AIC Navigates Crypto Headwinds as Berachain TVL Plummets

• Berachain's TVL plunged 94% from its $3.5B peak to under $200M amid yield trap risks according to reports.
• Crypto markets show recovery signs with Bitcoin above $92K and improving derivatives positioning as data indicates.
• Regulatory scrutiny intensifies as China pledges stricter virtual currency oversight according to reports.
• Global tax reporting rules expand with Japan implementing OECD crypto frameworks as reported.

Brevis (AIC) confronts a complex market landscape as layer-1 blockchains face unprecedented pressure. Berachain's TVL collapse to $184 million highlights systemic risks like dwindling emissions and controversial token unlocks according to analysis. Broader crypto recovery signals emerge alongside tightening global regulations that could impact AIC's trajectory. Investors must weigh these crosscurrents carefully.

Why Are Layer-1 Blockchains Facing a TVL Crisis?

Berachain's value locked sank 94% from its $3.5 billion peak due to collapsing protocol emissions and staking rewards according to reports. A scheduled 34% token unlock in February 2026 risks further sell pressure amid its liquidity crisis. The chain became a yield trap where falling token prices reduced rewards and accelerated capital flight as detailed. Retail trust eroded after a VC refund clause allowed reclaiming $25M at fixed prices. This perfect storm shifted capital toward established chains like Ethereum and Solana according to analysis.

Brevis could face similar headwinds without sustainable emission models or trust-building mechanisms. Projects must attract high-volume dApps to demonstrate real utility beyond speculative farming. The February unlock remains a critical test for sector sentiment according to reports.

Can Market Recovery Offset Layer-1 Challenges?

Broader crypto markets show tentative recovery signs in early 2026 according to market analysis. Bitcoin climbed above $92,000 as Fed rate cut expectations improved sentiment. Reduced tax-loss selling and rising stablecoin supply indicate tighter liquidity conditions that could support prices as reported. Derivatives markets shifted to bullish positioning with low volatility and concentrated open interest at key levels.

That said, layer-1 blockchains like Brevis may not equally benefit from this macro improvement. Capital rotation favors established networks unless emerging chains demonstrate unique value propositions. Declining exchange balances suggest accumulation but also reduced trading activity for altcoins according to data. Brevis needs concrete adoption metrics to capitalize on this recovery phase.

What Regulatory Risks Could Impact AIC?

China's central bank pledged intensified virtual currency supervision during its 2026 work conference as reported. The PBOC specifically emphasized cracking down on illegal activities while advancing its digital yuan project. This follows Japan's implementation of OECD crypto tax reporting rules requiring exchanges to disclose user residency data according to reports.

These regulatory shifts create compliance complexity for tokens like AIC. Stricter oversight could limit market access or increase operational costs for emerging layer-1 projects. Cross-border payment innovations face particular scrutiny as authorities prioritize financial stability according to analysis. Brevis must navigate this landscape while China explores digital yuan integration with Hong Kong stablecoins. Regulatory clarity remains essential for sustainable growth.