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Cryptocurrency exchanges have prolonged their downturn notwithstanding highly anticipated political events occurring in the US.
On Wednesday, President Donald Trump enacted a funding measure to conclude the unprecedented 43-day US government closure, following its approval in the Senate on Monday and ratification by the House of Representatives on Wednesday.
This legislation allocates finances for the government until Jan. 30, 2026, allowing both Democrats and Republicans more time to negotiate broader funding strategies for the upcoming year.
The conclusion of the shutdown did not enhance interest among Bitcoin (BTC) exchange-traded fund (ETF) purchasers. Spot BTC ETFs experienced a fleeting rebound on Tuesday, drawing $524 million in inflows, but outflows swiftly resumed, resulting in an astonishing $866 million in daily net outflows on Thursday, according to Farside Investors.
Bitcoin dropped to a six-month low of $95,900 on Friday, a price last recorded in May as its primary demand factors continued to lack energy.
Investments from ETFs and Michael Saylor’s Approach were the two major engines driving Bitcoin’s value this year, as per Ki Young Ju, founder and CEO of cryptocurrency analytics platform CryptoQuant.
Bitcoin ETF interest stagnates as US shutdown optimism fails to boost sentiment
The absence of interest in spot Bitcoin ETFs is raising alarms about Bitcoin’s potential for the remainder of the year.
On Monday, the US Senate validated the funding measure, bringing Congress closer to resolving the shutdown. The legislation proceeded for a complete vote in the House of Representatives, which occurred on Wednesday.
Despite encouraging news from the US, spot Bitcoin ETF investments remained stagnant on Monday, with merely $1.2 million of inflows, according to data from Farside Investors.
“Although the US shutdown appears to be concluding, and the S&P and Gold have rebounded sharply, Bitcoin ETFs saw NO interest yesterday,” stated Capriole Investments founder, Charles Edwards, adding that this is not a trend we wish to witness persist.
“Risk assets typically experience a robust bid during the weeks following a Shutdown. There’s still time to steer this ship in the right direction, but it needs to change,” Edwards noted in a Tuesday X post.
Spot Bitcoin ETF inflows were the key catalyst for Bitcoin’s momentum in 2025, Standard Chartered’s global head of digital assets research, Geoff Kendrick, recently shared with Cointelegraph.
Bitwise executive predicts 2026 will be crypto’s genuine bull year; here’s why
Bitwise chief investment officer Matt Hougan is increasingly optimistic that cryptocurrency markets will flourish in 2026, especially as there hasn’t been a late 2025 surge.
During a conversation with Cointelegraph at The Bridge conference in New York City on Wednesday, Hougan mentioned that a cryptocurrency market surge at the end of 2025 would have aligned with the four-year cycle thesis, suggesting that 2026 would signal the onset of a bear market, similar to 2022 and 2018.
When questioned to adjust his forecast on whether the cryptocurrency market would thrive in 2026, Hougan expressed: “I’m indeed more assured in that statement. The primary risk was [if] we surged towards the end of 2025 and subsequently faced a pullback.”
Hougan asserted that interest in the Bitcoin debasement trade, stablecoins, and tokenization would keep advancing, contending that Uniswap’s fee switch proposal introduced on Monday would rejuvenate enthusiasm in decentralized finance protocols in the coming year.
“I firmly believe the fundamental aspects are extremely solid,” Hougan remarked. “I believe these earlier influences, institutional investment, regulatory advancements, stablecoins, tokenization, I just think those are too significant to suppress. Therefore, I anticipate 2026 will be a favorable year.”
Arthur Hayes urges Zcash holders to withdraw from CEXs and “shield” assets
The privacy coin sector has reemerged into the limelight after BitMEX co-founder Arthur Hayes encouraged Zcash holders to withdraw their funds from centralized exchanges (CEXs).
On Wednesday, Hayes advised holders to “shield” their funds, a function that facilitates private transactions within the Zcash network. “If you possess $ZEC on a CEX, transfer it to a self-custodial wallet and shield it,” Hayes noted on X.
His remarks came as Zcash (ZEC) experienced volatile price movements in recent days. The token surged to $723 on Saturday before plummeting to $504 on Sunday. It then rose to a peak of $677 on Monday, only to witness another significant dip. At the moment of writing, ZEC was trading around $450, representing a 37% decrease from its high on Saturday.
Analysts had cautioned that ZEC might face a steep correction due to its relative strength index (RSI) reaching a record high after maintaining its rally above its
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overbought region.
Vitalik Buterin advocates for decentralization in “Trustless Manifesto”
Ethereum co-founder Vitalik Buterin has penned and endorsed the latest “Trustless Manifesto,” which aims to preserve core principles of decentralization and resistance to censorship while urging developers to avoid introducing intermediaries and checkpoints for the sake of broader acceptance.
The Trustless Manifesto, also co-authored by Ethereum Foundation experts Yoav Weiss and Marissa Posner, asserted that cryptocurrency platforms compromise trustlessness as soon as they implement a hosted node or centralized relayer. It noted that while this may appear innocuous, it leads to habitual reliance on such checkpoints, rendering the protocol progressively less permissionless.
“Trustlessness is not merely an additional feature. It is the fundamental essence,” the Ethereum Foundation members stated in the manifesto released on Wednesday. “In its absence, all else — efficiency, user experience, scalability — serves as mere adornment on a delicate foundation.”
“When challenges tempt us towards centralization, we must remind ourselves: every line of convenience code can turn into a bottleneck.”
Though the manifesto was not directed at any specific individual or organization, several Ethereum layer 2 solutions have faced criticism for prioritizing scalability over decentralization to enhance adoption.
Sonic Labs shifts focus from speed to sustainability with a business-centric approach
Sonic Labs, the entity behind the Sonic layer-1 blockchain, has announced a significant strategic transition as it moves from prioritizing transaction speed to developing long-lasting business value and token durability.
After claiming industry-leading results last year, Sonic Labs indicated its next phase will concentrate on enhancements that yield measurable financial benefits, such as new Ethereum and Sonic Improvement Proposals (EIPs and SIPs), reductions in token supply, and redesigned incentives for network participants.
“Every choice we make from now on will be steered by the commitment to generate genuine value, with price, growth, and sustainability consistently in our sights,” stated Mitchell Demeter, the new CEO of Sonic Labs.
This strategy aims to deliver “quantifiable, enduring value” for builders, validators, and token holders, Demeter wrote in a post on X on Tuesday post. “Our aim at Sonic is to transcend hype and construct a sustainable business framework for a layer one that creates, seizes, and returns actual value to token holders.”
The upcoming fee monetization upgrade will feature a tiered reward structure for builders and fixed incentives for validators.
Sonic Labs will furthermore escalate the frequency of programmatic Sonic (S) token burns, effectively permanently withdrawing tokens from circulation to tighten the overall supply.
Sonic claims to be the fastest Ethereum Virtual Machine (EVM) chain globally, boasting a “true” finality of 720 milliseconds (ms) — the confirmation that a transaction is irreversible, which takes place once it is integrated into a block on the blockchain ledger.
DeFi market summary
Based on information from Cointelegraph Markets Pro and TradingView, the majority of the 100 largest cryptocurrencies by market capitalization concluded the week in negative territory.
The privacy-focused Dash (DASH) token plummeted 45%, marking the steepest decline among the top 100, followed by the Internet Computer (ICP) token, which fell over 27% in the weekly review.
Thank you for reviewing our recap of this week’s most significant DeFi developments. Join us next Friday for more narratives, insights, and knowledge regarding this rapidly evolving sector.
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