Crypto Market in Crisis: Bitcoin Plummets, Bybit Hacked for $1.7B, and Trump’s Policies Shake Investor Confidence
The crypto market is experiencing instability, with Bitcoin (BTC) leading the downturn. As of February 27, 2025, BTC is trading at $84,644, reflecting a 3.88% decrease from the previous close. The day trading high reached $89,277, while the low dipped to $82,464. This decline is part of a broader trend, with the global crypto market capitalization falling to $2.8 trillion, marking a 6.8% decrease.
Many factors have contributed to the market’s fluctuations, which have caused uncertainty among investors and prompted many to sell their assets. This widespread doubt has led people to question the safety of the Web3 space. Given the market’s instability, it’s only natural to wonder whether your funds are genuinely secure.
Major Security Breach at Bybit
A massive security breach at Bybit, a well-known cryptocurrency exchange, is a significant factor in the market’s instability. On February 21, 2025, Bybit suffered a hack that stole approximately $1.7 billion in crypto assets, primarily Ethereum (ETH). This incident is one of the largest digital heists, severely impacting investor confidence and contributing to the recent market downturn.
The attack occurred during a routine transfer of Ethereum between digital wallets, which an attacker manipulated. Bybit CEO Ben Zhou confirmed that the hacker took control of the ETH cold wallet through a masked transaction. Since then, Bybit has taken steps to replenish its reserves through emergency loans and whale deposits. The FBI has identified North Korea’s Lazarus Group as the perpetrators, who have laundered more than $335 million in stolen ETH.
Policy Uncertainties Under the Trump Administration
Recent policy decisions from President Donald Trump’s administration have also affected investor sentiment. New tariffs, including a 25% levy on imports from Canada and Mexico and a 10% tax on Canadian energy exports, have introduced additional uncertainty into the market. These policies have raised concerns about potential inflation and economic instability, leading investors to retreat from riskier assets, including cryptocurrencies.
Additionally, the anticipated pro-crypto policies from the Trump administration have yet to materialize, leading to traders’ disappointment and the market’s decline. Trump has also expressed interest in a new trade deal with China that would include increased purchases of American products.
On February 1, he imposed a 10% tariff on all Chinese imports, which he called an “opening salvo. “ This led to retaliation from China. While some analysts believe Trump’s softened tone and engagement with Beijing have soothed Chinese nerves, trade tensions continue to impact the crypto market.
Web3 Market Trends and Challenges
Despite the growing interest in the digital asset market in 2024, regulatory uncertainty, such as the SEC’s enforcement actions, has chilled Web3 development, pushing some projects to seek friendlier jurisdictions. However, the anticipation of a more crypto-friendly SEC in 2025, along with support from pro-crypto members of Congress and President Trump, could spark a change for Web3.
Bitcoin (BTC) Price Analysis and Market Outlook
Bitcoin’s price has experienced volatility, reaching approximately $88,736.17 as of February 25, 2025. By February 26, 2025, BTC was trading at around $84,107. This fluctuation is influenced by market dynamics, including the approval of Bitcoin ETFs, events involving major companies like Tesla and Coinbase, and the bankruptcy of crypto exchanges.
The fixed supply of Bitcoin, with only 21 million to ever be minted, contributes to dramatic price changes as demand varies. Large Bitcoin holders, or “whales,” also impact the market.
Concerns about security, unmet policy goals, and economic uncertainty have made the crypto market difficult. Analysts say that clear rules and stronger security measures are necessary to rebuild investor trust and stabilize the market. Investors should stay informed and cautious about their investment choices as things change.
