Market Overview: Crypto Stabilizes Amid Bybit Hack and Macro Volatility

On Sunday, February 23, U.S. stock futures rebounded slightly after a sharp decline on Friday. Gold futures climbed to $2,954 per ounce, reflecting heightened risk aversion, while oil prices dipped to $70.2 per barrel amid uncertain macroeconomic conditions.

Bitcoin saw a brief pullback following the Bybit hack but has since recovered to above $95,000. The broader crypto market remains in correction mode, with major altcoins declining alongside BTC’s retracement. Total crypto market capitalization now stands at $3.26 trillion.

The percentage of Bitcoin holders in profit also saw a minor dip, reaching 84.1%—a notable decrease compared to previous times when BTC traded at similar levels. This shift suggests that a growing number of investors who entered the market near recent highs are experiencing pressure, leading to short-term volatility and market hesitancy.

Bybit Hack: What Happened and How It Was Resolved

Bybit suffered a major security breach, but the exchange has now fully stabilized operations. Despite the financial loss, Bybit ensured that user funds remained secure, absorbing the impact itself.

CEO Ben Zhou actively engaged with other crypto firms and exchanges to mitigate the damage and provide transparency to investors. On-chain data from @lookonchain suggests that Bybit repurchased 266,694 ETH (~$742 million) post-hack. These purchases were split as follows:

• 157,660 ETH (~$437.82 million) acquired via OTC transactions from Galaxy Digital, FalconX, and Wintermute.
• 109,033 ETH (~$304.12 million) purchased from decentralized and centralized exchanges.

Bybit’s rapid response to repurchase a significant portion of lost ETH highlights the exchange’s commitment to mitigating long-term financial risk. This move reassures investors that Bybit is not willing to take on excessive exposure to ETH price volatility.

Bybit also announced that it has now fully replenished the missing funds, and a new Proof of Reserves (POR) audit will soon be released to verify that customer assets remain backed 1:1.

Exchange and Industry ResponseSeveral crypto platforms and exchanges took immediate action to freeze stolen assets. However, the hacker successfully converted 37,900 ETH (~$106 million) into BTC, making further fund recovery difficult due to Bitcoin’s decentralized nature and lack of freezing mechanisms.

One entity, eXch, refused to assist Bybit in freezing funds. The firm stated that Bybit had previously damaged its reputation, citing past disputes. While eXch denied allegations of laundering stolen Bybit funds, it admitted that some of the hacked assets passed through its platform. The company has pledged to donate an undisclosed portion of the misappropriated funds but criticized Etherscan for labeling its addresses unfairly.

Interestingly, eXch operates as a small, low-liquidity exchange with no KYC requirements, making it attractive to traders seeking privacy and regulatory avoidance. However, thin order books and poor liquidity mean that traders often wait hours for withdrawals, raising concerns over the platform’s operational integrity and legitimacy.

Why an Ethereum Rollback Isn’t Possible

Following the Bybit hack, some community members proposed rolling back Ethereum transactions to reverse the illicit transfers. Ethereum developer Tim Beiko swiftly dismissed this idea, outlining why an Ethereum rollback is impossible under current circumstances.

The DAO hack of 2016 was a unique case, where Ethereum itself had a vulnerability that led to the exploit. At that time, stolen funds were locked for a month, allowing the Ethereum community to initiate a rollback, which ultimately led to the Ethereum (ETH) and Ethereum Classic (ETC) split.

However, in Bybit’s case:

• The Ethereum network functioned correctly. The exploit was related to user security or wallet vulnerabilities, not Ethereum’s protocol.
• Hacked funds were moved instantly, leaving no opportunity to intervene.
• DeFi protocols and cross-chain bridges complicate reversals, as a rollback could disrupt thousands of unrelated transactions.
• The Ethereum community is against manual interventions, evident from the 2018 rejection of EIP-999, which sought to recover lost funds from a smart contract error.

The core principle of Ethereum’s decentralization is that transactions cannot be undone, regardless of the circumstances. While hacks are unfortunate, allowing rollbacks would fundamentally damage Ethereum’s credibility and immutability.

Warren Buffett’s Final Letter to Berkshire Shareholders

Billionaire investor Warren Buffett released what may be his final annual letter to Berkshire Hathaway shareholders, as he prepares to transition leadership to Greg Abel.

In his letter, Buffett acknowledged past mistakes and highlighted Berkshire’s record cash reserves, which have now reached $334 billion. The fact that Buffett continues to accumulate cash has sparked speculation that he is anticipating an economic downturn.

However, Buffett dismissed speculation that he is preparing for a market collapse, pointing out that Berkshire’s core stock holdings remain strong. His strategy of long-term value investing remains unchanged, even as economic uncertainty looms.

Key Takeaways from Buffett’s Letter

1. Acknowledging Mistakes
   • Buffett admitted capital allocation errors, including overpaying for certain acquisitions.
   • He emphasized the importance of swiftly correcting misjudgments.
2. Transparency in Reporting
   • Unlike most corporate reports, Buffett openly acknowledges errors. Between 2019 and 2023, he used words like “mistake” or “error” 16 times, a level of transparency unmatched by most major firms.
3. Dividends and Cash Strategy
   • Berkshire has only issued one dividend in history, dating back to 1967. Buffett views dividends as inefficient compared to reinvestment.
4. Berkshire’s Expanding Presence in Japan
   • Since 2018, Berkshire has increased investments in Japan’s five largest trading firms: ITOCHU, Marubeni, Mitsubishi, Mitsui, and Sumitomo.
   • This shift highlights Berkshire’s strategy of diversifying beyond U.S. markets.

Crypto Adoption and Investor Trends

While crypto adoption continues to grow, public awareness remains relatively low. A survey from Independent Reserve found that 31% of respondents viewed Trump as pro-crypto, while 60% remained neutral—indicating that a large portion of the public still does not actively follow crypto developments.

Among crypto investors, sentiment is notably more bullish:

• 50% of crypto investors believe Trump’s policies favor the industry.
• 44% remain neutral, while only 6% view him as negative for crypto.

Despite limited mainstream awareness, investor interest in crypto remains strong, particularly in emerging markets:

• 95% of crypto investors in Argentina, Brazil, Colombia, and Mexico plan to increase their holdings in 2025.
• Latin America is projected to lead global crypto adoption in 2024, with an estimated 116% growth.

Crypto Adoption Trends and Investor Sentiment

Despite crypto’s growing adoption, many individuals still remain unaware of its broader implications. A recent survey by Independent Reserve found that 31% of respondents believe Trump’s presidency would benefit crypto, while 60% remain neutral—indicating that a significant portion of the population still does not actively follow crypto developments.

Among crypto investors, sentiment is noticeably more bullish:

• 50% of crypto holders believe Trump’s policies would positively impact the industry.
• 44% remain neutral, while only 6% view him as a negative force for crypto.

Binance’s Growth and Market Expansion

New data from Binance Research shows that 95% of crypto investors in Latin America plan to increase their holdings in 2025. The region is projected to see 116% crypto adoption growth, with over 55 million crypto users, making up nearly 10% of global adoption.

Binance also released its 2024 annual report, highlighting its rapid expansion:

• Binance Pay processed $72.4 billion in payments, compared to just $2.5 billion in 2021.
• USDT dominated stablecoin transactions, accounting for 80% of total volume ($57 billion).
• USDC saw massive adoption growth, with transaction volume surging by 1,338%.

Institutional Bitcoin Adoption Continues

Despite market turbulence, major corporations and institutions continue integrating Bitcoin into their financial strategies:

• HK Asia Holdings Limited increased its BTC holdings to 8.88 BTC after acquiring an additional 7.88 BTC.
• Altvest Capital Limited, a major financial firm in South Africa, adopted Bitcoin as its primary reserve asset, marking a historic shift in African institutional crypto adoption.
• Costa Rica’s largest state-owned bank, Banco Nacional, announced plans to launch a Bitcoin ETF through BN Fondos, expanding crypto access to retail investors.

Meanwhile, Georgia’s state legislature introduced its second Bitcoin Reserve bill (SB 228), aiming to permit unlimited BTC investment for the state.

The ECB’s Blockchain Integration

The European Central Bank (ECB) has begun developing a distributed ledger-based payment system, paving the way for CBDC implementation. This initiative is part of a broader strategy to integrate digital assets into the European financial system.

Market Stability and Future Outlook

The Bybit hack exposed security vulnerabilities but also demonstrated the resilience of centralized exchanges in recovering lost assets. The debate over Ethereum’s rollback reinforces the need for decentralization and immutability, while Buffett’s final letter underscores the importance of long-term investment principles.

As crypto adoption continues to accelerate, investor confidence remains high, despite short-term setbacks. Whether it’s Bitcoin’s recovery, Ethereum’s evolving governance, or Buffett’s investment wisdom, one thing remains clear: strategic patience and disciplined investing are key to navigating uncertain markets.