$500 Billion Crypto Market Wipeout – What Caused It?
In 2025, the crypto market saw a massive wipeout of nearly $500 billion. Several major factors contributed to this crash:
1. U.S. Tariff Announcements and Trade Tensions
U.S. President Donald Trump introduced new tariffs on imports from China, Canada, and Mexico. This reignited global trade war fears, strengthening the U.S. dollar and pushing investors away from risky assets like crypto.
2. Bybit Exchange Hack
On February 21, 2025, the Bybit crypto exchange suffered a major hack, losing around $1.5 billion worth of Ethereum. This significantly damaged investor confidence across the market.
3. Large-Scale Investor Sell-Offs
Due to growing uncertainty and fear in the market, many large investors began withdrawing funds from crypto assets, accelerating the downward trend.
4. Economic Concerns and Slowing Growth
Weak economic indicators in the U.S. reduced investor optimism. Fears of a potential recession and lower consumer confidence triggered a risk-off sentiment, which affected the crypto market.
5. Massive Liquidations
As prices of major cryptocurrencies like Bitcoin and Ethereum fell, leveraged positions were liquidated across exchanges. This intensified the selling pressure and caused a further decline in market value.
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These combined events led to one of the largest market crashes in crypto history, erasing hundreds of billions in just a few days.
