Crypto Market Tanked 20% in February, Pummeled by Bybit Hack, LIBRA Debacle: Binance Research

Over the last month, the cryptocurrency market declined by 20.2%, according to Binance Research’s March “Key Trends in Crypto” report.

The primary factors driving February’s selloff were weakening confidence in traditional and cryptocurrency markets, the largest-ever hack of cryptocurrency exchange Bybit, and a drop in memecoin activity following the LIBRA token debacle.

The main factor was the Bybit hack of $1.46 billion, carried out by North Korea’s Lazarus Group, alongside “a broader bearish sentiment in global financial markets,” the research group said.

Global financial markets have been spooked by President Donald Trump’s nascent trade war. In February he confirmed tariffs against Canada and Mexico would go into effect in March, although he has since postponed some of them until April.

Bitcoin dropped 16% as “extreme volatility hit between February 24-26, with nearly $3 billion in liquidations marking Bitcoin’s largest price drop since the FTX collapse in 2022,” the authors added.

Ethereum was down 20% due in part to the Bybit hack, which saw the loss of some 500,000 ETH. It was also hit by news that its transaction fee revenue was down 98.5% from its 2024 peak.

Memecoins Mangled

“The memecoin sector was particularly affected, with investor confidence plummeting after the fallout of $LIBRA,” Binance Research said. The Libra memecoin skyrocketed briefly after Argentinian President Javier Milei endorsed it on his official X account, taking the post down a few hours later. Investor losses totaled some $250 million.

The report also noted that Solana saw a 30% drop, as SOL was pummeled after the market turned away from memecoins in the wake of the LIBRA affair. Solana is the home of top memecoin launchpad Pump.fun, which saw trading volume drop almost 75% in a single day.

DeFi and NFTs down

Decentralized finance (DeFi) as a whole lost 14.6% of its total value locked (TVL) due to “broader market turbulence” the researchers said.

This despite a big court win in which the Securities and Exchange Commission (SEC) dropped its appeal of a decision striking down a rule that would have been hugely damaging to DeFi as it would have required the collection of Know Your Customer (KYC) and Anti-Money Laundering (AML) data by parts of the DeFi world unable to obtain it.

The NFT market took its worst hit since April 2021 thanks to “economic uncertainty, inflation concerns, and a pullback from speculative assets,” the report said.

It did note that top NFT marketplace OpenSea saw its market share jump past 70% from 25.5% in just four weeks, “buoyed by the announcement of its native token, SEA, and the launch of its OS2 trading platform.”