Crypto Market Loses $100 Billion in 24 Hours Amid Market Turmoil
The global cryptocurrency market witnessed a dramatic drop of $100 billion within 24 hours, with total market capitalization sliding to $3.5 trillion – a 4% decline, according to CoinMarketCap. This sharp downturn, occurring on Monday, is attributed to an amalgamation of three key events: a significant DeFi security breach, uncertainty regarding Federal Reserve rate cuts, and intense whale profit-taking.
Major Factors Driving the Decline
1. DeFi Exploit on Balancer Protocol
A critical exploit targeting Balancer’s V2 vaults resulted in $128 million being siphoned across six blockchains, including Ethereum, Arbitrum, and Polygon. Hackers leveraged a faulty access control vulnerability, impacting assets like WETH and wstETH. According to security firm PeckShield, this incident is the third-largest in DeFi’s 2025 timeline. Platforms like Berachain took drastic measures, halting their network to initiate an emergency hard fork.
2. Federal Reserve Policy Concerns
Uncertainty surrounding the U.S. Federal Reserve’s stance on interest rate cuts further spooked the crypto market. San Francisco Fed President Mary Daly hinted at a cautious approach regarding December’s rate decision. A stronger U.S. dollar exerted downward pressure on riskier assets, including cryptocurrencies. Traders now await key economic metrics, including labor market reports and inflation data, to assess the likelihood of future rate cuts.
3. Aggressive Whale Selling Activity
Major Bitcoin holders, colloquially known as whales, have been offloading their assets, exacerbating market volatility. Notably, one Bitcoin OG sold over 13,000 BTC in October alone, with 1,200 BTC transferred to Kraken last weekend, according to CryptoQuant. This overwhelming sell pressure resulted in liquidations exceeding $1.2 billion, mostly targeting leveraged positions.
Market Responses and Notable Developments
Despite the downturn, some institutional players like MicroStrategy took advantage of the drop, acquiring 397 BTC for $45.6 million. Meanwhile, Ripple made waves with strategic initiatives, including rolling out Ripple Prime for U.S. institutional spot trading and achieving a $1 billion market cap for its RLUSD stablecoin. This signals that while some segments of the market contract, others are laying groundwork for future recovery.
Looking Ahead: Is There Stability in Sight?
While the crypto market faces challenges, data from Binance revealing $7.3 billion in stablecoin inflows suggests that capital is ready on the sidelines, waiting for the opportune time to re-enter. Long-term investors remain cautiously optimistic about the recovery potential of major assets like Bitcoin and Ethereum, particularly as Ethereum eyes a potential rise to $6,500 in the coming months.
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