There Goes Crypto: Tariffs & Breaches Cause Market to Tumble

Cryptocurrencies have been a relatively new addition to the trading market, with Bitcoin making its first appearance in 2009. Since then, the cryptocurrency market has exploded, with thousands of new coins making their appearance available for trade. In fact, almost $300 billion worth of cryptocurrency is traded daily. Unlike regular stocks, cryptocurrency is not tangible and is all digital. More specifically, crypto coins are digital currency that can be traded over the internet. Despite their popularity, however, many old-school investors feel that crypto is a big gimmick that is not worth the risk since they are largely unregulated and fully digitized. While many smaller coins (meme coins) are known for their extreme volatility—either jumping in value and making investors a fortune or crashing and plummeting in value—a few have grown to become established and relatively stable. These stable crypto coins, such as Bitcoin, Ethereum, and Solana have almost become as reliable as index funds like the S&P 500 and Nasdaq 100. But in the last week of February 2025, stablecoins and meme coins alike all took a drastic tumble in the crypto market, causing an estimated $700 billion combined loss in value.

First, Bitcoin (BTC), the most popular coin in the market, lost around 10.5% valuation in the last week of February, dropping to below $90,000 for the first time in 3 months. This plummet can be attributed to a few factors, with the root cause seemingly being President Trump’s tariffs on China. Many investors believed that these tariffs would cause a momentary drop in business and valuation for large corporations. Just like an individual trader, large corporations and banks have also reached into the crypto pool, owning millions of dollars worth of digital assets. Due to the jeopardy that these large corporations face from the tariffs, many have begun to sell off their crypto assets in favor of more reliable stocks and index funds.

In addition to the tariffs, a quite poignant incident took place which directly harmed the cryptocurrency market. On February 21, 2025, one of the largest crypto security breaches occurred on Bybit. Bybit is a well-known cryptocurrency exchange platform, known for its multitude of features and huge coin variety. During a transfer of coins and funds from the company’s internal database to its external database, a group of alleged North Korean hackers gained access to Bybit’s internal wallet. By doing so, they were able to transfer around $1.5 Billion worth of Ethereum (ETH) to their own account. This shocking news left millions of crypto investors anxious about leaving precious assets in the form of a digital currency that can be hacked out of the blue, leading to a massive sell-off of virtually every coin and a dip in the overall market.