On February 25, 2025, the price of Bitcoin experienced a violent flash crash. In the past 24 hours, Bitcoin fell by 5%, once falling below the $91,000 mark, setting a new monthly low. This plunge not only refreshed the largest single-day drop since the liquidation on February 3, but also triggered a chain reaction in the cryptocurrency market: nearly 300,000 people in the entire network were liquidated, about $900 million in funds "evaporated", and US cryptocurrency concept stocks fell simultaneously, and market panic spread rapidly.
The overall market of the cottage industry has been washed away by waterfalls, and both AI and high-quality DEFI have experienced significant declines. Among them, mainstream currencies have also fallen: Solana (SOL) fell by more than 16%, Ethereum and XRP fell by 12%, and BNB was relatively "mild", falling by 6%. More than 90% of the top 100 tokens by market value suffered losses.
Causes of the plunge: Multiple factors intertwined to affect the market
1. Macroeconomic factors
The recent "hawkish" signals from the Federal Reserve have exacerbated market uncertainty, pushing the U.S. dollar index to strengthen, which in turn suppressed the performance of risky assets. As expectations of U.S. interest rate hikes rise, market interest in high-risk assets has declined, and U.S. stocks such as Nasdaq have experienced a sharp correction, which has also had a collateral impact on the cryptocurrency market. At the same time, the Federal Reserve's policy direction has made the phenomenon of capital outflow from the cryptocurrency market more obvious, and the reduction in risk appetite has led to downward pressure on the crypto market.
2. Fund flows and the weakness of the ETF market
In 2024, the net inflow of US spot Bitcoin ETFs reached as high as US$35.66 billion, but after entering 2025, the inflow of funds slowed down significantly. Since February, the average weekly inflow of funds into ETFs has dropped by 40% compared with January, and there has been outflow of funds for two consecutive weeks. This also reflects that the wait-and-see sentiment of market investors has intensified and market funds have failed to enter effectively, further aggravating the weak trend of the market. Especially when the ETF market performed poorly, the cooling of market sentiment also significantly affected the price trend of crypto assets.
3. Policy uncertainty: Trump policy and regulatory changes
Although the Trump administration has signaled support for cryptocurrencies in 2024, its promised "Bitcoin strategic reserve" policy has not yet been implemented, and market concerns about policy fulfillment are gradually heating up. At the same time, the market's divergent expectations for regulatory policies have also exacerbated uncertainty. Especially in the context of basis changes, it may trigger large-scale selling, further depressing the prices of assets such as Bitcoin.
There are different opinions on this market crash, but now is a period of change, and the final direction is downward. This is also an opportunity. The overall US dollar index is still on a downward trend, and the realized price of BTC is significantly higher than the currency price. In short, it is bearish in the short term and bullish in the long term, waiting for a deep squat.
The cryptocurrency world is now like a pig-killing scheme. Since Trump took office, there has been basically no good trend in the cryptocurrency world. There was a bit of a carnival during the election and when he took office, but it has been falling ever since.
This month, there have been a series of negative news, including Trump's tariff black swan, ETH 3000-2000 a day, Argentina's joint coin issuance, and the bybit hacking incident. Trump's tariff black swan contract liquidation has killed all the local dogs on the Argentina chain, and the bybit hacking institution is scared to death. The currency circle is already riddled with holes. There is no point in starting over except torn it down and starting over. No one plays anymore, and there is no money to play. There is no point in pulling the market up without torn it down and starting over.
Wash your face in the cottage waterfall!
Compared with BTC, which is gradually becoming more like a U.S. stock, retail investors may be more concerned about the future performance of the two major altcoins, ETH and SOL, but the situation is not optimistic at the moment.
ETH has suffered a sudden disaster recently. Originally, ETH Denver would have been a great opportunity for the entire Ethereum community to restore its faith, but the sudden Bybit $1.5 billion hacking incident dealt a heavy blow to ETH.
A few days ago, ETH holders could still comfort themselves by saying “Bybit will buy it back” and “it may take several years for the hacker to sell off”, but now Bybit has basically replenished the stolen ETH from over-the-counter and lending channels, and potential buying has been eliminated; at the same time, the speed at which hackers laundered money has far exceeded market expectations, and more than 20% of the funds have been laundered in just a few days.
SOL is even bleaker. On the one hand, affected by malicious events such as LIBRA, the wealth effect of meme tokens has gradually disappeared, and the "golden shovel" attribute of SOL is decreasing; on the other hand, the upcoming SOL large-scale auction unlocking on March 1 has also caused some holders to choose to temporarily avoid the limelight and withdraw to wait and see.
As the market evolves to this stage, the much-anticipated “altcoins” seem to be really gone, and this round of bull market is increasingly looking like a solo dance for BTC.
As for the future trend of altcoins, there will no longer be a comprehensive bull market, and more attention should be paid to protocols that have real practical uses and sustainable economic models.
The entire cryptocurrency industry seems to be undergoing a large-scale "eliminating the false and retaining the true". Only when the bubble is squeezed out can value discovery be ushered in.