Bitcoin and major cryptocurrencies recovered this week after initial market shock from the US–Israel conflict with Iran. BTC slid to $63,245 on Sunday before rallying to about $73,000 on Thursday, helped by renewed demand for US-listed spot Bitcoin ETFs that recorded roughly $1.1 billion in net weekly inflows ahead of Thursday.
Aave Chan Initiative to exit Aave DAO after governance clash
The Aave Chan Initiative (ACI), a prominent governance delegate and service provider in the Aave ecosystem, announced it will not renew engagement with the Aave DAO and plans to wind down operations over the next four months. ACI founder Marc Zeller said the group will continue governance work and complete outstanding commitments before transferring infrastructure and responsibilities to the DAO or successor providers. ACI cited concerns about governance standards and voting dynamics during the proposal process as the reason for its exit, marking a major shift as Aave’s funding plan proceeds to the next stage.
Strive strategist says AI deflation could push Bitcoin to $11 million by 2036
Joe Burnett, Strive’s VP of Bitcoin strategy, published a report arguing that technological deflation from AI-driven productivity gains could pressure central banks into prolonged monetary expansion and drive Bitcoin to $11 million by Q1 2036. The forecast relies on aggressive assumptions, including Bitcoin growing to about 12% of global financial assets and global wealth compounding around 7% annually, implying a roughly 176-fold increase in Bitcoin’s market cap to near $230 trillion. Analysts cautioned the scenario is extreme: the implied CAGR (~53% p.a.) is very high and would require Bitcoin to become a dominant global reserve asset. Some analysts see a more realistic upside nearer $1 million, noting reduced volatility as liquidity and institutional adoption grow.
Stablecoin inflows rebound to $1.7 billion amid Washington yield debate
On-chain stablecoin activity picked up, with weekly net stablecoin inflows jumping to $1.7 billion — a 414.5% week-on-week increase, per Messari. The surge flipped the 30-day average to positive daily inflows (~$162.5 million). Transaction volumes rose modestly while average transaction sizes fell, indicating renewed issuance demand and stronger retail on-chain activity. The rebound follows a weaker period earlier in the year when inflows were far lower and several billion dollars flowed out over a recent 30-day span. The rise comes as US lawmakers and banking groups debate rules around third-party payment of stablecoin yields.
Solv Protocol offers 10% bounty after $2.7 million vault exploit
Solv Protocol, a Bitcoin-pegged DeFi platform, said one of its token vaults was drained for about $2.7 million. The project offered the attacker a 10% bounty for returning funds, said fewer than 10 users were affected, and pledged to cover a loss of 38.05 SolvBTC. Solv is investigating with security firms and implemented safeguards to prevent recurrence. Researchers reported the exploit likely came from a smart-contract vulnerability that allowed minting excessive token amounts; the attacker allegedly executed the exploit multiple times before swapping tokens for just over 38 SolvBTC. Solv claims to hold a large on-chain Bitcoin reserve and allows users to mint a Bitcoin-pegged token for use across other chains.
Bybit says AI-driven fraud system stopped $300 million in risky withdrawals
Bybit reported its AI-assisted risk monitoring framework blocked or disrupted more than $300 million in suspected scam-related withdrawals in Q4 2025. The exchange said the system flagged about $500 million in withdrawal requests, issued real-time risk alerts, and prevented completion of many transactions — leaving funds in users’ accounts after some voluntarily canceled withdrawals. Bybit also identified hundreds of high-risk addresses and blocked millions of credential-stuffing attacks during 2025, helping protect thousands of users.
DeFi market overview
Data from market trackers show most of the top 100 cryptocurrencies finished the week higher. The River (RIVER) token led gains with a roughly 94% increase, followed by Humanity Protocol (H) at about +39% for the week. Total value locked in DeFi and on-chain metrics showed renewed activity across protocols.
This summary covers the week’s major DeFi and crypto developments, including governance shifts, security incidents, regulatory debates, and market flows.
