In the volatile world of cryptocurrency markets, Bitcoin has encountered renewed downward pressure, dropping to a six-month low despite positive political developments in the United States. The end of the record 43-day US government shutdown failed to reignite investor enthusiasm, with spot Bitcoin exchange-traded funds (ETFs) experiencing significant outflows that underscore weakening demand amid broader market uncertainty.
Bitcoin ETF Demand Stalls Amid Shutdown Resolution
Cryptocurrency markets extended their decline even as President Donald Trump signed a funding bill on Wednesday to end the prolonged shutdown. The legislation, which passed the Senate on Monday and the House of Representatives on Wednesday, provides government funding until January 30, 2026, aiming to bridge partisan divides on broader fiscal plans. However, this optimism did little to bolster Bitcoin (BTC) ETF investments. Spot BTC ETFs saw a brief $524 million inflow resurgence on Tuesday but reversed course with $866 million in net outflows on Thursday, according to data from Farside Investors. Bitcoin’s price fell to $95,900 on Friday, marking its lowest level since May, as key demand drivers like ETFs and Michael Saylor’s Strategy showed no momentum. Ki Young Ju, founder and CEO of CryptoQuant, highlighted ETFs and Strategy as primary vehicles propelling Bitcoin’s price this year. On Monday, amid Senate approval, ETF inflows remained flat at just $1.2 million. Charles Edwards, founder of Capriole Investments, noted the disconnect: “Despite the US shutdown seemingly ending, and the S&P and Gold bouncing hard, Bitcoin ETFs saw NO bid yesterday.” He added, “Risk assets usually see a strong bid in the weeks out of the Shutdown. Still time to turn this ship around, but it needs to turn,” in a Tuesday X post. Geoff Kendrick, Standard Chartered’s global head of digital assets research, previously emphasized spot Bitcoin ETF inflows as a key driver of BTC’s 2025 momentum.
Bitwise Exec Predicts 2026 as Crypto's True Bull Year
Bitwise chief investment officer Matt Hougan expressed growing confidence in a 2026 crypto bull market, especially given the absence of a late-2025 rally. Speaking at The Bridge conference in New York City on Wednesday, Hougan explained that a year-end surge would align with the four-year cycle, potentially signaling a bear market start in 2026, akin to 2022 and 2018. Revising his outlook, Hougan stated: “I’m actually more confident in that quote. The biggest risk was [if] we ripped into the end of 2025 and then we got a pullback.” He pointed to sustained interest in Bitcoin’s debasement trade, stablecoins, and tokenization, alongside Uniswap’s fee switch proposal, as catalysts for DeFi revival. Hougan affirmed: “I think the underlying fundamentals are just so sound. I think these earlier forces, institutional investment, regulatory progress, stablecoins, tokenization, I just think those are too big to keep down. So I think 2026 will be a good year.”
Arthur Hayes Urges Zcash Holders to Shield Assets
The privacy coin sector gained attention as BitMEX co-founder Arthur Hayes advised Zcash (ZEC) holders to withdraw from centralized exchanges (CEXs). In a Wednesday X post, Hayes urged: “If you hold $ZEC on a CEX, withdraw it to a self-custodial wallet and shield it,” referencing Zcash’s privacy feature for private transactions. ZEC experienced sharp swings, rallying to $723 on Saturday before dropping to $504 on Sunday, surging to $677 on Monday, and then declining to around $450—a 37% drop from its peak. Analysts warned of a correction due to the token’s relative strength index (RSI) hitting overbought levels after a prolonged rally.
Vitalik Buterin Champions Decentralization in "Trustless Manifesto"
Ethereum co-founder Vitalik Buterin co-authored the “Trustless Manifesto” with Ethereum Foundation researchers Yoav Weiss and Marissa Posner, emphasizing core values of decentralization and censorship resistance. The document critiques platforms that integrate hosted nodes or centralized relayers, arguing it erodes permissionlessness. “Trustlessness is not a feature to add after the fact. It is the thing itself,” the authors stated in the Wednesday publication. “Without it, everything else—efficiency, UX, scalability—is decoration on a fragile core.” They warned: “When complexity tempts us to centralize, we must remember: every line of convenience code can become a choke point.” While not targeting specific entities, the manifesto addresses criticisms of some Ethereum layer-2 solutions prioritizing scalability over decentralization.
Sonic Labs Shifts Focus from Speed to Business Sustainability
Sonic Labs, behind the Sonic layer-1 blockchain, announced a strategic pivot from transaction speed to long-term value and token sustainability. Claiming industry-leading performance last year, the organization now prioritizes Ethereum and Sonic Improvement Proposals (EIPs/SIPs), token supply reductions, and revamped rewards. New CEO Mitchell Demeter stated: “Every decision we make moving forward will be guided by the principles of building real value, with price, growth, and sustainability always in focus.” He emphasized a fee monetization upgrade with tiered rewards for builders and fixed validator incentives, plus accelerated Sonic (S) token burns to tighten supply. Sonic boasts the world’s fastest Ethereum Virtual Machine (EVM) chain with 720-millisecond finality, ensuring irreversible transactions post-block addition.
DeFi Market Overview
Data from Cointelegraph Markets Pro and TradingView shows most of the top 100 cryptocurrencies by market cap ended the week down. Dash (DASH) led losses with a 45% drop, followed by Internet Computer (ICP) at over 27%. | Cryptocurrency | Weekly Change | |—————|—————| | Dash (DASH) | -45% | | Internet Computer (ICP) | -27% | Total value locked in DeFi remains a key metric, reflecting ongoing sector dynamics. How do you assess the impact of these ETF outflows and strategic shifts on Bitcoin’s trajectory heading into 2026?
