Cryptocurrency markets experienced a limited recovery this week as investor liquidity gradually returned after the holidays.
Bitcoin (BTC) topped a weekly high of $94,458 on Monday, before declining to about $90,937 at the time of writing on Friday.
US spot Bitcoin exchange-traded fund (ETF) demand saw a sharp reversal after $1.1 billion in inflows on the first two trading days of the new year. The ETFs have since logged three consecutive days of outflows, with a cumulative $398 million sold on Thursday, according to Farside Investors data.
In the broader cryptocurrency space, concerns arose over the future of privacy-preserving token Zcash (ZEC) after the main company behind the protocol, the Electric Coin Company, decided to separate from Bootstrap, the nonprofit that supports its development.
2025 crypto bear market “repricing” year for institutional capital
The steep decline in altcoins over the past year may reflect a broader reassessment of which blockchain networks are likely to attract long-term capital, as institutional investors begin a gradual, multiyear entry into the market, analysts said.
Excluding Bitcoin, 2025 turned out to be a bear market for the wider cryptocurrency market. Decentralized finance (DeFi) tokens fell 67%, while cryptocurrencies associated with smart contract blockchains delivered a negative average return of 66%, according to blockchain data shared by Jamie Coutts, chief crypto analyst at Real Vision.
The past year’s poor performance was a “repricing” of the leading crypto projects as institutional capital was seeking to gain more exposure, Coutts wrote in a Wednesday X post.
“Repricing the highest quality (network adoption, fundamentally sound) protocols/L1s, just as the multi-year onboarding of institutional capital commences,” he said.
Coutts is the latest analyst to highlight an ongoing repricing in how cryptocurrencies are valued as maturing digital asset investors seek exposure to tokens powering protocols with organic usage and revenue, not just general altcoins.
Looking at the past year, Solana was the leading blockchain by fees, with $585 million generated, while second was Tron with $576 million in revenue, according to crypto intelligence platform Nansen.
Institutional and large investors tend to gravitate to the five leading cryptocurrencies, according to Nicolai Sondergaard, research analyst at Nansen.
“Solana ETFs are still seeing inflows, but the same can’t fully be said onchain. ETH, on the other hand, has seen some players rotate from BTC,” the analyst told Cointelegraph, adding:
“Many expect that with liquidity coming back, big players prepare by accumulating, and this seems to be accurate based on onchain and offchain data.”
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Zcash backer Bootstrap says split due to clash over nonprofit, Zashi
Bootstrap, the nonprofit that supports the privacy-focused cryptocurrency Zcash, said a recent governance dispute that led to the departure of key board members stemmed from the legal limits nonprofits face when seeking outside investment.
The comments follow the decision by the Electric Coin Company, the main development team behind Zcash, to separate from Bootstrap and form a new company. ECC cited concerns over what it described as “malicious governance actions,” Cointelegraph reported Thursday.
In its official response, Bootstrap said the board members engaged in discussions regarding “external investment and alternative structures to privatize” Zashi, the self-custodial crypto wallet built for private Zcash transactions.
The board discussed “external investment and alternative structures to privatize Zashi, while working with legal counsel to ensure any path forward would comply with U.S. nonprofit law, remain consistent with the long-term mission of Zcash, and not jeopardize the broader Zcash community,” according to an announcement shared by board member Zaki Manian on Thursday.
Zashi was developed by ECC and launched on mobile platforms in early 2024. Its source code is publicly available, reflecting Zcash’s open-source model, under which no single entity owns or controls the protocol.
Bootstrap said the core disagreement stems from its fiduciary and legal obligations as a nonprofit organization registered under section 501(c)(3) of the US tax code.
The proposed deal could bring “new vulnerabilities for politically-motivated attacks on Zcash,” including a potential lawsuit from donors leading to unwinding the transactions, meaning that Zashi would be “transferred back to ECC,” the statement says.
Bootstrap added that these factors “jeopardize the entire Zcash ecosystem” and such…
cointelegraph.com