Market Analysis

Bitcoin Slides After Bybit Hack Results in $1.5B Loss

Amos Simanungkalit · 24 Feb110.5K Views

Image Credit: Reuters

Bitcoin saw a decline on Monday, following a 1% drop last week, as investors remained cautious due to uncertainty surrounding the U.S. interest rate outlook after weak economic data.

The drop in Bitcoin's price was further exacerbated by a major security breach at cryptocurrency exchange Bybit, where nearly $1.5 billion worth of Ethereum was stolen, adding to the negative sentiment in the crypto market.

Bitcoin fell 0.8%, trading at $95,610.20 by 01:22 ET (6:22 GMT).

Bybit Hack Results in $1.5 Billion Loss
The breach at Bybit occurred during a routine transfer from an offline "cold" wallet to an online "hot" wallet, resulting in the theft of approximately 401,000 Ethereum. This incident is considered one of the largest crypto heists to date.

Bybit’s CEO, Ben Zhou, reassured clients that their assets were secure, and the company remains solvent, with sufficient reserves to cover the losses. The exchange is working with blockchain experts to trace the stolen funds and has offered a 10% bounty for information leading to their recovery.

In the wake of the hack, Bybit saw a surge in withdrawal requests, processing over 350,000 transactions. Due to the high volume, the company acknowledged potential delays in processing these withdrawals.

Preliminary investigations suggest that the North Korean hacking group Lazarus might be behind the attack.

Investor Caution Amid Fed Rate Uncertainty
Cryptocurrency investors are exercising caution due to uncertainties surrounding the Federal Reserve's interest rate plans. Recent data revealed a slowdown in U.S. business activity, with the services PMI falling to 49.7 in February from 52.9 in January, indicating a contraction in the services sector. Additionally, Michigan's consumer sentiment index dropped to a 15-month low of 64.7 in February, down from 71.7 in January, as concerns over tariffs weigh on consumer confidence.

The Federal Reserve’s hawkish stance, driven by concerns over persistent core inflation and other economic factors, has created volatility in the financial markets, especially in risk assets like cryptocurrencies.

Altcoins Drop Amid Market Concerns
Altcoins mirrored Bitcoin's decline, with sharper drops across many digital currencies. Ethereum, the second-largest cryptocurrency, fell 2.7% to $2,718.28, while XRP, the third-largest, dropped 3.3% to $2.4796.

Solana saw a significant drop of 7.4%, and Cardano decreased by 4.4%. Polygon also fell by 2.4%. Among meme coins, Dogecoin slipped 5.3%, and $TRUMP dropped 7.2%.