VCs Invest $5,1B in Crypto Companies Despite Moderate Uptober for Bitcoin

October ended for Bitcoin With a decline of around 4%, a notable deviation from its usual performance during this historic month, known among traders as "Uptober." Nevertheless, remarkable fluidity is flowing through the crypto market, with a total of $5,1 billion in venture capital poured into the sector. This figure is the second-highest monthly investment since 2022 and the best of 2025 outside of March.

CryptoRank's figures reveal that three large deals accounted for the majority of this amount, defying the seasonal myth of October. Bitcoin's 3,7% drop during a month typically considered profitable not only seems like a departure from the past, but also harbors an intriguing mystery: are builders seeing something traders missed, or are a few massive trades disrupting the signal?

Nearly $2,8 billion of total investment in October can be traced to just three transactions: the Intercontinental Exchange's (ICE) strategic investment in Polymarket for up to $2 billion, Tempo's $500 million Series A funding led by Stripe and Paradigm, and Kalshi's $300 million Series D round. This concentration effect tells a significant part of the story. The average size of these rounds is likely in the low millions, and if we exclude Polymarket, Tempo, and Kalshi, the narrative shifts from "the best month in years" to "a continued, if modest, continuation of the subdued pace of 2024."

Why Sell in the Spot Market?

Bitcoin's weakness during October was due to profit-taking following September's rally, fueled by macroeconomic pressure from rising government bond yields, and a sustained exodus from Exchange-Traded Funds (ETFs) that began mid-month and accelerated in recent weeks. While Bitcoin ETFs recorded nearly $3,4 billion in net inflows, daily flow data from Farside Investors shows significant redemptions, particularly over the last ten trading days.

Unlike the spot market, the venture capital sector operates on a different timeline. The investment firms that issued funds in October had taken strategic positions months earlier. The actual fund transfers and announcements are more the result of legal processes and strategic alignment than of the mood in the spot market.

ICE's investment in Polymarket doesn't reflect a bet on Bitcoin's price in November; rather, it reflects ICE's confidence in the potential of prediction markets, which represent a multi-billion dollar market, where first-mover advantage and regulation play a greater role than short-term price movements. Meanwhile, Tempo's $500 million offering focuses on developing enterprise-grade stablecoin and payment infrastructure, where success criteria are independent of Bitcoin's value fluctuations.

Kalshi's $300 million round has a similar profile. The prediction market platform, which is regulated by the CFTC, competes with Polymarket and traditional derivatives exchanges. Kalshi's valuation has risen to $5 billion, driven by growth in transaction volumes and a favorable regulatory position, rather than by timing within the crypto market.

These three largest deals of October share a common focus on infrastructure and compliance, highlighting that crypto are increasingly seen as the 'water pipes' of the financial world rather than a speculative vehicle.

Risks of Concentration in Mega Deals

The concentration of investments creates vulnerability. Should Polymarket face regulatory challenges or if Tempo's business expectations take longer to materialize, these two prominent deals may be attractive at peak valuations. The same concentration that derailed October's striking figures could expose the sector to downgrades if these large bets fail.

Timing is also a concern. The announcement of ICE's investment in Polymarket came just before the US municipal elections, allowing the platform to capitalize on what turned out to be record volume in prediction markets. This strategic timing raises questions about the sustainability of engagement after the election frenzy subsides.

Kalshi's $300 million also came amid election-related turmoil. Both deals could be interpreted wisely if prediction markets maintain their activity levels after the election, or if they are the mirage of peak-hype prices that collapse as soon as political events resolve. If October's trend continues, the winners won't be projects that catch speculative fever, but platforms that function as utility layers in the financial infrastructure, making them unavoidable for institutions.

Frequently Asked Questions

What are the main reasons for Bitcoin's drop in October?
Bitcoin's decline can be attributed to profit-taking after a successful run, macroeconomic pressure from rising government bond yields, and outflows from ETFs.

What does the strong venture capital in October indicate despite Bitcoin's decline?
The significant investment from venture capital, primarily in infrastructure projects and large deals, indicates confidence in the long-term growth of the crypto sector, regardless of short-term price movements.

What are the risks associated with concentrating investments in a few large deals?
This concentration can lead to fragility; if one or two of these large investments fail, it could lead to a disproportionate decline in currency value and market dynamics.