Weekly Market Outlook – January 19, 2026

Weekly Crypto Market News: DeFi Infrastructure, Regulation & Capital Flows

January 12 – 18, 2026

Edge Capital’s weekly assessment of crypto markets, regulation, capital flows, and protocol developments across digital assets.

Executive Summary

  • Funding totaled $333M across 29 projects, led by Alpaca’s $150M Series D, with continued capital allocation toward brokerage infrastructure, stablecoin liquidity, and security primitives. M&A activity focused on regulated rails, payments, and wallet infrastructure.
  • DeFi activity centered on trading and lending infrastructure, including new perps venues, stablecoin incentives, protocol upgrades, OP buybacks, mobile trading access, and ecosystem level incentive programs, alongside early stage token launches and airdrop mechanics.
  • Coinbase’s opposition to the Senate’s crypto market structure bill delays legislative momentum, prolongs SEC–CFTC ambiguity, and tempers expectations for near‑term regulatory clarity in U.S. digital assets.
  • Dubai’s regulator banned privacy tokens from regulated venues in the DIFC, reinforcing compliance driven exclusions in institutional crypto markets while leaving private ownership and unregulated activity unaffected.

Venture Capital & M&A Pulse

Headline: 29 projects raised $333M total.

Top Raises

  • Alpaca ($150M Series D) – Brokerage infrastructure APIs serving institutional partners
  • VelaFi ($20M Series B) – Stablecoin powered financial infrastructure for global businesses
  • Project Eleven ($20M Series A) – Quantum resistant security infrastructure for blockchains
  • Konnex ($15M Strategic) – Decentralized markets protocol for autonomous systems
  • Noise ($7.1M Seed) – Trading platform for relevance and cultural trends
  • Meld ($7M Strategic) – Global stablecoin and digital asset liquidity network
  • Neuramint ($5M Seed) – AI agents for autonomous Web3 workflows

M&A Highlights

DeFi Launch Radar

Protocol & Chain Releases

Dango launched its mainnet alpha, introducing a new onchain trading venue focused on low latency execution and composable market primitives.

Kinetiq launched a new perpetuals DEX with an orderbook based design targeting high frequency onchain trading.

New Feature Rollout

Jupiter activated incentives for JupUSD, its native stablecoin, to bootstrap adoption across lending and liquidity venues.

Superlend released V2 with improved capital efficiency, isolated risk markets, and enhanced liquidation mechanics.

Optimism initiated OP buybacks using protocol revenue as part of its long term token alignment strategy.

Lighter released its mobile application, extending access to its perps and trading stack beyond desktop.

Ecosystem Expansions

X banned InfoFi related content, impacting distribution and visibility for onchain financial data platforms.

Token Launches

Mezo opened registration ahead of its token launch, enabling users to qualify through protocol usage and participation.

DAO governed treasury launched to allocate capital across robotics focused onchain and offchain markets.

Token Unlocks & Airdrops

Token Unlocks

According to Tokenomist:

  • One-time large token unlocks (exceeding $5 million) in the next 7 days include BGB, ZRO, RIVER, PLUME, H, UDS, XPL, MBG, SOSO, SOON, ANIME, etc.;
  • Linear large unlocks (daily amounts exceeding $1 million) include RAIN, SOL, RIVER, TRUMP, WLD, DOGE, AVAX, ASTER, etc., with total unlock value exceeding $1.054 billion.

Airdrops

Fogo launched its airdrop checker as part of its token rollout process following mainnet genesis.

Last Week Highlights

Coinbase Policy Pushback

Coinbase has withdrawn support for the Senate’s draft crypto market structure bill, arguing the current text is worse than the status quo. CEO Brian Armstrong highlighted concerns around tokenized equities, DeFi, stablecoins, and agency balance, and said he would rather see no law than a flawed framework. The move came just before a scheduled markup, contributing to a postponement and underscoring how critical industry backing has become for moving complex digital asset legislation.

Structural Design Faults

Coinbase’s main objections center on substantive design features of the bill, not on the concept of federal crypto legislation itself. The draft is criticized for effectively banning tokenized equities, introducing restrictive language on DeFi, expanding government access to user financial data, and curbing stablecoin rewards in ways that favor banks over crypto platforms.

From Coinbase’s perspective, the bill also mishandles the division of labor between the SEC and CFTC. Critics argue it would erode CFTC authority over core market‑structure questions while reinforcing a more enforcement‑driven SEC regime, blunting one of the industry’s key reasons for supporting legislation in the first place. This combination turns what was meant to be a clarity exercise into a perceived tightening of constraints on tokenization, DeFi, and yield‑bearing stablecoin products.

Policy Overhang Risk

In the near term, Coinbase’s stance reduces the probability of a quick compromise and has already contributed to delaying committee action, suggesting a slower path for comprehensive federal crypto rules. This keeps large U.S. exchanges and DeFi participants operating under overlapping enforcement‑first frameworks, discouraging aggressive product innovation in areas like tokenized securities and consumer stablecoin yields.

At the structural level, the episode leaves the SEC–CFTC boundary unsettled, with no durable settlement on which tokens sit where, and under what standards. For markets, that means continued jurisdictional risk embedded in U.S. listings, product design, and cross‑border flows, with global venues and non‑U.S. regulators gaining relative influence as Washington’s legislative process stalls.

Dubai Restricts Privacy Tokens on Regulated Venues

Regulatory Action in the DIFC

Dubai’s financial regulator has formally prohibited privacy-focused cryptocurrencies from regulated exchanges operating within the Dubai International Financial Centre. The ruling, issued by the Dubai Financial Services Authority and effective January 12, bans trading, promotion, and fund activity involving privacy tokens such as Monero and Zcash on DIFC-licensed platforms. The restriction applies to regulated financial services only. Individuals remain permitted to hold privacy assets in private wallets outside regulated venues.

Compliance Rationale and Scope

The DFSA cited anti-money-laundering and sanctions compliance risks as the basis for the ban. Privacy tokens and related tools, including mixers such as Tornado Cash, were explicitly referenced due to their transaction-obfuscation features. The policy reflects a regulatory preference for traceability and auditability within supervised financial systems, while stopping short of prohibiting private ownership or peer-to-peer use.

Global Context and Policy Debate

The decision reopens a broader debate over privacy and regulation in crypto markets. At a December roundtable hosted by the U.S. Securities and Exchange Commission’s Crypto Task Force, Commissioner Hester Peirce argued that privacy should not be treated as an inherent signal of criminal activity and that financial surveillance frameworks may need to evolve as digital asset adoption grows. Scrutiny of privacy tools has intensified since the 2025 conviction of Tornado Cash co-founder Roman Storm, raising unresolved questions around legal liability for developers of open-source, non-custodial software.

Implications for Regulated Crypto Markets

The episode highlights a persistent structural tension in digital asset markets. As regulated venues increasingly exclude privacy-preserving assets to meet compliance standards, demand continues to express itself through price performance and unregulated channels. The result is a growing divergence between where institutions are permitted to operate and where market interest remains strongest, reinforcing the trade-off between regulatory clarity and the original privacy ethos of crypto networks.

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