Bitcoin Drops Amid Crypto Market Volatility: Bybit Hack and Interest Rate Jitters

Bitcoin Declines Amid Economic Uncertainty

Bitcoin dipped 0.8% to $95,610.2 on Monday, extending last week's 1% drop, as investors remained cautious about the U.S. interest rate outlook. Weak economic data, including a decline in the services PMI and consumer sentiment, has heightened concerns about the Federal Reserve's hawkish stance.

Major Security Breach at Bybit Intensifies Market Anxiety

The crypto market was further rattled by a massive security breach at Bybit, where approximately 401,000 Ethereum (worth nearly $1.5 billion) was stolen during a routine wallet transfer. This incident, one of the largest crypto hacks to date, has intensified negative sentiment. Bybit's CEO reassured clients of the exchange's solvency and announced a 10% bounty for information leading to the recovery of stolen funds.

Investors React to the Hack

The breach led to a surge in withdrawal requests, with Bybit processing over 350,000 transactions. Preliminary investigations suggest potential involvement of the North Korean hacking group Lazarus.

Federal Reserve's Hawkish Stance Adds to Volatility

The Federal Reserve's continued focus on combating inflation, despite slowing economic indicators, has created uncertainty in financial markets. This has particularly impacted cryptocurrency investors, as interest rate policies significantly influence risk asset valuations.

Altcoins Suffer Sharper Declines

Altcoins saw sharper drops than Bitcoin, with Ether falling 2.7% to $2,718.28, XRP declining 3.3%, and Solana plunging 7.4%. Meme tokens also suffered, with Dogecoin down 5.3% and $TRUMP dropping 7.2%. The broader crypto market remains vulnerable amid a risk-off sentiment and heightened macroeconomic uncertainty.