On February 25, 2025, Bitcoin fell below $87,000, falling to its lowest level since mid-November last year.

What happened to the crypto market? Golden Finance Xiaozou combined the reasons for the decline, and the possible reasons are as follows: 1. Many states in the United States have a reservation about Bitcoin reserve proposals

Before this decline, many states in the United States Reserve the Bitcoin reserve proposal.

BRN analyst Valentin Fournier said: "Although U.S. President Trump recently expressed his support for Bitcoin, Montana, North Dakota and Wyoming have three states. None of the proposals for state-level Bitcoin reserves were passed. In order to avoid being accused of using taxpayer funds for speculation, the maker has reserved the state-level Bitcoin reserves, highlighting the risks. "Fournier added: "In the future, bonds will be issued Or partially selling a national reserve strategy backed by the U.S. gold reserves may be a more feasible path to adoption. "

2. Global money supply declines

Some observers believe that Bitcoin’s weakness is consistent with a downward trend in global money supply at the beginning of this year.

Andre Dragosch, head of European research at Biwise, pointed out on the X platform: "There seems to be a lag between the global money supply and the price of Bitcoin."

3. Macro uncertainty. Capital outflows in crypto market

The continuous adjustment of the cryptocurrency market is consistent with the capital outflows in cryptocurrency investment products.

Digital asset investment products have experienced capital outflows for the second consecutive week;

According to CoinShares' report, the total outflows were US$508 million in the week ended February 21.

This shows that institutional investors have reduced their investment in digital assets.

Bitcoin has the largest outflow of funds, with a total amount of US$571 million.

Inflows so far this year fell from $7.4 billion two weeks ago to $6.6 billion last week.

James Butterfill, head of research at CoinShares, attributes this to uncertainty in trade tariffs, currency and inflation. "We believe investors are cautious after the inauguration of the U.S. president and the subsequent uncertainty of trade tariffs, inflation and currency."

4. Crypto and U.S. stocks fell simultaneously and liquidity is exhausted

Financial TimeNewsletter The KobeissiLetter comments on the X platform concerns about the depletion of crypto liquidity:

The market value of the cryptocurrency market has shrunk by 325 billion since Friday morning Dollar. Today at 5 p.m. ET, the cryptocurrency market lost $100 billion in one hour, with no major news during the period. What happened to the cryptocurrency market?

In the last 24 hours alone, we have seen about $150 billion from encryption The money market evaporates. The selling scope has expanded, and almost all crypto assets have fallen sharply. Even the meme currency market seems to have lost a considerable amount of liquidity.

So, what exactly happened?

It all seems to have started with Solana, which has fallen 22% since last Friday. During the meme coin craze, Solana shows extremely strong relative strength. However, as the meme coin craze subsided, Solana also began to weaken. For some time, Solana's selling has nothing to do with Bitcoin.

However, as the S&P 500 began to decline last Friday, Bitcoin also Joined the decline. As shown in the figure below, the decline of the S&P 500 is accompanied by the acceleration of Bitcoin sell-off. Today, Bitcoin is losing its relative strength after falling below the $98,000 support level.

5. Hedge funds or close Bitcoin ETF

BitMEX Co-founder Arthur Hayes posted on social media that many IBIT holdings Those are hedge funds, who earn higher returns than short-term US Treasury bonds by long ETFs and short CME futures. If the price of BTC decreases, i.e., the gap between ETF prices and futures prices, these funds will sell IBIT and cover CME futures. These funds are currently profitable, and considering the basis is close to U.S. Treasury yields, they will close positions during the U.S. trading session to cash in on profits.

6. Citadel Securities enters the crypto market.

It is quite strange that this happened when Citadel added it to it.Hours after the cryptocurrency stance made a major change.

Today, Bloomberg announced that Citadel Securities, with a size of $65 billion, is seeking to become a liquidity provider for Bitcoin and cryptocurrencies. The market sees this as a "sell the news" event.

7. Bybit hacking attacks to combat market sentiment

In addition, Bybit on February 21 The hacker attack also seems to have hit market sentiment. Arkham Intelligence called the attack "the largest financial theft in history" after the $1 billion theft of Iraq's central bank in March 2003.

In fact, the stolen funds scale coins involved in the Bybit hacking incident The second largest hacker attack in history is more than twice as high. The largest cryptocurrency hacker attack was the stolen $611 million in August 2021.

Ethereum's weakness has also put more pressure on the entire cryptocurrency market. Hacker attacks weaken market confidence.

The technical side also seems to have lost momentum.

However, this does not mean that the cryptocurrency market will enter a long-term bear market. In this bull market, we have witnessed countless 10% corrections in Bitcoin. Technical callbacks are benign and healthy.

8. SBF returns to X platform

Most importantly, Sam Bankman-Fried relies on Return to X platform.

As the cryptocurrency plummeted, SBF returned and said he "expressed his sympathy for his employees." Meanwhile, DOGE and Elon Musk are preparing for more massive layoffs in the federal market.

Finally, risky assets such as Bitcoin are pulling back as volatility returns to the stock market.

We have seen historical levels in 2024 Risk preferences and continue into 2025.

The risk preference callback means less liquidity in the cryptocurrency market.

This must have happened before.

We all know that cryptocurrency markets need liquidity to flourish. In general, there is currently no specific factor driving cryptocurrencies to fall. On the contrary, it is a combination of factors that have led to a decline in liquidity.

Finally, we end the article with a sentence from Andre Dragosch: "Recent money supply It has bottomed out, which means the price decline in Bitcoin may not last long. ”