Crypto Struggles Further as U.S. Stock Declines Intensify

Crypto Market Tumbles as Bybit Hack and Stock Slump Erase Gains

A promising crypto rally was derailed on Friday as news of a massive security breach at Bybit and a sharp downturn in U.S. stocks sent digital asset prices plummeting.

Optimism had been running high earlier in the day after reports that the U.S. Securities and Exchange Commission (SEC) was preparing to drop its lawsuit against Coinbase (COIN). The news triggered a 5% jump in COIN shares, a 4% gain for Robinhood (HOOD), and pushed Bitcoin (BTC) toward the crucial $100,000 mark.
Bybit Breach Sparks Sell-Off

The bullish momentum faded abruptly when on-chain investigator ZachXBT flagged an unusual $1.5 billion outflow from Bybit. Speculation swirled until Bybit CEO Ben Zhou confirmed that the exchange had suffered a significant security breach. Panic selling ensued, with BTC and ether (ETH) shedding 2% in minutes.
Weak Economic Data and Stock Market Decline Worsen Crypto’s Slide

The situation worsened in the afternoon as U.S. stock markets turned sharply lower. The Michigan Consumer Sentiment Index disappointed at 64.7, missing forecasts of 67.8, while inflation expectations ticked up to 3.5%, fueling concerns about persistent inflationary pressures.

Adding to market jitters, reports of a new coronavirus variant, HKU5-CoV-2, emerging from China rattled investors, recalling memories of past economic disruptions.

By the time markets closed, the Nasdaq had plunged 2.2%, the S&P 500 dropped 1.7%, and the 10-year U.S. Treasury yield slid to 4.42%.
Bitcoin and Ether Erase Weekly Gains

Crypto markets took a hit alongside stocks, with Bitcoin retreating below $95,000 and ether sliding to $2,650. The CoinDesk 20 Index fell 4.4%, reflecting broad-based losses across the digital asset sector.

The market’s strong start to the week has now been overshadowed by security concerns and economic uncertainty, leaving traders on edge as they head into the weekend.