This week, the crypto market made a long-awaited recovery after four consecutive weeks of downward momentum.
Bitcoin (BTC) price regained the psychological $90,000 mark on Wednesday, bringing much-needed relief to Bitcoin exchange-traded fund (ETF) holders. Bitcoin returned to gains as BTC traded above $89,600, the key flow-weighted cost metric for ETF buyers.
In a bid to boost investor sentiment, ARK Invest CEO and Chief Investment Officer Cathie Wood said her firm’s $1.5 million Bitcoin bull market price forecast remains unchanged, noting that billions of dollars of liquidity will return after the U.S. government shutdown ends.
The crypto market has rebounded on the back of sharply rising expectations for interest rate cuts in the US, with odds increasing by 46% in one week. Markets are pricing in an 85% chance of a 25 basis point (bp) rate cut at the U.S. Federal Reserve’s Dec. 10 meeting, up from 39% a week ago, according to CME Group’s FedWatch tool.
However, Bitcoin is still facing its worst November in seven years, with the world’s first cryptocurrency down around 17% on the monthly chart, despite Bitcoin’s historical return for the month averaging 41%, according to blockchain data provider Coinglass.
Cathie Wood says ARK’s $1.5 million Bitcoin bullish price remains unchanged amid market attention
Stock and crypto markets could be poised for a year-end reversal as liquidity improves following the end of a record government shutdown and U.S. monetary policy turns more supportive.
Improving market conditions are being driven by increased liquidity, with $70 billion already returning to the market since the end of the U.S. government shutdown, and an additional $300 billion expected to return over the next five to six weeks as the Treasury general account normalizes, according to investment management firm ARK Invest.
Another potential trigger will come on December 1, when the US Federal Reserve is scheduled to end its quantitative tightening program and pivot to quantitative easing, including bond purchases, to lower borrowing costs and stimulate economic activity.
“With liquidity returning, quantitative tightening (QT) ending on Dec. 1, and monetary policy turning supportive, we believe conditions are building that could allow markets to reverse the recent drawdown,” Ark wrote in an X post on Wednesday.
Cryptocurrency and AI liquidity pressure may ease
The current “liquidity squeeze” that is limiting the upside potential for the crypto and artificial intelligence markets will “reverse in the coming weeks,” ARK Invest CEO and Chief Investment Officer Cathie Wood said in a post on Thursday.
In early April, ARK Invest predicted a 2030 Bitcoin (BTC) price target of $1.5 million in its “bull case” and $300,000 in its “bear case.”
Despite the recent correction in the cryptocurrency market and the diminished role of Bitcoin as a stablecoin safe haven, the bullish price target remains unchanged.
“Stablecoins have accelerated and taken some of the role that we expected from Bitcoin,” but “gold price growth has far exceeded our expectations,” Wood explained in a webinar on Monday, adding:
“So the bull price that most people are focused on hasn’t actually changed.”
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UK takes ‘meaningful step’ with proposed DeFi tax review
The UK has launched a new tax framework to ease the burden on decentralized finance (DeFi) users, deferring capital gains tax for users of crypto loans and liquidity pools until the underlying tokens are sold, a move welcomed by the domestic industry.
HM Revenue and Customs (HMRC) on Wednesday proposed a “no gain, no loss” approach to DeFi. This includes lending tokens and receiving returns of the same type, borrowing arrangements, and moving tokens into liquidity pools.
According to the proposal, taxable gains and losses would be calculated based on the number of tokens returned when the liquidity tokens are redeemed compared to the number originally donated by the user.
Currently, when a user deposits funds into a protocol, regardless of the reason, the transfer may be subject to capital gains tax. In the UK, capital gains tax rates vary from 18% to 32% depending on the deed.
Tax framework is a ‘positive signal’ for UK crypto regulation
Sian Morton, head of marketing at cross-chain payment system Relay Protocol, said HMRC’s no-gain, no-loss approach is “a meaningful step forward for UK DeFi users who borrow stablecoins against cryptocurrencies, bringing their tax treatment closer to the actual economic realities of these interactions.”
“It’s a positive signal for the evolution of the UK’s attitude towards crypto regulation,” she added.
Maria Revali, a lawyer for DeFi platform Aave, said the change “makes clear that there are no taxes on DeFi transactions until you actually sell the tokens.”
“Other countries facing similar issues may also wish to take note of HMRC’s approach and the depth of research and consideration behind it,” she added.
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DWF Labs launches $75 million fund for the “institutionalization stage” of DeFi
DWF Labs, a cryptocurrency market maker and Web3 investment firm, said it is investing up to $75 million in decentralized finance projects that have the potential to support institutional adoption.
The company shared its announcement via X on Wednesday, saying the fund will support projects with “transformative value propositions” that can be scaled to support large-scale implementation.
“This initiative targets blockchain projects building dark pool perpetual DEXs, decentralized financial markets, fixed income or yield-bearing asset products (…) that the company believes is poised for significant growth as crypto liquidity continues its structural transition on-chain,” DWF Labs said.
As part of the announcement, DWF Labs Managing Partner Andrei Grachev emphasized the importance of building DeFi infrastructure “with real utility” that can support institutional investor demand.
“DeFi is entering a stage of institutionalization,” he said, adding, “We are seeing real demand for infrastructure that can scale, secure order flow, and generate sustainable revenue.”
The fund will focus on projects built across Ethereum, BNB Smart Chain, Solana, as well as Coinbase’s Ethereum Layer 2 base.
In addition to the capital injection, DWF Labs will also provide support in ways such as “TVL and cryptocurrency liquidity provisioning, practical market entry strategy and execution support,” and access to partner exchanges, market makers, infrastructure providers, and cryptocurrency institutions.
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Balancer community proposes plan to distribute funds recovered from hack
Two members of the Balancer Protocol community submitted a proposal Thursday outlining a plan to distribute a portion of the funds recovered from the protocol’s $116 million exploit in November.
Approximately $28 million from the $116 million heist was recovered by white-hat hackers, inside rescuers, and StakeWise, an Ether (ETH) liquid staking platform.
However, this proposal only covers the $8 million recovered by white hackers and internal rescue teams, and the approximately $20 million recovered by StakeWise would be distributed separately to users.
The authors proposed that all redemptions should be de-socialized, with funds distributed only to the specific liquidity pool that lost funds, and paid out pro rata according to each holder’s share in the liquidity pool, represented by Balancer Pool Tokens (BPTs).
According to the authors, refunds should also be paid in kind, and hacking victims will be paid in their lost tokens to avoid price discrepancies between different digital assets.
Balancer hacking is one of the “most sophisticated” attacks of 2025, according to Dedi Rabid, CEO of blockchain cybersecurity firm Cyberse, highlighting the need for crypto users to be safe as security threats continue to evolve.
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Nasdaq-listed Enlivex plans $212 million RAIN token play with former Italian Prime Minister
The Nasdaq-listed biotech company plans to buy decentralized prediction market tokens, raising $212 million in a late-cycle crypto conversion, even as other digital asset treasuries (DATs) struggle to stay afloat.
Enlivex Therapeutics (ENLV), a clinical-stage macrophage reprogramming immunotherapy company, announced Monday that it plans to raise $212 million through a private investment in public equity by selling 212 million shares at $1 each. The price represents an 11.5% discount to Friday’s closing price, according to the company’s filing with the U.S. Securities and Exchange Commission.
According to a Monday announcement shared with Cointelegraph, the company will invest the majority of its $212 million in Rain (RAIN), the utility token behind the Rain decentralized prediction market on the Arbitrum network, marking its first corporate strategy centered around a prediction market token.
Shai Novik, executive chairman of Enlivex Therapeutics, told Cointelegraph that “we believe prediction markets are one of the most exciting emerging sectors in the blockchain space,” with “extraordinary” long-term growth potential.
“By entering now, we can benefit from first-mover advantage in a fundamentally strong category.”
When asked why he chose the Rain protocol, Novik said its “decentralized” architecture stood out because it serves as a “scalable model that supports global access and growth.”
Enlivex expects to complete the purchase of Rain within 30 days of the closing of the offering.
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DeFi market overview
Most of the top 100 cryptocurrencies by market capitalization ended the week in the black, according to data from Cointelegraph Markets Pro and TradingView.
The SPX6900 (SPX) meme coin was the biggest winner this week, rising over 43%, followed by the layer-1 blockchain Kaspa (KAS) token, which rose 39% last week.
Thanks for reading our overview of this week’s most influential DeFi developments. Tune in next Friday for more stories, insights, and education on this dynamically evolving universe.
