Monthly Outlook（February 2025）

February brought a confluence of bearish forces to the crypto market: Bitcoin tumbled from $102,000 to below $80,000 amid heightened macro uncertainty, highlighted by Trump’s new tariffs and record BTC ETF outflows. Meme token scandals (primarily LIBRA) and a historic $1.5 billion Bybit hack further eroded confidence, dragging Ethereum lower and unsettling Solana’s ecosystem. Yet, Berachain’s highly anticipated mainnet launch demonstrated that innovation persists, and resilient stablecoin inflows hinted the overall bull market structure may remain intact, even as caution dominates the current environment.

The Bear Attack

February has been marked by a pronounced shift toward bearish sentiment in the cryptocurrency market, with the Fear and Greed index hovering in the “fear” zone for approximately 70% of the time, edging closer toward extreme fear. Bitcoin decisively broke down from its previous range bound and fell below the critical $80,000 mark, down from the monthly open of $102,000. This downturn occurred against the backdrop of liquidity exhaustion following the launch of several high-profile meme tokens in January — most notably Trump and Melania tokens. The market then faced further turbulence stemming from the LIBRA political meme token scandal (linked to the President of Argentina and Kelsier Venture), which eroded investor confidence. Adding to the turmoil, centralized exchange Bybit experienced what is now considered the largest hack in crypto history, resulting in losses approaching $1.5 billion. 

Trump’s Tariff Plans Squeeze Crypto

From the macro economic perspective, uncertainties around trade policies have weighed heavily on risk assets like Bitcoin. Recent announcements of tariffs by the Trump administration have intensified concerns over trade tensions, slower economic growth, and possible inflationary pressures. Some investors might speculate that central banks could respond by delaying potential rate cuts or even hiking interest rates to curb inflation.

BTC ETFs Recorded Biggest Monthly Outflow

In tandem with these macro headwinds, institutional flows have turned sharply negative. February recorded a net outflow of approximately $3.5 billion from Bitcoin ETF products, marking the biggest monthly outflow since the debut of ETFs. This shift indicates that institutional investors have scaled back exposure to cryptocurrencies amid the prevailing market uncertainty.

Where Do We Go From Here? Market Scenarios

In our view, the market currently finds itself “in the middle of nowhere.” Several scenarios could unfold:

Potential Rebound After Significant Sell-Off

If the market moves quickly, a rebound could materialize following February’s heavy selling pressure. A relief rally may be triggered by any positive macro or industry-specific catalysts.

Further Downside to Test Support at $70,000

Should negative sentiment persist, Bitcoin may continue to decline to $70,000, a level last seen pre-Trump election victory. This scenario hinges on whether liquidity — and buyer interest — remains weak.

Start of a Weekly Downtrend

Recent price action formed the first lower low on the weekly chart, possibly indicating the start of a prolonged downtrend. A weekly close above $100,000 could negate this pattern, but such a move currently appears unlikely.

Sideways Consolidation

Alternatively, Bitcoin could consolidate around current levels, allowing the market to rebuild buying power over time. Such a sideways structure often sets the stage for a reaccumulation phase, potentially leading to more stable support.

Political Meme Token Chaos

February witnessed a wave of political meme tokens. Following the Official Trump token and Melania token in January, new releases such as CAR, allegedly created by the President of Central African Republic, and LIBRA — initially claimed to be launched by the President of Argentina, Javier Milei — captured substantial attention. However, LIBRA quickly became embroiled in controversy, turning into one of the most significant market scandals. 

Milei announced LIBRA on his official X account, causing the token’s price to soar and its fully diluted market cap to approach $4 billion.

Liquidity was quickly drained, and Hayden Davis (Kelsier Ventures) dismissed LIBRA as “just a meme,” contradicting its initial pro-Argentina economic stance. Milei also deleted his supportive posts, citing ignorance of the project. LIBRA then plunged 80% from its peak.

On-chain data shows 86% of traders lost USD 251 million in total, while profitable traders netted around USD 180 million.

LIBRA Fallout 

The LIBRA scandal unearthed deep structural issues across the Solana ecosystem. Investigations by Moty, founder of DeFiTuna, revealed that Kelsier Ventures — the entity behind LIBRA — was also closely linked to other controversial token launches, including Melania, AIAI, MATES, and ENRON. Collectively, these tokens extracted over $200 million from retail participants.

Even more concerning, Solana’s largest DEX aggregator Jupiter and liquidity provider Meteora were implicated in coordinated manipulative practices. This revelation triggered the resignation of Ben Chow, co-founder of both platforms, further eroding trust in the Solana DeFi ecosystem.

In response to the broader market downturn and unfolding scandal, Solana’s price experienced a steep drawdown, falling from $230 to $140 — a clear reflection of shaken confidence in the broader ecosystem.

Bybit’s Historic Hack

On the evening of February 21, centralized cryptocurrency exchange Bybit experienced a major security breach. Hackers reportedly stole over 490,000 ETH (worth approximately $1.5 billion). This event now ranks among the largest crypto exchange thefts in history.

According to Spot On Chain data, the Bybit hackers laundered over 50% of the stolen ETH within a single week. Specifically:

266,309 ETH (~$614 million) were laundered over 5.5 days, representing 53.3% of the 499,000 ETH stolen.

The hackers have been laundering an average of 48,420 ETH per day, primarily converting the stolen ETH into Bitcoin (BTC) via THORChain.

At this pace, the remaining 233,086 ETH could be fully laundered in approximately 5 days.

Price Volatility

Similar to past major hacks (e.g., Mt. Gox, Coincheck), fear and uncertainty can drive heightened volatility, potentially causing spikes in trading volume as participants rush to reduce risk or capitalize on price movements. Since the hack, Ethereum’s price has fallen from $2,700 to $2,100, highlighting the level of anxiety among investors and the possibility of forced selling or short-term liquidation pressures. 

Sentiment Spillover to Other CEXs

Significant security breaches typically erode user trust across multiple centralized platforms. Even though Bybit was directly targeted, other exchanges’ tokens and share prices may experience downward pressure due to deteriorating market confidence in CEX security.

Industry Responses

In time, enhanced security measures may help restore confidence. Historical precedents (e.g., The DAO, Ronin exploits) show that, while such events can trigger short-term sell-offs, they often lead to stronger safeguards and protocols across the industry.

Another “Bear” Just Came

In a twist of market irony, the recent bearish trend coincides with the emergence of another “bear.” Berachain — an Ethereum-compatible Layer 1 (L1) blockchain built on the Cosmos SDK — officially launched its mainnet in February.

While new blockchains often struggle to attract builders, Berachain launched with over 110 projects listed on Berasearch — with 70% being native to the Berachain network. Their Royco initiative, aiming to bootstrap ecosystem liquidity, successfully locked in $2.6 billion in pre-deposits ahead of the mainnet launch. As of writing, Berachain’s TVL exceeds $3.1 billion, surpassing established chains like Base and Arbitrum. Consequently, it now ranks as the 6th-largest blockchain by TVL, demonstrating exceptional early traction.

Stablecoin Inflows Remain Resilient Despite Slowdown

Stablecoin inflows have slowed significantly but still maintain a relatively strong net inflow. Compared to January’s net inflow of $9.9 billion, February recorded only $5 billion. This deceleration is not unexpected in a risk-averse macroeconomic environment. However, February’s net inflow still aligns with the average range typical of a bull market — comparable to patterns from March to October 2024 — rather than resembling the sharp downturn at the start of the 2022 bear market. From a liquidity standpoint, the market still has ample funds, though investors remain cautious. In terms of stablecoin inflows and outflows, there are no definitive signs that the bull market structure has broken down.

Economic Data & Events to Watch in March 2025

Disclaimer

The content provided in this report is for illustrative purposes only and is intended to offer insights into the cryptocurrency market. It is not, and should not be interpreted as, investment advice or recommendations. The information contained herein is based on sources believed to be reliable; however, we do not guarantee its accuracy, completeness, or suitability for any purpose, and it should not be relied upon as such. Any opinions expressed reflect a judgment at the date of publication and are subject to change without notice. Readers are advised to conduct their own research and due diligence and, where appropriate, seek professional advice before making any investment decisions. The authors and publishers of this report accept no liability for any loss or damage arising from the use of the information provided.

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