Bitcoin & Ethereum Struggle Amid Hacks & ETF Outflows
The cryptocurrency market lost $40 billion in just 24 hours, with Bitcoin and Ethereum struggling amid ETF outflows and major hacks. This sharp decline has left investors cautious, especially as February—a historically strong month for Bitcoin—shows signs of ending in the red. The Crypto Fear & Greed Index sits at 40, reflecting neutral yet wary sentiment. Let’s explore the key reasons behind this downturn.
ETF Outflows Fuel Market Decline
The crypto market lost $40 billion in 24 hours, and ETF outflows are a major driver. Over the past two weeks, U.S. spot Bitcoin ETFs have seen $1.14 billion in net outflows—the largest since their launch. Last week alone, withdrawals totaled $571 million, with Fidelity, Grayscale, and Bitwise leading the sell-off. Investors cite concerns over trade tariffs, inflation, and potential monetary policy shifts as reasons for pulling funds.
Ethereum ETFs have also struggled, losing $85.3 million in the same period. Grayscale’s significant outflows have further weighed on Ethereum’s price. These withdrawals signal a broader retreat from riskier assets like cryptocurrencies.
Hacks Erode Investor Confidence
Recent high-profile hacks have intensified selling pressure, contributing to the crypto market’s $40 billion loss. The Bybit hack, which resulted in a $1.4 billion loss in Ethereum, triggered widespread concern. Although Bybit recovered $742 million, investor trust remains fragile. Another hack at neobank Infini, involving $49.5 million in USDC, has added to the unease.
These security breaches have left many questioning the safety of digital assets, amplifying the crypto market’s $40 billion decline. As a result, investors are reassessing their exposure to cryptocurrencies.
Will February End Poorly for Bitcoin?
Bitcoin’s February performance is under scrutiny. Historically, the month has been favorable, with only two negative years (2014 and 2020). However, Bitcoin is down 6.41% this month and must close above $102,500 to avoid a third red February. Currently trading between $93,000 and $100,000, Bitcoin risks falling to $90,000 if it breaches the $93,000 support level.
Ethereum Faces Growing Competition
Ethereum, trading at $2,706 after a 2.2% drop, is also struggling. Despite strong Q1 performances in previous fourth-year cycles, Ethereum is down 17% this year. Competition from blockchains like Solana and Cardano is intensifying, challenging Ethereum’s dominance in DeFi and smart contracts.
The crypto market’s $40 billion decline has amplified Ethereum’s woes, but its resilience could still shine through if it navigates these hurdles.
Strategy Capitalizes on the Dip
Despite the downturn, Strategy (formerly MicroStrategy) has seized the opportunity, purchasing 20,356 BTC for $1.99 billion. This brings their total holdings to 499,096 BTC, valued at $47.4 billion—a $14 billion paper gain. However, their shares have still lost over 12% in the past five days, reflecting broader market pressures.
This move highlights that while some see opportunity in the crypto market’s $40 billion loss, others remain cautious.
Navigating the Crypto Market’s Challenges
The crypto market lost $40 billion in 24 hours, with Bitcoin and Ethereum struggling amid ETF outflows and hacks. As February nears its end, Bitcoin’s performance remains uncertain, and Ethereum faces growing competition. While Strategy’s purchase signals confidence, the market’s path forward is unclear. Investors should monitor key support levels and ETF flows closely. Is the worst over, or is more volatility ahead?
