BTC Drops Below $80,000 Amid Macro Concerns; ETF Outflows Accelerate, and Ethereum Looks Ahead Upgrade
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TL;DR
Bitcoin Dips Below $80,000 Amid Market Uncertainty
Bitcoin experienced a significant drop, losing 7.6% in the past day to trade at $79,390 as of 2 p.m. Friday in Hong Kong. This marks a new yearly low and a continuation of the recent downward trend. Ether also declined, hovering around $2,100, marking a 10% drop within the same timeframe. The bearish sentiment across crypto markets remains strong, influenced by economic concerns and global market instability.
Augustine Fan, Head of Insights at SignalPlus, pointed out that despite a solid earnings report from Nvidia, the market has struggled to maintain momentum due to renewed concerns over tariffs, a slowing economy, and stretched investor positioning. President Trump confirmed on Thursday that new tariffs on imports from Canada, Mexico, and China would take effect on March 4, compounding uncertainty in global financial markets.
Additionally, institutional repositioning has played a key role in deepening Bitcoin’s decline. Crypto research firm Presto Research highlighted that major institutions are unwinding basis trade positions, further pressuring prices. U.S. Bitcoin ETFs have recorded historic outflows, underscoring shifting investor sentiment.
The Crypto Fear & Greed Index has plummeted to a score of 10, signaling "Extreme Fear" among investors. This is the weakest reading since the collapses of Terra-Luna and Three Arrows Capital in 2022, indicating that market participants are bracing for further downside in the near term.
US Spot Bitcoin ETFs See $3.2B in Outflows Over Eight Days
Spot Bitcoin ETFs in the U.S. have endured an eight-day streak of net outflows, totaling $3.2 billion. This marks the longest continuous period of outflows since August 2024 and signals broader risk aversion among institutional investors. Tuesday saw the largest single-day outflow of $1.14 billion, with BlackRock’s IBIT leading the withdrawals at $418 million.
Despite these losses, the pace of outflows has slightly moderated. On Thursday, net outflows stood at $275.8 million, with Bitwise’s BITB being the only fund to see net inflows, adding $17.6 million. However, the cumulative net inflows across all 12 spot Bitcoin ETFs now stand at $36.85 billion, the lowest level recorded since mid-January.
The rapid exodus from Bitcoin ETFs coincides with a downturn in both crypto and equity markets. Some analysts attribute this to the Trump administration’s tariff announcements, which have introduced additional economic uncertainty. Nick Ruck, Director at LVRG Research, commented that investors are shifting toward a longer-term negative outlook for the U.S. economy, further weighing on risk assets like Bitcoin.
The broader crypto market has seen a 7.41% decline over the past 24 hours, with Bitcoin shedding 7% and Ether dropping 9.9%. The GMCI 30 Index, which tracks the performance of the top 30 cryptocurrencies, is down 8.3%, reflecting widespread selling pressure.
Bybit Hackers Move Over Half the Stolen ETH to Bitcoin
The hackers behind the Bybit breach have reportedly moved more than half of the stolen ETH onto the Bitcoin network, utilizing protocols such as THORChain to obscure the transactions. According to MetaMask Head of Security Taylor Monahan, at least 209,384 ETH—equivalent to approximately $480 million—has been swapped for Bitcoin. This represents a significant portion of the estimated 400,000 ETH stolen in the attack.
Blockchain analytics firm Arkham Intelligence confirmed that over $240 million of the stolen funds had been laundered using THORChain. The hackers have primarily exchanged ETH for native BTC, making it more challenging for investigators to track the illicit assets.
The FBI has linked the attack to North Korea’s notorious Lazarus Group, a well-documented state-backed hacking organization. The Bureau reported that the group has been using sophisticated laundering techniques, including breaking funds into thousands of transactions across multiple blockchain networks. Despite efforts to freeze some of the stolen assets, a substantial amount has already been dispersed beyond immediate recovery.
The complexity of tracking these funds has proven difficult for even experienced blockchain researchers. Pseudonymous analyst SomaXBT described the situation as overwhelming, noting that even tracing two simple transaction hops requires extensive computing power, illustrating the hackers’ meticulous laundering strategy.
SEC Drops Investigation Into Gemini, Coinbase, and Uniswap
The U.S. Securities and Exchange Commission has formally dropped its investigations into Gemini, Coinbase, Uniswap Labs, and several other major crypto firms, marking a significant regulatory shift. This move suggests a de-escalation from the agency’s previous aggressive enforcement stance toward the crypto industry.
Under the leadership of acting chair Mark T. Uyeda, the SEC has signaled a willingness to work more collaboratively with industry stakeholders. Uyeda has appointed Republican Commissioner Hester Peirce to lead a new task force focused on formulating clearer crypto regulations, a move welcomed by market participants seeking long-term regulatory certainty.
Cameron Winklevoss, co-founder of Gemini, expressed mixed sentiments on the decision. “While this marks another milestone in the end of the war on crypto, it does little to make up for the damage this agency has done to us, our industry, and America,” he posted on X (formerly Twitter). He pointed out that legal battles with the SEC have cost the company tens of millions in legal fees and disrupted innovation.
Although the SEC’s stance appears to be softening, some experts caution that the regulatory environment remains fluid. Industry leaders continue to push for comprehensive crypto legislation to prevent future uncertainties surrounding enforcement actions.
Ethereum’s Pectra Upgrade Undergoes Critical Testing
Ethereum developers have successfully deployed the Pectra upgrade on the Holesky testnet, a crucial step before its expected mainnet rollout in April. The upgrade introduces several enhancements aimed at improving the network’s scalability, security, and overall efficiency.
Among the most notable changes is an increase in the maximum validator stake, raising the limit from 32 ETH to 2,048 ETH. This change is designed to optimize staking infrastructure and improve network participation. Additionally, the upgrade doubles the maximum blob count, an important modification that enhances Ethereum rollup scalability by reducing the memory required for transaction data storage.
Developers have also implemented enhancements to Ethereum’s account abstraction features, which improve the user experience by streamlining wallet functionality. These adjustments will make it easier for users to interact with decentralized applications while bolstering security.
The next phase of testing will take place on the Sepolia testnet. If no major issues arise, Ethereum’s development team anticipates a smooth transition to mainnet activation in April, bringing substantial improvements to the network’s performance and usability.