Many Labour MPs have been left shellshocked after the chaotic political self-sabotage of the past week.

Bafflement, anger, disappointment, and sheer frustration are all on relatively open display at the circular firing squad which seems to have surrounded the prime minister.

The botched effort to flush out backroom plotters and force Wes Streeting to declare his loyalty ahead of the budget has instead led even previously loyal Starmerites to predict the PM could be forced out of office before the local elections in May.

“We have so many councillors coming up for election across the country,” one says, “and at the moment it looks like they’re going to be wiped out. That’s our base – we just can’t afford to lose them. I like Keir [Starmer] but there’s only a limited window left to turn things around. There’s a real question of urgency.”

Another criticised a “boys club” at No 10 who they claimed have “undermined” the prime minister and “forgotten they’re meant to be serving the British people.”

There’s clearly widespread muttering about what to do next – and even a degree of enviousness at the lack of a regicidal 1922 committee mechanism, as enjoyed by the Tories.

“Leadership speculation is destabilising,” one said. “But there’s really no obvious strategy. Andy Burnham isn’t even an MP. You’d need a stalking horse candidate and we don’t have one. There’s no 1922. It’s very messy.”

Others are gunning for the chancellor after months of careful pitch-rolling for manifesto-breaching tax rises in the budget were ripped up overnight.

“Her career is toast,” one told me. “Rachel has just lost all credibility. She screwed up on the manifesto. She screwed up on the last two fiscal events, costing the party huge amounts of support and leaving the economy stagnating.

“Having now walked everyone up the mountain of tax rises and made us vote to support them on the opposition day debate two days ago, she’s now worried her job is at risk and has bottled it.

“Talk to any major business or investor and they are holding off investing in the UK until it is clear what the UK’s tax policy is going to be, putting us in a situation where the chancellor is going to have to go through this all over again in six months – which just means no real economic growth for another six months.”

Read more:
Starmer and Reeves ditch plans to raise income tax
Former chancellor Osborne is shock contender to head HSBC

After less than 18 months in office, the government is stuck in a political morass largely of its own making.

Treasury sources have belatedly argued that the chancellor’s pre-budget change of heart on income tax is down to better-than-expected economic forecasts from the Office for Budget Responsibility.

That should be a cause of celebration. The question is whether she and the PM are now too damaged to make that case to the country – and rescue their benighted prospects.

People granted asylum in the UK will only be allowed to stay in the country temporarily, in sweeping reforms expected to be announced on Monday.

Modelled on the Danish system, the aim is to make the UK less attractive for illegal immigrants and make it easier to deport them.

Planned changes mean that refugee status will become temporary and subject to regular review, with refugees removed as soon as their home countries are deemed safe.

Under current UK rules, those granted refugee status have it for five years and can then apply for indefinite leave to remain and get on a route to citizenship.

In a social media video trailing her announcement, Home Secretary Shabana Mahmood said: “We will always be a country that gives sanctuary to people who are fleeing danger, but we must restore order and control.”

She called it “the most significant changes to our asylum system in modern times”.

An ally of the home secretary said: “Today, becoming a refugee equals a lifetime of protection in Britain.

“Mahmood will change that, making refugee status temporary and subject to regular review. The moment your home country is safe to return to, you will be removed.

“While this might seem like a small technical shift, this new settlement marks the most significant shift in the treatment of refugees since the Second World War.”

Time and money ‘wasted’ on Rwanda scheme

While the number of asylum claims across Europe has fallen, numbers in Britain have risen.

Ms Mahmood said the previous government had had “years to tackle this problem” but had “wasted” time and money on the £700m Rwanda scheme.

Read more: Could Danish model save Labour’s bacon?

Some 39,075 people have arrived in the UK after making the journey across the Channel so far this year, according to the latest Home Office figures.

That is an increase of 19% on the same point in 2024 and up 43% on 2023, but remains 5% lower than at the equivalent point in 2022, which remains the peak year for crossings.

Other changes expected to be announced on Monday include requiring judges to prioritise public safety over migrants’ rights to a family life, or the risk that they will face “inhuman” treatment if returned to their home country, the Telegraph has reported.

Denmark’s tighter rules on family reunions are also being looked at.

Read more politics news:
Under-fire Starmer aide won’t quit
Plans to raise income tax in budget ditched

Changes will prevent refugees from ‘integrating into British life’

While some research has suggested that deterrence policies have little impact on asylum seekers’ choice of destination, but a 2017 study said Denmark’s “negative nation branding” had proved effective in limiting asylum applications.

The number of successful asylum claims has fallen to a 40-year low in Denmark, with 95% of failed asylum seekers deported from the country.

But some believe the changes could damage future generations seeking a haven from war, persecution and violence.

Enver Solomon, chief executive of Refugee Council, said: “These sweeping changes will not deter people from making dangerous crossings, but they will unfairly prevent men, women and children from putting down roots and integrating into British life.

“Refugee status represents safety from the conflict and persecution that people have fled.

“When refugees are not stuck in limbo, they feel a greater sense of belonging, as full members of their new communities with a stable future for themselves, their children and generations to come.

“We urge the government to rethink these highly impractical plans, which will also add to the backlog and chaos that the Home Office is tackling.

“Instead, they should ensure that refugees who work hard and contribute to Britain can build secure, settled lives and give back to their communities.”

Shabana Mahmood will be appearing on Sunday Morning with Trevor Phillips from 8.30am tomorrow.

Cryptocurrency markets have extended their decline despite much-awaited political developments taking place in the US.

On Wednesday, President Donald Trump signed a funding bill to end the record 43-day US government shutdown, after the bill passed through the Senate on Monday and was approved by the House of Representatives on Wednesday.

The bill provides funding to the government until Jan. 30, 2026, and gives Democrats and Republicans more time to strike a deal on broader funding plans for the year ahead.  

The end of the shutdown failed to lift demand among Bitcoin (BTC) exchange-traded fund (ETF) buyers. Spot BTC ETFs saw a brief resurgence on Tuesday, attracting $524 million in inflows, but outflows quickly resumed, with a whopping $866 million in daily net outflows on Thursday, according to Farside Investors.

Bitcoin fell to a six-month low of $95,900 on Friday, a level last seen in May as its biggest demand drivers continued to lack momentum.

Investments from ETFs and Michael Saylor’s Strategy were the two main vehicles driving demand for Bitcoin’s price this year, according to Ki Young Ju, founder and CEO of crypto analytics platform CryptoQuant.

Bitcoin ETF demand stalls as US shutdown optimism fails to lift sentiment

The lack of demand for spot Bitcoin ETFs is raising concerns about Bitcoin’s prospects for the rest of the year.

On Monday, the US Senate approved the funding bill and brought Congress a step closer to ending the shutdown. The legislation headed for a full vote in the House of Representatives, which occurred on Wednesday.

Despite optimistic news from the US, spot Bitcoin ETF investments remained flat on Monday, with just $1.2 million of inflows, according to data from Farside Investors.

“Despite the US shutdown seemingly ending, and the S&P and Gold bouncing hard, Bitcoin ETFs saw NO bid yesterday,” said Capriole Investments founder, Charles Edwards, adding that this is not a dynamic we want to see continue.

“Risk assets usually see a strong bid in the weeks out of the Shutdown. Still time to turn this ship around, but it needs to turn,” Edwards wrote in a Tuesday X post.

Spot Bitcoin ETF inflows were the primary driver of Bitcoin’s momentum in 2025, Standard Chartered’s global head of digital assets research, Geoff Kendrick, told Cointelegraph recently.

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Bitwise exec says 2026 will be crypto’s real bull year; here’s why

Bitwise chief investment officer Matt Hougan is more confident that crypto markets will boom in 2026, particularly as there hasn’t been a late 2025 rally.

Speaking to Cointelegraph at The Bridge conference in New York City on Wednesday, Hougan said a crypto market rally at the end of 2025 would have fit the four-year cycle thesis, meaning 2026 would mark the start of a bear market, similar to 2022 and 2018.

When asked to revise his prediction about whether the crypto market will boom in 2026, Hougan said: “I’m actually more confident in that quote. The biggest risk was [if] we ripped into the end of 2025 and then we got a pullback.”

Hougan said interest in the Bitcoin debasement trade, stablecoins and tokenization would continue to accelerate, while arguing that Uniswap’s fee switch proposal introduced on Monday would reinvigorate interest in decentralized finance protocols in the coming year.

“I think the underlying fundamentals are just so sound,” Hougan said. “I think these earlier forces, institutional investment, regulatory progress, stablecoins, tokenization, I just think those are too big to keep down. So I think 2026 will be a good year.”

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Arthur Hayes tells Zcash holders to withdraw from CEXs and “shield” assets

The privacy coin sector returned to the spotlight after BitMEX co-founder Arthur Hayes urged Zcash holders to withdraw their assets from centralized exchanges (CEXs). 

On Wednesday, Hayes told holders to “shield” their assets, a feature that enables private transactions within the Zcash network. “If you hold $ZEC on a CEX, withdraw it to a self-custodial wallet and shield it,” Hayes wrote on X.

The comments came as Zcash (ZEC) saw sharp price swings in the last few days. The token rallied to $723 on Saturday before dropping to $504 on Sunday. It then surged to a high of $677 on Monday, only to see another sharp decline. At the time of writing, ZEC was trading at about $450, marking a 37% decline from its Saturday high. 

Analysts had warned that ZEC might undergo a sharp correction due to its relative strength index (RSI) reaching its highest reading after continuing to rally above its overbought zone. 

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Vitalik Buterin champions decentralization in “Trustless Manifesto”

Ethereum co-founder Vitalik Buterin has authored and signed the new “Trustless Manifesto,” which seeks to uphold core values of decentralization and censorship resistance and push builders to refrain from adding intermediaries and checkpoints for the sake of adoption.

The Trustless Manifesto, also authored by Ethereum Foundation researchers Yoav Weiss and Marissa Posner, said crypto platforms sacrifice trustlessness from the first moment that they integrate a hosted node or centralized relayer, explaining that while it feels harmless, it becomes a habit, and with each passing checkpoint, the protocol becomes less and less permissionless.

“Trustlessness is not a feature to add after the fact. It is the thing itself,” the Ethereum Foundation members said in the manifesto published Wednesday. “Without it, everything else — efficiency, UX, scalability — is decoration on a fragile core.”

“When complexity tempts us to centralize, we must remember: every line of convenience code can become a choke point.”

While the manifesto wasn’t aimed at any particular person or company, some Ethereum layer 2s have been criticized for sacrificing decentralization to focus on scalability to speed up adoption.

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Sonic Labs pivots from speed to survival with business-first strategy

Sonic Labs, the organization behind the Sonic layer-1 blockchain, announced a major strategic shift as it pivots from emphasizing transaction speed to building long-term business value and token sustainability.

After claiming industry-leading performance last year, Sonic Labs said its next chapter will focus on upgrades that deliver measurable financial outcomes, including new Ethereum and Sonic Improvement Proposals (EIPs and SIPs), token supply reductions and revamped rewards for network participants.

“Every decision we make moving forward will be guided by the principles of building real value, with price, growth, and sustainability always in focus,” said Mitchell Demeter, the new CEO of Sonic Labs. 

The focus aims to bring “measurable, lasting value” for builders, validators and tokenholders, wrote Demeter in a Tuesday X post. “Our mission at Sonic is to move beyond hype and build a sustainable business model for a layer one, that creates, captures, and returns real value to tokenholders.”

The new fee monetization upgrade will include a tiered reward system for builders and fixed rewards for validators.

Sonic Labs will also increase the rate of programmatic Sonic (S) token burns, which means permanently removing tokens from circulation to tighten the supply.

Sonic claims to be the world’s fastest Ethereum Virtual Machine (EVM) chain, with a “true” finality of 720 milliseconds (ms) — the assurance that a transaction is irreversible, which occurs after it is added to a block on the blockchain ledger.

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DeFi market overview

According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the red.

The privacy-preserving Dash (DASH) token fell 45% to stage the biggest decline in the top 100, followed by the Internet Computer (ICP) token, down over 27% on the weekly chart.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.