Bybit Hack and U.S. Stock Slump Derail Crypto’s Rally
The recent upswing in crypto markets was swiftly reversed following a major security breach at crypto exchange Bybit and a downturn in U.S. equities.
Earlier in the day, sentiment had been bullish as the U.S. Securities and Exchange Commission (SEC) signaled plans to drop its lawsuit against Coinbase (COIN). The regulatory relief fueled a 5% rally in COIN shares and boosted Robinhood (HOOD), a rising player in crypto trading. Bitcoin (BTC) also broke out of its narrow trading range, approaching the $100,000 mark.
However, the positive momentum was short-lived. By late morning, reports surfaced that Bybit had suffered a staggering $1.5 billion hack—the largest exploit in crypto history. The news triggered a sharp sell-off, with BTC and ether (ETH) plunging about 2% in minutes.
Stock Market Woes Amplify Crypto Losses
Despite an initial attempt to recover, any bounce in crypto was soon overshadowed by mounting losses in U.S. equities.
The downturn in stocks was fueled by a weaker-than-expected Michigan Consumer Sentiment Index, which fell to 64.7, missing the forecast of 67.8. Additionally, inflation expectations from the same survey rose to 3.5%, surpassing the projected 3.3%.
Adding to investor unease was news of a new coronavirus variant discovered in China, HKU5-CoV-2, described by researchers at the Wuhan Institute as “strikingly similar” to the virus behind the 2020 pandemic, according to the Daily Mail.
By late afternoon, the Nasdaq had dropped 2.2%, while the S&P 500 slid 1.7%. The yield on the 10-year U.S. Treasury fell nine basis points to 4.42%.
Bitcoin Retreats Below $95K
The combination of crypto-specific turmoil and broader market weakness erased bitcoin’s recent gains, sending it back to $95,000—down nearly 4% in the past 24 hours. Ether (ETH) followed suit, declining to $2,650. The broader CoinDesk 20 Index fell 4.4%, underscoring the widespread sell-off across digital assets.
