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In February 2025, the cryptocurrency market declined by 20.2%, contributed by increasing negative sentiment, a historic US$1.5B hack on Bybit, and a drop in memecoin activity. Traditional finance markets also faced bearish trends, with major stocks like NVDA, GOOGL, and AMZN declining year-to-date, and consumer discretionary and information technology sectors down 6% and 3%, respectively. Trade tensions and President Trump’s confirmation of 25% tariffs on imports from Canada and Mexico further dampened investor confidence, causing U.S. Treasury yields to hit their lowest levels in two months.
President Trump’s tariff announcements have unsettled markets, triggering sharp fluctuations and putting pressure on Bitcoin and other risk assets. Over the past month, the global crypto market cap has fallen by over 20%, from US$3.6T to US$2.8T, with the most recent decline in late February driven by concerns over potential EU tariffs and the reinstatement of tariffs on Canada and Mexico. As the situation continues to unfold, ongoing policy uncertainty has driven de-risking across markets.
Over the past 30 days, Solana has seen US$485M in outflows, mainly to Ethereum, Arbitrum, and BNB Chain, with trading activity and TVL significantly declining. Some of the capital flowed into BNB Chain memecoins, driven in part by CZ's tweets about his dog, Brocolli. Overall, there is a broader flight towards safety in crypto markets, with Bitcoin dominance increasing 1% in the past month to 59.6%.
Stablecoins and real-world assets (RWA) have reached new all-time highs, with market caps surpassing US$224B and US$17B respectively, growing by 10% and 17% this year, in contrast to a 13% decline in the overall crypto market cap. This growth is driven by market turbulence prompting a shift to stablecoins for reduced volatility, increased regulatory clarity from new U.S. stablecoin bills enhancing market credibility, and attractive yields from RWAs, particularly in private credit, which continues to draw investor interest.
Bybit suffered the largest security breach in crypto history, with US$1.46B exploited on their ETH multisig cold wallet on February 21, 2025. The attack was orchestrated by the Lazarus Group through a phishing attack on a Safe{Wallet} developer, leading to a record number of over 350K withdrawal requests that were successfully processed within 12 hours. US$42.89M of stolen funds have been frozen with the help of multiple crypto platforms at the time of writing.
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