Crypto Market Meltdown

The crypto market is in a full-scale meltdown, with $325 billion in market cap wiped out since Friday morning. The largest drop saw $100 billion disappear within one hour.

There were no major headlines covering the sudden crash, making it seem inconsequential, as if the market’s decline went unnoticed.

Even meme coins, which had previously thrived, have suffered severe losses. Liquidity has dried up across the board, raising concerns about further downturns.

The sell-off started with the Bybit hack on February 21, executed by North Korea’s Lazarus Group, which drained $1.5 billion from Bybit’s Ethereum wallets. This theft surpasses the previous record-holder, the $611 million PolyNetwork hack in 2021.

Ethereum, already struggling, faced greater challenges as traders scrambled to withdraw funds, fearing another FTX-style collapse. Despite Bybit CEO Ben Zhou announcing that the exchange would cover all losses, confidence remained low, as billion-dollar hacks are hard to forget.

Originally, Bitcoin stayed insulated from the fallout. However, after the S&P 500 tanked on Friday, Bitcoin dropped too, losing its key $98,000 support level as stocks declined.

One critical factor for Bitcoin’s downturn was Citadel Securities announcing its entry into crypto as a liquidity provider. Instead of calming traders, it triggered a “sell the news” reaction, leading investors to exit.

Memecoins Collapse, Bitcoin Struggles

Solana has dropped 22% since Friday, and the memecoin sector is facing significant challenges. Following Argentine President Javier Milei’s endorsement of the Solana-based meme coin LIBRA, its value skyrocketed before crashing, resulting in a loss of $4.6 billion in investor money.

This scandal has tarnished Solana’s reputation. With $1.72 billion in SOL tokens set to be unlocked on March 1, further selling pressure is anticipated.

According to digital asset manager Arca, altcoins have lost between 30-80% since mid-December. Even Dogecoin, buoyed by Elon Musk’s news, is down nearly 7%.

Crypto-related stocks are also suffering; Coinbase has fallen for six consecutive days, marking its worst losing streak in months. MARA Holdings, a Bitcoin miner, dropped 13% last week and lost another 2.6% today. Strategy (formerly MicroStrategy) is also on the decline, despite increasing its Bitcoin purchases as reported by Google Finance.

On Monday, Strategy filed with the SEC, announcing that it bought 20,356 Bitcoin between February 18-23 for $97,514 per coin, totaling $1.99 billion. This acquisition is one of the company’s largest, pushing its total holdings to $47.7 billion, representing 2.5% of all Bitcoin that will ever exist. The company financed this purchase with proceeds from last week’s $2 billion convertible bond sale.