The cryptocurrency market faced an unprecedented decline in February, with a staggering 20.2% drop reported by Binance Research. This downturn stands as one of the most severe in recent history, erasing billions from the market and severely impacting millions of participants. Influential events such as a new 25% tariff imposed by President Trump on imports from Mexico and Canada, along with a historic hacking incident at Bybit, contributed to this financial turmoil.
What Happened During the Bybit Hack?
On February 21, 2025, Bybit suffered a catastrophic hacking incident, losing $1.46 billion in cryptocurrency to a North Korean hacker group. The attackers exploited a phishing scheme aimed at the wallet’s developers, compromising Bybit’s cold storage. This breach led to an overwhelming number of withdrawal requests, totaling over 350,000 within just 12 hours.
How Did Tariff Announcements Impact Markets?
The 25% tariff announcement by President Trump triggered widespread panic among investors, prompting a mass exodus from riskier assets. Consequently, the cryptocurrency market’s total capitalization witnessed a sharp decline, plummeting from $3.6 trillion to $2.8 trillion.
Significant takeaways from February’s crypto landscape include:
- A 20% decrease in Ethereum’s price and a boost in Bitcoin‘s market share to 59.6%.
- A substantial outflow of $485 million from Solana‘s network, leading to reduced trading activities for respective meme projects.
- Stablecoins and Real World Asset projects gained traction, with stablecoins rising by 10% to $224 billion.
- Ethereum’s NFT market saw a 38.2% drop in volume, marking the lowest unique user engagement since April 2021.
Despite the tumultuous events, some segments, such as stablecoins, experienced growth, suggesting mixed outcomes in the face of adversity. The ongoing regulatory updates appear to be shifting investor interests, steering them toward more stable avenues.
