Crypto Market Plunges as Bybit Hack and Stock Sell-Off Trigger Panic
A bullish week for crypto took a sharp turn on Friday as a massive security breach at Bybit and a broader stock market downturn wiped out recent gains.
Earlier in the day, optimism surged after reports that the U.S. Securities and Exchange Commission (SEC) planned to drop its lawsuit against Coinbase (COIN). The news sent COIN up 5%, Robinhood (HOOD) gaining 4%, and Bitcoin (BTC) breaking past $99,000—flirting with the key $100,000 level.
Bybit Hack Sends Shockwaves Through the Market
The rally was cut short when blockchain investigator ZachXBT flagged a suspicious $1.5 billion outflow from Bybit. Hours later, Bybit CEO Ben Zhou confirmed the breach, calling it one of the most significant security incidents in crypto history. BTC and ether (ETH) quickly plunged 2% within minutes, as investors scrambled for clarity.
Stock Market Sell-Off Piles on the Pain
Crypto traders looking for stability found no relief in traditional markets. U.S. stocks suffered a sharp sell-off in the afternoon, fueled by disappointing economic data.
The Michigan Consumer Sentiment Index unexpectedly dropped to 64.7, falling short of expectations for 67.8. Meanwhile, inflation expectations ticked up to 3.5%, heightening concerns about prolonged monetary tightening. Adding to market jitters, reports surfaced about a new coronavirus variant, HKU5-CoV-2, raising fears of potential disruptions.
By the closing bell, the Nasdaq had fallen 2.2%, the S&P 500 slid 1.7%, and the 10-year U.S. Treasury yield dropped to 4.42%.
Bitcoin and Ether Extend Losses, Erasing Weekly Gains
The combination of a major exchange hack and a deteriorating macro environment proved too much for crypto markets to withstand. Bitcoin tumbled below $95,000, wiping out its recent gains, while ether sank to $2,650. The broader CoinDesk 20 Index fell 4.4% in 24 hours, reflecting widespread weakness across the digital asset space.
What started as a promising rally has now turned into a test of resilience for investors navigating both internal crypto risks and external economic pressures.
