The global crypto market is experiencing a downturn with its capitalization falling to November 2021 levels, largely due to the Bybit hack and the memecoin bust.
Bybit Hack and Its Aftermath
The biggest trigger for the recent market decline was the Bybit hack, resulting in a $1.4 billion loss. This led to panic among investors and mass withdrawals from exchanges. Although Bybit has reported restoring its Ethereum reserves, the incident has cast doubt on the security of centralized platforms.
Memecoin Market Slump
The memecoin market downturn, involving tokens like $TRUMP and $DOGE, also contributed to the crisis. Recent double-digit percentage drops in these tokens' values have further dampened investor sentiment. For instance, $TRUMP fell by nearly 30% in just a week, highlighting the volatility of meme-based investments.
Rise in Futures Liquidations
The cascade of negative news has led to a spike in futures liquidations. On Monday, $227 million were liquidated across futures exchanges, marking the third-largest liquidation event since September 2024. This signifies high market stress levels.
The crypto market's capitalization fall to November 2021 levels underscores the volatility inherent in digital assets. Despite current challenges, there is an opportunity for learning and strengthening in the future.
