Cryptocurrency markets saw a long-awaited recovery this week after four consecutive weeks of declines.
Bitcoin (BTC) price regained its psychological high of $90,000 on Wednesday, bringing much-needed relief to exchange-traded fund (ETF) holders who once again regained gains as BTC traded above the key flow-weighted cost base of $89,600 for ETF buyers.
Boosting investor sentiment, Cathie Wood, CEO and chief investment officer of ARK Invest, said the company’s $1.5 million bull market price projection for Bitcoin remained unchanged, pointing to a billion-dollar return to liquidity once the U.S. government shutdown ends.
The recovery in the cryptocurrency market comes after a surge in expectations for US interest rate cuts, with odds rising 46% in a week. Markets are pricing in an 85% chance of a 25 basis point rate cut at the US Federal Reserve meeting on December 10, down from 39% a week earlier. According to to CME Group’s FedWatch tool.
However, Bitcoin is still facing its worst November in seven years as the world’s first cryptocurrency is down around 17% on the monthly chart, even though Bitcoin’s average historical return was 41% for the month. According to to blockchain data provider CoinGlass.
Cathie Wood says Bitcoin ARK’s $1.5 million bull price has not changed in response to increased market interest
Stock and cryptocurrency markets may be poised for a year-end reversal as liquidity improves and U.S. monetary policy becomes more supportive following the end of the record-breaking government shutdown.
Improving market conditions will be fueled by rising liquidity, which has already returned $70 billion to markets since the end of the U.S. government shutdown, and another $300 billion is expected to be returned to markets over the next five to six weeks, according to investment management firm ARK Invest, as the overall Treasury bill normalizes.
Another potential catalyst will come on December 1, when the U.S. Federal Reserve is scheduled to end its quantitative tightening program and move toward quantitative easing, a shift that involves buying bonds to lower borrowing costs and stimulate economic activity.
“With the return of liquidity, the end of quantitative tightening (QT) on December 1, and the favorable monetary policy trend, we believe conditions are forming in which markets can potentially reverse the recent declines,” Ark wrote in Wednesday’s X issue. post.
Cryptocurrency liquidity decline and artificial intelligence may ease
The current “liquidity crunch” limiting growth in cryptocurrency and artificial intelligence markets “will reverse itself over the next few weeks,” Cathie Wood, CEO and chief investment officer of ARK Invest, wrote in a Thursday X report post.
At the beginning of April, ARK Invest predicted a 2030 price target for Bitcoin (BTC) of $1.5 million in the company’s “bull case” and a price target of $300,000 in a “bear case”.
Despite the recent correction in the cryptocurrency market and the subtraction of stablecoins from Bitcoin’s role as a safe-haven asset, the bullish price target remains unchanged.
“Stablecoins have accelerated, taking some of the role we expected from Bitcoin,” but “the appreciation in the gold price has been much greater than we expected,” Wood explained during webinars on Monday adding:
“So net our bull price, which most people are focused on, has really not changed.”
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The UK is taking a “significant step forward” with its proposed DeFi tax change
The UK has introduced a recent tax framework that eases the burden on decentralized finance (DeFi) users, with capital gains tax on cryptocurrency users and liquidity pool users deferred until the underlying token is sold, a move welcomed by the local industry.
HM Revenue and Customs (HMRC) proposed on Wednesday, a “no gain, no loss” approach to DeFi that would involve borrowing a token and getting back the same kind, lending arrangements and moving tokens into a liquidity pool.
Under the proposal, taxable gains or losses would be calculated at the time of exchange of liquidity tokens based on the number of tokens the user receives back compared to the number they originally contributed.
Currently, when you contribute funds to the protocol, regardless of the reason, the move may be subject to capital gains tax. The UK has capital gains tax rates Power range from 18% to 32%, depending on the action.
Tax framework a ‘positive signal’ for UK crypto regulation
Sian Morton, marketing manager at the Relay Protocol crosschain payment system, he said HMRC’s “no gain, no loss” approach is “a significant step forward for UK DeFi users who borrow stablecoins against cryptocurrency collateral, and moves tax treatment closer to the real economic reality of these interactions.”
“A positive sign for the UK’s evolving position on cryptocurrency regulation,” she added.
Maria Riivari, lawyer of the DeFi platform Aave, he said the change “would bring clarity that DeFi transactions do not trigger tax until you actually sell your tokens.”
“Other countries facing similar questions may want to pay attention to HMRC’s approach and the depth of research and thought behind it,” she added.
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DWF Labs is launching a $75 million fund for the “institutional phase” of DeFi
Cryptocurrency market maker and Web3 investment firm DWF Labs says it is investing up to $75 million in decentralized finance projects that could support institutional adoption.
The company shared its announcement via X on Wednesday, saying the fund will support projects with proposals of “innovation value” that can scale to support large-scale implementation.
“The initiative will target blockchain projects building perpetual dark pool DEXs, decentralized money markets, and fixed income or income-producing asset products, […] areas that the company believes are poised for significant growth as cryptocurrency liquidity continues its structural migration 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 demand.
“DeFi is entering an institutional phase,” he said, adding: “We see a real need for infrastructure that can handle the size, protect order flow and generate sustainable profit.”
The fund will focus on projects built on Ethereum, BNB Astute Chain and Solana, as well as Coinbase’s Layer 2 Ethereum base.
In addition to the capital injections, DWF Labs will also offer support in the form of “TVL and cryptocurrency liquidity provision, practical go-to-market strategy and execution support”, access to partner exchanges, market makers, infrastructure providers and cryptocurrency institutions.
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The Balancer community proposes a plan for the distribution of funds recovered from the hack
Two members of the Balancer Protocol community unveiled a proposal Thursday outlining a plan to distribute some of the funds recovered from November’s $116 million protocol exploit.
White hat hackers, internal rescuers and StakeWise, a liquid Ether (ETH) investing platform, recovered approximately $28 million from the $116 million heist.
However, the proposal covers only $8 million recovered by white hat hackers and internal rescue teams, while the nearly $20 million recovered by StakeWise will be distributed to users.
The authors proposed that all returns should be non-socialized, meaning that funds would only be distributed to specific liquidity pools that have lost them, and paid out in proportion to each holder’s share of the liquidity pool, represented by Balancing Pool Tokens (BPT).
According to the authors, refunds should also be paid in kind, with victims of the hack receiving payment denominated in lost tokens to avoid price discrepancies between different digital assets.
The Balancer hack was one of the “most sophisticated” attacks of 2025, according to Deddy Lavid, CEO of blockchain cybersecurity firm Cyvers, highlighting the need to keep cryptocurrency users secure 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 is raising $212 million in an end-of-cycle pivot to cryptocurrencies, with plans to buy the decentralized prediction marketplace token even as other digital asset treasures (DATs) struggle to stay afloat.
Enlivex Therapeutics (ENLV), a clinical-stage macrophage immunotherapy reprogramming company, said Monday that it plans to raise $212 million through private investment in public equity by selling 212 million shares at $1 each. According to documents filed by the company with the US Securities and Exchange Commission, this price represents an 11.5% discount compared to Friday’s closing.
The company plans to invest most of the $212 million in Rain (RAIN), the utility token behind the Rain decentralized prediction market on the Arbitrum network, marking the first corporate strategy focused on a prediction market token, according to a Monday announcement shared with Cointelegraph.
“We see prediction markets as one of the most exciting emerging sectors in the blockchain space” with “exceptional” long-term growth potential, Shai Novik, executive chairman of Enlivex Therapeutics, told Cointelegraph.
“By entering the market now, we gain first-mover advantage in a fundamentally strong category.”
When asked about the reason for choosing the Rain protocol, Novik said its “decentralized” architecture stands out because it serves as a “scalable model that supports global access and growth.”
Enlivex expects to complete the purchases of Rain within 30 days of the closing of the offering.
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DeFi market overview
According to data from Cointelegraph Markets Pro and TradingView, most of the top 100 cryptocurrencies by market capitalization ended the week in the green.
Memecoin SPX6900 (SPX) surged over 43% as the week’s biggest gainer, followed by Layer 1 blockchain token Kaspa (KAS), which surged 39% over the past week.
Thank you for reading our roundup of the most essential events in DeFi this week. Join us this Friday for more stories, insights and education about this animated space.
