT cohort:

DFDV issued tradable warrants (0.1 per share) that give holders upside exposure, a creative twist on traditional equity-linked financing.

BNMR raised capital via a mix of stock and warrants, issuing roughly 5.2 million shares paired with 10.4 million warrants to expand its crypto holdings ahead of year-end.

In Japan, Metaplanet secured a $500M debt facility specifically to fund a share repurchase program, a rare signal of confidence amid sector volatility.

The headline move came from Strategy (formerly MicroStrategy). After years of lobbying rating agencies to consider Bitcoin collateral, S&P finally assigned Strategy a B- rating on its securities. That’s still speculative-grade, and the analysis gave MSTR’s Bitcoin holdings (!) zero credit, but it's still symbolically massive.

Over time, these credit ratings could open a new buyer base: yield-hungry credit funds that might soon be exposed to MSTR converts or preferreds. For years, DATs were considered equity curiosities. This rating starts to move them into the broader capital-market conversation.

BTC DAT Holding Growth Slows in October

Source: The Block as of 10/27/2025. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein.

Privacy Strikes Back: The Zcash (ZEC) Revival

Amid the chaos, a quieter revolution brewed in privacy. Zcash (ZEC), the oldest active zero-knowledge chain, rallied +162% in October.

Three things happened almost simultaneously:

1. Grayscale reopened its Zcash Trust to accredited investors for the first time in years.
2. A Solana bridge went live, powered by NEAR’s OmniBridge, allowing direct swaps between ZEC and SPL tokens with no centralized intermediary required.
3. A protocol upgrade (“Orchard”) accelerated the migration to shielded transactions, which now represent ~29% of total circulating ZEC, up 456% since 2022.

The privacy pendulum swings every few years in crypto. In 2016–2018, privacy coins were synonymous with regulatory risk. By 2021, they were functionally sidelined. But as blockchain surveillance has intensified, especially through Chainalysis-like forensics, the appetite for credible privacy options appears to be returning.

This isn’t about hiding illicit activity; it’s about reintroducing financial discretion into systems that have grown too transparent for comfort. When every transaction is public, even legitimate actors hesitate to move size.

Zcash’s revival is also symbolic. It’s proof that zero-knowledge proofs aren’t just for scaling; they’re also for preserving autonomy. The integrations with NEAR and Brave Wallet broaden ZEC’s potential use cases beyond ideological circles.

We suspect the next regulatory wave - the one that tries to codify digital-asset privacy rather than ban it - could make ZEC and similar assets relevant again.

ZEC Hits Highs in Valuation and Liquidity Amid Institutional Investment This October

Source: Artemis as of 10/30/25. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein.

Shielded ZEC Hit 29% of Circulating Supply in Q4 2025

Source: TheBlock as of 10/30/25. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein.

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