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A meme coin scandal from a nation state, a record breaking exchange hack, and market volatility—last week was a crazy one.
Despite the LIBRA Scam and the Bybit Hack, Crypto Markets Held Up Relatively Well
The week was bookended by big enough events to affect the markets, the LIBRA memecoin at the front of the week and the Bybit hack at the end. Following LIBRAs release, meteoric rise, and quick demise, the fallout of the Libra incident unfolded this week. Javier Milei faces mounting political and legal fallout after the LIBRA incident, with opposition parties calling for his impeachment, lawyers filing fraud charges, and the Anti-Corruption Office launching an investigation. Crypto is now important enough to have geopolitical implications.
The hectic week closed with crypto exchange Bybit being hacked for $1.4 billion worth of ETH. Ben Zhou, CEO of Bybit, alerted users to the hack earlier on Feb. 21, stating that the crypto exchange’s Ethereum multisig cold wallet had transferred funds to a warm wallet about an hour earlier. Bybit then faced 350K withdrawal requests, but Zhou announced on X that 12 hours after the hack the backlog had cleared. Many notable figures on CT applauded Zhou and Bybit’s handling of this situation, calling it a “masterclass.” I couldn’t agree more.
The cryptocurrency market saw a mix of volatility likely attributable to these two events. Market sentiment took a beating following all of the LIBRA-related news, including news that Milei will be investigated by the FBI. Such bad sentiment along with macroeconomic concerns precipitated Bitcoin’s price to plummet on Tuesday. Bitcoin recovered after that, but upon the announcement of the Bybit hack Bitcoin fell 3%. The recovery could be just as fast considering how well Bybit handled this historic hack.
In altcoins, we might be finally reaching a bottom. Alts have been absolutely hammered the past month even while Bitcoin has been relatively steady. There are indications that certain alts might have bottomed. BERA, a coin covered negatively in last week’s newsletter, has moved up about 30% from last week, seeming to gain some traction and mindshare on CT. Bittensor (TAO) moved up 20% from last week, 40% from the lows two weeks ago. Kaito AI, darling of CT, launched their KAITO token on Feb. 20. Unlike BERA last week, the KAITO token launch went much better. There was no initial pump and subsequent dump.
Overall, when major negative events like those that bookended this week haven’t tanked the market, it’s hard not to feel bullish.