The global cryptocurrency market saw a sharp 20.2% drop in February 2025, a stark contrast to the optimism of 2024.
Binance’s latest crypto market report attributes the downturn to a combination of a major security breach and growing macroeconomic uncertainty, leading to a shift in investor behavior.
Record Hack Shakes Investor Confidence
The market’s downturn — from $3.6 trillion to $2.8 trillion — was primarily fueled by a $1.5 billion hack on Bybit, one of the largest in crypto history.
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At the same time, negative sentiment across traditional financial markets, exacerbated by U.S. President Trump’s new tariffs on Canada, Mexico, and China, weighed heavily on investor behavior, Binance says in its latest monthly crypto market report.
Shift Towards Stability: Bitcoin, Stablecoins, and RWAs Surge
Amid market volatility, Bitcoin’s dominance rose by 1% to 59.6%, reflecting investors’ flight to safer assets.
Stablecoins and real-world assets (RWAs) also saw impressive growth, with their market caps surpassing $224 billion and $17 billion, respectively. Both stablecoins and RWAs grew by 10% and 17% this year, contrasting with a 13% decline in the overall crypto market cap.
“This growth is driven by market turbulence, which has prompted a shift to stablecoins for reduced volatility, as well as increased regulatory clarity from new U.S. stablecoin bills that enhance market credibility.
Additionally, attractive yields from RWAs, particularly in private credit, continue to draw investor interest,” stated the Binance report.
DeFi Faces Decline: Solana Sees Major Outflows
Meanwhile,Once a leader in decentralized finance, Solana experienced $485 million in outflows over the past month, as capital shipted toward Ethereum, Arbitrum, and BNB Chain.
Both trading activity and total value locked (TVL) on Solana significantly declined during this
Period, underscoring the changing investor sentiment in DeFi.
2024: The Year of Growth and Optimism
Meanwhile, a year ago, the crypto market was in a much stronger position.
Binance’s March 2024 report highlighted robust growth in the sector, with a 40% increase in total market capitalization for February, the largest since late 2021. Spot Bitcoin ETFs attracted over US$4.9B in inflows, fueling further capital growth.
DeFi platforms, particularly restaking solutions like EigenLayer on the Ethereum chain, saw significant expansion. EigenLayer’s total value locked (TVL) surged by 800% year-to-date, with liquid restaking protocols driving a 300% rise in TVL just in February.
Why This Matters
The rapid shift from bullish optimism to defensive positioning in 2025 underscores the market’s sensitivity to external shocks.
The Bybit hack, compounded by macroeconomic pressures, has pushed investors toward safety, signaling that, at least for now, crypto’s speculative fervor has cooled. The long-term outlook remains uncertain as regulators tighten their grip and investors adjust to new realities.
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