Institutional investments and DeFi repurchases drive a careful crypto recovery in Q4

The digital asset sector is showing signs of a possible recovery in the fourth quarter, fueled by institutional investments in Ethereum-focused ETFs and assertive token buyback and burn campaigns among major DeFi platforms. These factors, along with increasing confidence from large investors, are reviving optimism in an industry that has experienced notable turbulence throughout the year.

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ETFs have attracted significant capital, with institutional investments surpassing $30 billion projected for 2025. Experts link this momentum to Ethereum’s leadership in decentralized finance, its active developer community, and the Pectra upgrade, which improved wallet features and staking options. These ETFs have enhanced Ethereum’s liquidity and appeal to institutions, solidifying its reputation as a premier digital asset. For instance, Ethereum’s total value locked (TVL) remains above $100 billion, highlighting its importance as a backbone for institutional-level DeFi solutions.

Several prominent DeFi platforms, such as

(WLFI), Sky, Hyperliquid, and , have rolled out token buyback and burn programs to help stabilize token values and incentivize long-term investors. These approaches are designed to decrease the available token supply, fostering value through scarcity. , a project with support from Trump, recently enacted a full buyback initiative after its price fell by 58% in September. The team committed to using treasury liquidity fees from Ethereum, BNB Chain, and to repurchase tokens, which are then permanently destroyed. Comparable actions by Hyperliquid and Jupiter have already eliminated tens of millions of tokens, with Hyperliquid’s $1.5 billion in buybacks since mid-2025 serving as an example of sustained demand.

The introduction of buyback schemes has led to varied opinions. Supporters believe that lowering supply supports long-term value growth, while skeptics argue these measures may not resolve core challenges like ecosystem expansion and innovation. For example, WLFI’s token model has yet to be proven against wider market forces, and its price rebound has been limited. Nevertheless, the openness of on-chain burn records and community voting—such as WLFI’s 99.8% approval—has helped strengthen investor trust.

Institutional players are increasingly backing these tactics, seeing them as ways to help stabilize alternative coin prices and improve liquidity. For instance, Sky’s $75 million in token burns since February 2025 has increased its governance power, while Jupiter’s three-year token lockups have brought more predictability for stakeholders. At the same time, cross-chain activity continues to be a major catalyst, with Ethereum’s layer-2 networks (like

, Optimism) tackling scalability issues, and Solana’s fast speeds and low transaction costs drawing in retail users and NFT projects.

Despite these encouraging signs, obstacles remain. Ethereum’s high transaction fees, even with layer-2 solutions, still hinder broader retail use, and Solana’s outages in 2025 have raised questions about its reliability. Regulatory attention on token burns and staking incentives could also create uncertainty. Still, with growing institutional participation and the adoption of scarcity-based DeFi mechanisms, the outlook for the crypto market in Q4 is cautiously positive. Analysts suggest Ethereum could approach $8,000 in a bullish scenario, while Solana might reach $500, fueled by its AI and DeFi advancements.