Bitcoin recovery meets DeFi tensions as Aave rift deepens: Finance Redefined
Bitcoin and leading cryptocurrencies staged a recovery this week after initial shockwaves from the outbreak of the US-Israel conflict with Iran. Bitcoin initially fell to $63,245 on Sunday before briefly recovering to $73,000 on Thursday, supported by $1.1 billion in net weekly inflows into US-listed spot Bitcoin ETFs.
In the broader DeFi space, Aave’s governance dispute escalated as the Aave Chan Initiative (ACI) announced it would exit the Aave DAO within four months due to concerns over governance standards and voting dynamics. Meanwhile, Strive strategist Joe Burnett predicted that AI-driven technological deflation could push Bitcoin to $11 million by 2036, assuming it becomes a dominant global reserve asset.
Stablecoin activity saw a rebound, with weekly net inflows hitting $1.7 billion, a significant week-on-week increase. However, security challenges persisted as Solv Protocol reported a $2.7 million vault exploit, offering a 10% bounty for the return of funds. Conversely, Bybit reported its new fraud system successfully blocked over $300 million in suspicious withdrawal requests during Q4 2025. The DeFi market saw mixed results among the top 100 cryptocurrencies, with River (RIVER) emerging as the week's top gainer with a 94% increase.
