Ethereum (ETH) has staged a dramatic recovery, adding over $15 billion to its market capitalization in less than 24 hours in late February 2026. This surge, which pushed the asset back toward the $2,000 mark, follows a prolonged decline that saw ETH drop over 45% from its August 2025 highs to approximately $1,746 by February 6, 2026. Analysts attribute the rebound to a shift in institutional strategy, with large investors rotating capital back into Ethereum and its ecosystem, prioritizing projects with strong fundamentals, proven infrastructure, and deeper liquidity.
The recovery is seen as a potential market bottom formation, signaled by the massive single-day value addition and a significant drop in "open interest" following a $7 billion leverage collapse earlier in the month. This has left the market "cleaner," dominated by long-term holders and spot buyers rather than risky, debt-based positions.
Concurrently, the Mutuum Finance (MUTM) protocol is gaining significant momentum within this rejuvenated Ethereum ecosystem. The decentralized lending and borrowing platform has raised over $20.6 million in total funding, with its native MUTM token priced at $0.04 and held by more than 19,000 individual holders. The protocol's V1 version is live on the Sepolia testnet, where it has surpassed $150 million in Total Value Locked (TVL), and has undergone a security audit with Halborn.
Mutuum Finance operates on a dual-market mechanism: a Peer-to-Contract (P2C) model using automated liquidity pools for major assets like ETH and USDT, and a Peer-to-Peer (P2P) market for customized agreements, including for more volatile assets. The protocol allows users to borrow via over-collateralization while retaining full ownership of their underlying assets. Lenders supply assets to the protocol and receive yield-bearing mtTokens, which grow in value as borrowers repay interest-backed loans. A portion of protocol fees is used to buy back MUTM tokens from the open market and distribute them to mtToken stakers.
This expansion in DeFi activity contrasts with a contraction in institutional Bitcoin exposure. New regulatory 13F filings reveal that U.S. institutions reduced their Bitcoin ETF holdings by approximately 25,000 BTC (worth about $1.6 billion at the time) in Q4 2025. The biggest reductions came from investment advisors (cutting ~21,800 BTC) and hedge funds (cutting ~7,700 BTC), aligning with recent weeks of net ETF outflows. This divergence highlights a market where institutional positioning in large-cap assets like Bitcoin remains cautious even as development and on-chain activity within specific DeFi protocols accelerate.
