Cryptocurrency markets tumbled this week as investor concern over stagnant U.S. liquidity intensified after President Trump nominated Kevin Warsh to lead the Federal Reserve. Bitcoin exchange-traded funds recorded three consecutive days of outflows, including $431 million withdrawn on Thursday, according to Farside Investors. Bitcoin briefly dipped to $60,074 on Friday before recovering to above $64,930 (7:49 a.m. UTC).
Warsh, a former Fed governor (2006–2011), is seen as likely to continue a path toward eventual rate cuts but not an aggressive expansion of liquidity. Thomas Perfumo, an economist at Kraken, suggested the nomination may indicate liquidity will “stabilize rather than meaningfully expand.” The market also felt the effects of a major derivatives purge on Jan. 31, when CoinGlass data shows more than $2.56 billion in leveraged positions were liquidated.
TRM Labs closes $70M round, reaches $1B valuation
Blockchain intelligence firm TRM Labs raised $70 million in a Series C that values the startup at $1 billion, granting it crypto-unicorn status. The round was led by early backer Blockchain Capital and included participation from Goldman Sachs, Bessemer Venture Partners, Brevan Howard Digital, Thoma Bravo, Citi Ventures and Galaxy Ventures. TRM uses AI-powered blockchain analytics to help public and private entities detect illicit automated activity and cybercrime. CEO and cofounder Esteban Castaño said the funding will accelerate work with institutions on high-consequence threats and expand AI capabilities to protect critical systems.
Avalanche tokenization surges as BlackRock’s BUIDL scales onchain
Institutional tokenization on Avalanche jumped in Q4, driven by tokenized money market funds, loans and indexes. Messari reported that real-world asset TVL on Avalanche climbed 68.6% in Q4 2025 and almost 950% year-over-year to top $1.3 billion, boosted by BlackRock’s $500 million USD Institutional Digital Liquidity Fund (BUIDL) launched in November. Additional momentum came from FIS partnering with Avalanche-based Intain to launch tokenized loans and Intain enabling roughly 2,000 U.S. banks to securitize over $6 billion in loans on Avalanche. S&P Dow Jones teamed with Dinari to launch the S&P Digital Markets 50 Index, tracking 35 crypto-linked equities and 15 crypto tokens on the chain. The activity suggests traditional finance is increasingly experimenting with tokenization as regulatory clarity progresses.
ParaFi backs Jupiter with $35M strategic investment
Solana-based aggregator Jupiter secured a $35 million strategic investment from ParaFi Capital, the protocol’s first outside capital after years of bootstrapped growth. The purchase was settled in Jupiter’s JupUSD stablecoin, with an extended lockup and warrants allowing ParaFi to acquire more tokens later to align long-term incentives. Jupiter has processed over $1 trillion in trading volume in the past year and has expanded into perpetuals, lending and stablecoins. Its native token (JUP) rose about 9% in the 24 hours reported by CoinGecko.
Aave pares back Avara, winds down Family wallet
Aave Labs announced it is retiring the Avara umbrella brand to refocus on core decentralized finance products. The decision includes winding down the Apple iOS Family wallet, which the team said was not the right product to onboard mass users at scale. Stewardship of Lens has been transferred to Mask Network, with Aave reducing its role there to advisory while concentrating resources on Aave’s DeFi offerings.
Step Finance treasury breach drains ~$27M in SOL
Step Finance disclosed a security incident in which several treasury wallets were compromised during APAC hours. Onchain analysis from CertiK indicates about 261,854 SOL (roughly $27.2 million) was unstaked and moved from Step-controlled wallets. The team has not yet confirmed the full extent of losses, the breach vector, or whether user funds were affected beyond protocol-owned assets. The disclosure triggered a steep sell-off in STEP, which plunged about 90%.
DeFi market snapshot
Data from Cointelegraph Markets Pro and TradingView showed most of the top 100 cryptocurrencies ended the week lower. Zcash (ZEC) led weekly losses among the top 100, down roughly 35%, followed by Story (IP) falling about 34%.
Thanks for reading this roundup of the week’s notable crypto and DeFi developments. This report was produced under Cointelegraph’s editorial standards aiming for independent, transparent coverage; readers are encouraged to verify details independently.