Dragonfly Capital closed its fourth $650 million fund in a venture environment described as a “mass extinction event,” signaling that institutional backing for select crypto managers persists. Data from Binance Research, Keyrock, Animoca Brands Research, Memento Research, and Tokenomist show how low-float, high-FDV token launches and large unlock schedules have driven systematic dilution and price pressure. While some projects like Backpack, Jupiter, and USDai experiment with KPI-based unlocks, revenue-linked buybacks, or fully transparent token sales, others face heavy overhang from insider unlocks and thin liquidity. Whether new VC capital flows into token-heavy structures or fintech rails without tokens will shape how much of this funding actually benefits liquid crypto assets.

In early 2026, several high-profile crypto leaders, including Akshay BD from Solana, Anthony Rose from zkSync, and Kyle Samani of Multicoin, announced moves into AI or other domains, raising concerns about a leadership drain. Data from Electric Capital shows overall monthly active crypto developers fell about 7% year over year in 2024, while experienced contributors with at least two years in the space grew 27%. Industry figures argue this reflects cyclical churn and leadership reshuffles rather than a collapse in core builders, as regulatory clarity around stablecoins and convergence with AI create new incentives for hybrid financial infrastructure.

On Feb. 11, Bitcoin contributors merged BIP-0360, introducing the Pay-to-Merkle-Root output to the BIPs repository. The draft neither upgrades nodes nor sets activation, but proposes removing Taproot's key-path to limit long-exposure risk from on-chain public keys. P2MR would raise spend size (minimum 103 bytes vs 66) and reduce privacy, making any future shift strictly opt-in.

Bitcoin jumped from about $60,000 to over $70,000 within a day after a sharp selloff that had erased roughly 14% and liquidated around $1 billion in leveraged positions. The recovery followed a broad macro rebound across equities and precious metals, but derivatives and options positioning still indicate heavy demand for downside protection and sizable put interest around the $60,000–$50,000 area.

On Feb. 5, a wallet labeled as World Liberty Financial on Arkham Intelligence withdrew about 73 WBTC and 100 WBTC from Aave V3 and sold them to repay $11.75 million in stablecoin liabilities. The address, whose ownership is not confirmed, now shows a health factor of 1.54, with roughly 13,298 WETH and 167 WBTC posted against $18.47 million in variable-rate USDC debt.

Bitcoin's drop to $60,233 before a rebound to $65,443 has pushed eight pure-play Bitcoin treasury companies close to $10 billion in combined unrealized losses on more than 850,000 BTC. Strategy, Metaplanet, and Twenty One Capital are among the hardest hit, and scenario analysis shows Strategy's paper losses could total $27.14 billion if Bitcoin falls to $38,000. Market-to-net-asset-value discounts, ETF outflows, and reflexive financing pressures are amplifying the stress across these highly leveraged balance sheets.

Trend Research, led by Jack Yi, built a heavily leveraged Ethereum position on Aave that at its peak involved roughly $958 million in borrowed stablecoins against about 601,000 ETH. As Ethereum's price slid in early February, the fund began selling ETH and repaying debt, including a 10,000 ETH transfer to Binance on Feb. 4 to cut risk. The remaining 488,172 ETH is now valued near $1.05 billion, with on-chain data indicating unrealized losses of around $862 million since the end of January and multiple liquidation thresholds that could impact broader market liquidity.

On Feb. 3, Bitcoin briefly dropped about 8%, undercutting the $73,000 level before rebounding toward $74,500 and trimming the intraday decline to 5.8%. The move coincided with macro risk-off sentiment tied to Kevin Warsh's Fed chair nomination and disappointing Microsoft Azure growth, while more than $2.5 billion in liquidations and thin weekend liquidity amplified the selloff. Bitcoin is now trading around key support between roughly $72,700 and $73,500, with resistance clustered from about $74,500 up to the $80,620 zone.

In 2025 Q3, the IMF reports the renminbi at 1.93% of global FX reserves, about $251 billion within a $13 trillion pool, while the dollar holds 56.92%. Amid capital controls, Chinese traders and exporters increasingly use USDT and Bitcoin, and stablecoins in circulation exceed $305 billion, according to Artemis.