I. Five Core Causes of the Crypto Market Plunge
On February 24-25, 2025, the crypto market encountered 'Black Monday', with Bitcoin plunging over 8% in a single day, Ethereum falling 25%, and over 360,000 liquidations across the network, with nearly $10 billion in funds evaporating. This crash was triggered by multiple negative factors:
1. Regulatory policy 'black swan': The Bitcoin investment bill in South Dakota has been postponed, undermining expectations for institutional funds to enter; the EU has included cryptocurrency exchanges in its sanctions list for the first time, increasing compliance risks.
2. Macroeconomic factors and a strong dollar: The Federal Reserve has signaled a 'hawkish' stance, with the dollar index rising and suppressing risk assets, weakening Bitcoin's hedging properties as 'digital gold'.
3. Hacking attacks and trust crisis: The Bybit exchange was hacked for $1.5 billion in ETH, creating the largest theft in history and raising questions about the security of centralized platforms.
4. Collapse of leverage bubbles: Bitcoin's cumulative rise exceeded 30% at the beginning of the year, and high leverage (some exceeding 100 times) triggered a chain liquidation after the price fell below key support levels.
5. Market sentiment panic: The plunge of US-listed Chinese stocks and the cooling of the AI boom have further amplified the panic sentiment.
II. Three Key Factors of Pi Coin's Resilience
Despite the overall market plunge, Pi coin (PI) has shown strong resilience, with price fluctuations significantly lower than mainstream cryptocurrencies since the mainnet launch:
1. Lock-up mechanism alleviates selling pressure: Pi Network launched a token lock-up plan, where users can increase mining rewards by locking tokens for three years, reducing market circulation in the short term and alleviating selling pressure.
2. Community consensus and ecological potential: Relying on a user base of 60 million, Pi coin has accumulated long-term trust through a 'zero-energy mobile mining' model, and some investors maintain expectations for its future payment scenarios and ecological expansion.
3. Liquidity has not been fully released: Pi coin has not yet been listed on mainstream exchanges like Binance and Coinbase, with lower liquidity in over-the-counter transactions, resulting in smaller impacts from short-term selling pressure.
III. Investment Insights and Future Outlook
1. Beware of high leverage and short-term volatility: During this crash, 90% of liquidations were concentrated on long contracts. It is recommended that investors close leverage and prioritize holding anti-dip assets like Bitcoin and Ethereum.
2. Focus on policy and ecological progress: If Pi coin can be listed on mainstream exchanges and improve payment scenarios, it may see a reassessment of its value; however, caution is required regarding the risk of regulatory tightening.
3. Long-term allocation of quality assets: Bitcoin, Ethereum, and other mainstream cryptocurrencies may experience short-term fluctuations or bottoming out, but they are still supported by technological iterations and institutional entry in the long term.
Conclusion
The extreme volatility of the crypto market is essentially a coexistence of risk and opportunity. The resilience of Pi coin highlights the importance of community consensus and mechanism design, while the pullback of mainstream cryptocurrencies provides entry windows for long-term investors. Rationally responding to short-term fluctuations and focusing on technology implementation and policy guidance is crucial for steady progress in the crypto wave.
