Concerns over a global trade war, ignited by US tariffs, led to significant volatility in the crypto markets, resulting in over $10 billion in liquidations within 24 hours on February 3. Despite this downturn, investments continued to flow into the crypto sector, exemplified by the launch of a $88.88 million ecosystem fund by the 0G Foundation aimed at enhancing AI-driven decentralized finance (DeFi) applications. Bybit's CEO estimates that liquidations could be as high as $10 billion, with $2.1 billion from Bybit alone. Meanwhile, Solana's application revenues surged by 213% in Q4 2024, primarily fueled by memecoin trading. In an effort to address liquidity issues, THORChain decided to convert its defaulted debt into equity following community proposals. Furthermore, Federal Reserve Governor Christopher Waller expressed support for regulated stablecoins, suggesting they could solidify the US dollar's global position. Overall, the DeFi market experienced notable losses, with most major cryptocurrencies seeing declines over the week.

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