Despite the highly anticipated political developments within the US, the decline in cryptocurrency markets has increased.
On Wednesday, President Donald Trump signed a funding bill to finish the record-breaking 43-day government shutdown within the U.S. after the bill passed the Senate on Monday and was approved by the House of Representatives on Wednesday.
The bill provides funding to the federal government through January 30, 2026, giving Democrats and Republicans more time to succeed in agreement on broader funding plans for the approaching yr.
The end of the shutdown didn’t increase demand amongst buyers of Bitcoin (BTC) exchange-traded funds (ETFs). Spot BTC ETFs enjoyed a temporary bounce on Tuesday, recording $524 million in inflows, but outflows quickly resumed, with a whopping $866 million in each day net outflows on Thursday, in response to Farside Investors.
Bitcoin fell to a six-month low of $95,900 on Friday, a level last reached in May, as its biggest demand drivers continued to lack momentum.
According to Ki Young Ju, founder and CEO of crypto analytics platform CryptoQuant, investing in ETFs and Michael Saylor's strategy were the 2 primary tools that drove demand for Bitcoin prices this yr.
BTC/USD, one-year chart. Source: Cointelegraph
Demand for Bitcoin ETFs is stagnating as US shutdown optimism fails to lift sentiment
The lack of demand for spot Bitcoin ETFs raises concerns about Bitcoin’s prospects for the remaining of the yr.
On Monday, the U.S. Senate approved the funding bill, bringing Congress one step closer to ending the shutdown. The bill faced a full vote within the House of Representatives on Wednesday.
Despite bullish news from the US, spot Bitcoin ETF investments remained flat on Monday, with just $1.2 million in inflows, in response to data from Farside Investors.
“Despite the US shutdown seemingly coming to an end and S&P and gold recovering strongly, there was NO Bitcoin ETF offering yesterday,” said Charles Edwards, founding father of Capriole Investments, adding that we don’t want this momentum to proceed.
“Risk assets typically experience strong supply within the weeks following the shutdown. There remains to be time to show this ship around, nevertheless it must turn around,” Edwards wrote in a Tuesday X post.
Spot Bitcoin ETF inflows have been the important thing driver of Bitcoin's momentum in 2025, Geoff Kendrick, global head of digital asset research at Standard Chartered, recently told Cointelegraph.
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Bitwise Manager Says 2026 Will Be Crypto’s True Bull Year; Here's why
Bitwise Chief Investment Officer Matt Hougan is more confident that crypto markets will boom in 2026, especially since there was no rally at the top of 2025.
Speaking to Cointelegraph on Wednesday on the Bridge conference in New York City, Hougan said a crypto market rally in late 2025 would have fit the four-year cycle thesis, meaning 2026 would mark the beginning of a bear market, much like 2022 and 2018.
When Hougan was asked to revise his prediction on whether the crypto market will boom in 2026, he said: “I'm actually more confident in that statement. The biggest risk was.” [if] We made it to the top of 2025 after which there was a pullback.”
Hougan said interest in Bitcoin depreciation trading, stablecoins and tokenization will proceed to grow, while arguing that Uniswap's fee transition proposal unveiled on Monday would revitalize interest in decentralized finance protocols in the approaching yr.
“I believe the underlying fundamentals are only very solid,” Hougan said. “I believe these previous forces, institutional investment, regulatory advancements, stablecoins, tokenization, I just think they're too big to contain. So I believe 2026 goes to be yr.”
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Arthur Hayes calls on Zcash holders to withdraw from CEXs and “protect” assets.
The privacy coin sector got here back into the highlight after BitMEX co-founder Arthur Hayes urged Zcash holders to withdraw their assets from centralized exchanges (CEXs).
On Wednesday, Hayes urged holders to “protect” their assets, a feature that permits private transactions inside the Zcash network. “If you hold $ZEC on a CEX, withdraw it to a self-custody wallet and protect it,” Hayes wrote on X.
The comments got here as Zcash (ZEC) experienced sharp price fluctuations over the past few days. The token rose to $723 on Saturday before falling to $504 on Sunday. It then rose to a high of $677 on Monday, only to see one other sharp decline. At the time of writing, ZEC is trading at around $450, down 37% from Saturday's high.
Analysts had warned that ZEC could see a pointy correction as its relative strength index (RSI) hits its highest value after continuing to rally above its overbought zone.
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Vitalik Buterin advocates decentralization within the “Trustless Manifesto”.
Ethereum co-founder Vitalik Buterin has written and signed the brand new “Manifesto Without Trust,” which goals to uphold the core values of decentralization and resistance to censorship and urge builders to leave the addition of intermediaries and checkpoints for the sake of acceptance.
The “Trustless Manifesto,” also written by Ethereum Foundation researchers Yoav Weiss and Marissa Posner, states that crypto platforms sacrifice trustlessness from the primary moment they integrate a hosted node or centralized relayer, explaining that while it could feel harmless, it becomes habitual and the protocol becomes less permissionless with each checkpoint passed.
“Trustlessness just isn’t a feature to be added as an afterthought. It is the thing itself,” Ethereum Foundation members said within the manifesto released Wednesday. “Without it, every thing else – efficiency, UX, scalability – is decoration on a fragile core.”
“If complexity tempts us to centralize, we must remember: Every line of convenience code can develop into a bottleneck.”
While the manifesto was not aimed toward any specific individual or company, some Ethereum Layer 2 systems have been criticized for sacrificing decentralization to concentrate on scalability to speed up adoption.
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Sonic Labs is transforming from speed to survival with a business-first strategy
Sonic Labs, the organization behind the Sonic Layer-1 blockchain, announced a serious strategic shift that goals to maneuver from emphasizing transaction speed to constructing long-term business value and sustainability of tokens.
After Sonic Labs announced industry-leading performance last yr, the subsequent chapter will concentrate on upgrades that deliver measurable financial results, including latest Ethereum and Sonic enhancement proposals (EIPs and SIPs), token supply reductions, and revised rewards for network participants.
“Every decision we make moving forward will probably be guided by the principles of making real value, with price, growth and sustainability all the time on the core,” said Mitchell Demeter, the brand new CEO of Sonic Labs.
The focus is to create “measurable, lasting value” for developers, validators and token holders, Demeter wrote in a post on Tuesday
The latest fee monetization upgrade features a tiered reward system for developers and stuck rewards for validators.
Sonic Labs may also increase the speed of programmatic Sonic (S) token burns, meaning tokens will probably be permanently faraway from circulation to scale back supply.
Sonic claims to be the world's fastest Ethereum Virtual Machine (EVM) chain, with a “true” finality of 720 milliseconds (ms) – the understanding that a transaction is irreversible, which happens after it’s added to a block on the blockchain ledger.
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Overview of the DeFi market
Most of the highest 100 cryptocurrencies by market capitalization ended the week within the red, in response to data from Cointelegraph Markets Pro and TradingView.
The privacy-preserving Dash (DASH) token fell 45%, recording the most important decline in the highest 100, followed by the Internet Computer (ICP) token, which lost over 27% on the weekly chart.
Thank you for reading our roundup of essentially the most influential DeFi developments this week. Join us next Friday for more stories, insights and data on this dynamically evolving field.
