This week, cryptocurrency markets staged a long-awaited recovery following four consecutive weeks of declines. Bitcoin (BTC) reclaimed the $90,000 psychological mark on Wednesday, providing relief for ETF holders who were once again back in profit as BTC traded above the key $89,600 flow-weighted cost basis of ETF buyers.
Bitcoin Recovery Fueled by Liquidity and Rate-Cut Optimism
The crypto rally was underpinned by expectations of renewed liquidity and potential interest rate cuts in the United States. Markets now price in an 85% probability of a 25 basis point Fed rate cut at the December 10 meeting, up from 39% a week prior, according to the CME Group FedWatch tool.
Cathie Wood, CEO and CIO of ARK Invest, reaffirmed the company’s $1.5 million Bitcoin bull-case prediction, citing billions in liquidity returning after the end of the US government shutdown. ARK Invest noted that $70 billion has already re-entered markets, with another $300 billion expected over the next five to six weeks as the Treasury General Account normalizes.
Additionally, the Federal Reserve’s scheduled end to quantitative tightening on December 1 is expected to pivot toward quantitative easing, creating supportive conditions for both crypto and equity markets.
“With liquidity returning, quantitative tightening ending December 1st, and monetary policy turning supportive, we believe conditions are building for markets to potentially reverse recent drawdowns,” ARK wrote in a post on X.
UK DeFi Tax Reform Eases Burden on Users
Across the Atlantic, the United Kingdom proposed a new DeFi tax framework aimed at aligning taxation with economic reality. HM Revenue & Customs (HMRC) outlined a “no gain, no loss” approach, deferring capital gains taxes on crypto lending and liquidity pool participation until tokens are sold.
Industry experts welcomed the proposal. Sian Morton from Relay Protocol called it a “meaningful step forward for UK DeFi users,” while Aave lawyer Maria Riivari highlighted the clarity it brings, ensuring DeFi transactions are not taxed until realized gains occur.
DWF Labs Launches $75 Million Fund for Institutional DeFi
Crypto market maker and Web3 investment firm DWF Labs announced a $75 million fund targeting decentralized finance projects with institutional-scale potential. The initiative will support blockchain projects building perpetual DEXs, decentralized money markets, and yield-bearing products across Ethereum, BNB Smart Chain, Solana, and Coinbase Base.
DWF Labs emphasized that the fund will not only provide capital but also strategic support, including liquidity provisioning, go-to-market guidance, and access to exchanges and market makers, reflecting the sector’s ongoing shift toward institutional adoption.
Balancer Hack Recovery Plan Proposed
Following the $116 million exploit on the Balancer protocol, community members submitted a proposal for distributing recovered funds. Approximately $28 million was recovered, with the plan covering $8 million from white-hat hackers and internal rescue teams.
The proposal recommends non-socialized reimbursements to affected liquidity pools on a pro-rata basis, paid in-kind in the original tokens to avoid price mismatches, underlining the importance of security and transparency in DeFi operations.
Nasdaq-listed Enlivex Bets $212 Million on Prediction Markets
Nasdaq-listed biotech firm Enlivex Therapeutics announced plans to raise $212 million to invest in Rain (RAIN), a decentralized prediction market on Arbitrum. The company cited first-mover advantage and the potential for long-term growth in decentralized finance as key motivators.
“We see prediction markets as one of the most exciting emerging sectors in the blockchain space,” said Enlivex Executive Chairman Shai Novik.
DeFi Market Overview
Data from Cointelegraph Markets Pro and TradingView showed that most of the 100 largest cryptocurrencies ended the week in the green. Highlights include the SPX6900 memecoin, which surged over 43%, and the Layer-1 blockchain Kaspa (KAS), up 39%.
This week’s crypto developments signal a potential turning point in the market, supported by macroeconomic liquidity, favorable regulatory updates, and growing institutional engagement. The sector continues to demonstrate resilience, innovation, and expansion into new investment avenues.