$800B Lost as Crypto Buzz Fades
SEC Meets Robinhood, Saylor on Crypto
Bybit Secures Funds After $1.4B Hack
Bitcoin Falls to $83K, 20% Below High
Second BTC Reserve Bill in Georgia
$800 Billion Loss Rocks Crypto World as Trump-Driven Excitement Wanes
As the Financial Times (FT) reported Wednesday (Feb. 26), this rout comes as the enthusiasm within the crypto sector that came with Donald Trump’s election victory begins to fade.
Bitcoin, the world’s most popular crypto, has lost more than 15% this month, with its pricing falling to $86,500 Wednesday. Other tokens have seen even larger losses, thanks in part to shaken confidence following a record hack of the Bybit exchange.
But as the FT notes, traders are also frustrated with Trump’s speed at following through on some of the promises he made to the cryptocurrency sector during the campaign.
“The slower than anticipated rollout of any major pro-crypto policies has led to disappointment,” said Gadi Chait, investment manager at Xapo Bank.
The report, citing CoinMarketCap data, says the nominal value of the crypto industry has dropped by $810 billion from its high in January. Investors also withdrew close to $1 billion from bitcoin exchange traded funds (ETFs) on Tuesday (Feb. 25). And investors are also concerned about Trump’s tariffs, leading them to seek less risky assets.
“There has been a recalibration of expectations regarding the Trump administration’s crypto stance,” Chait added.
Some traders had hoped the U.S. under Trump would start buying bitcoin or pass new regulations that paved the way for big banks to purchase crypto.
However, the new president’s most high-profile crypto-related move so far has been launching a so-called memecoin just before taking office. That coin’s price has plummeted, while many figures in the crypto world criticized Trump for not taking the assets seriously enough.
In other crypto news, PYMNTS discussed the topic of digital asset regulation earlier this week with Amias Gerety, a former assistant treasury secretary and partner at QED Investors.
While bipartisan stablecoin legislation is gaining momentum, he warned PYMNTS CEO Karen Webster that the real fight centers around “narrow banking” — where financial institutions hold deposits without lending.
“The Fed is nervous this could starve the economy of credit,” he said.
While supporting private blockchain innovations like tokenized mortgages (“an awesome use case”), he warned that dollar-pegged stablecoins effectively create “a 24/7 global payment rail” outside the world of traditional banking, posing geopolitical dilemmas.
“Do we want Nigerian businesses dollarizing via USDC?” Gerety asked, pointing out that such access could bolster the dollar but destabilize foreign economies. The legislation’s success depends on reconciling banks’ risk appetite with the borderless nature of crypto.
Robinhood, Michael Saylor and Crypto Council Innovation members meet with SEC’s crypto task force
Members of the Crypto Council for Innovation, including from Coinbase and OpenSea, as well as Strategy founder Michael Saylor and Robinhood, are among the latest to meet with the new Securities and Exchange Commission’s crypto task force urging for changes in how crypto is regulated.
About 20 members met with that task force on Friday, according to a note published on the SEC’s site. Saylor also separately met with the task force on Friday to lay out his priorities for regulating crypto, according to another note. Robinhood met with the crypto task force earlier, on Feb. 19, according to the meeting log.
“While Congress continues to pursue much needed legislation, the Commission has—and has had since 1996—the authority now to establish at least a basic, provisional regulatory regime for digital assets,” said Dan Gallagher, Robinhood’s chief legal, compliance and corporate affairs officer in the memo.
The SEC could work on rulemaking related to registration requirements, antifraud protections, and custody, among others, Gallagher added.
Over the past several weeks, the SEC has been making moves to re-evaluate its approach to regulating crypto after years of what some in the crypto industry called a “regulation by enforcement” approach. Under the Biden administration, Gensler was skeptical of crypto, calling on crypto firms to register with the agency and saying that most cryptocurrencies were securities.
Earlier this year, acting Chair Mark Uyeda tapped fellow Republican Commissioner Hester Peirce to lead the crypto task force, which includes priorities such as classifying some tokens as “non-securities.” The task force has also met with web3 venture firm Paradigm and earlier this exchange Nasdaq and infrastructure firm Jito Labs.
Meanwhile, the SEC has also begun dropping cases brought under the previous administration’s leadership. Last week, Coinbase announced on Friday that the SEC plans to drop its case against the exchange. Later, investigations were dropped involving OpenSea and on Monday, Robinhood said the SEC had also concluded its investigation.
CCI’s members spoke with the SEC task force about several priorities including guidance on when cryptocurrencies may become securities and clarify that 1:1 dollar stablecoins are not securities.
During the SEC’s meeting with Saylor, the founder focused on creating a taxonomy to define terms within the industry as well as creating a regulatory framework.
“By establishing a clear taxonomy, a legitimate rights-based framework, and practical compliance obligations, the United States can lead the global digital economy,” Saylor said. “A capital markets renaissance fueled by digital assets will unlock trillions in wealth, empower millions of businesses, and solidify the US dollar as the foundation of the 21st-century digital financial system.”
Nasdaq also called for a regulatory framework in its earlier meeting with the SEC.
“This regime should be firmly rooted in existing federal securities laws, which have served investors well for almost 100 years,” the exchange said. “However, the regime should provide appropriate tailoring of these laws to account for certain unique.
Bybit Fully Covered $1.4B Ether Gap after the Hack; Handled $6.1B in Withdrawals
Bybit, the cryptocurrency exchange hacked last Friday, withstood an outflow of over $6.1 billion over the weekend. However, the exchange’s CEO announced that the platform replaced the $1.4 billion worth of Ether stolen in the attack.
According to DeFiLlama, the total amount of customers’ assets held by Bybit was around $16.9 billion, which dropped to $10.8 billion as of press time. The withdrawal pressure came as hackers managed to drain roughly 70 per cent of the exchange’s clients’ Ether in the attack.
Assurance of Equal Reserves
Bybit’s CEO, Ben Zhou, posted on X (formerly Twitter) that his exchange “has already fully closed the ETH gap,” adding that “Bybit is again back to 100% 1:1 on client assets through Merkle tree.” He further noted that Bybit would soon publish an audited proof-of-reserves report.
Zhou’s confirmation came after blockchain analytics firm Lookonchain estimated that Bybit received 446,870 Ether, worth around $1.23 billion, which was about 88 per cent of the stolen amount, from loans, whale deposits, and purchases.
Out of the total, the hacked exchange bought 157,660 Ether, worth about $437.8 million, from crypto investment firms Galaxy Digital, FalconX, and Wintermute through over-the-counter transactions. The exchange bought another $304 million of Ether from centralised and decentralised exchanges.
The Largest Crypto Heist
The attack on Bybit has resulted in the biggest heist from any crypto exchange to date. On-chain analysts linked the attack to North Korea’s notorious Lazarus Group. Bybit also launched a bounty program with $140 million to gather leads on the massive cyberattack.
Although the exchange did not publicly pinpoint the vulnerability that led to the attack, its CEO said, “We know the cause is definitely around the Safe cold wallet. Whether it’s a problem with our laptops or on Safe’s side, we don’t know.”
Safe is a decentralised custody protocol that offers smart contract wallets for managing digital assets. Some exchanges have integrated Safe, enabling users to retain control of their funds while using multi-signature functionality to improve the security of their cold wallets.
Following the Bybit attack, Safe temporarily shut down its smart wallet functionalities, which increased the hacked exchange’s concerns over mounting withdrawal requests. However, it coordinated with Safe and other platforms to establish a smooth process and honour the withdrawal requests
Bitcoin falls 5% to $83,000 mark, declines 20% from peak; what’s behind the plunge?
The largest cryptocurrency Bitcoin fell over 5 per cent, reaching $83,740 during intra-day trading on Thursday, as the cryptocurrency market experienced selling pressure.
Bitcoin has plunged nearly 20 per cent from its record high since Donald Trump’s inauguration in January, as his aggressive approach toward both allies and geopolitical rivals has hit investor confidence, sparking a risk-off sentiment. Additionally, a record-breaking hack of the Bybit exchange last week also rattled the crypto market.
Also Read | Bitcoin slides below $90,000, over $100 billion wiped out from crypto market
Bitcoin fell for a fourth consecutive day, dropping around 5.6 per cent to $83,744, bringing its decline of the period to around 13 per cent. That’s the biggest four-day slump since August. Other tokens such as Ether and Solana continued to be hit harder, with each down between 7 per cent and 10 per cent, respectively.
Why are bitcoin prices falling?
According to experts, ETF outflows and Trump’s EU tariff threats have further pressured the market, with some anticipating a fall in BTC prices to $74K.
“The crypto market has entered a bear phase with Bitcoin declining over 20% from its January peak of $109,350 to an intraday low of $83,740. Bitcoin’s decline below $85K is the largest sell-off of 2025, with 79.3K BTC sold at a loss in 24 hours, and a $300 billion flash crash in the crypto market signals rising volatility and investor anxiety,” said Avinash Shekhar, Co-Founder&CEO, Pi42.
Also Read | Why gold price rally trumped Bitcoins in 2025? EXPLAINED
Shekhar further added, “Meanwhile, XRP’s open interest has hit its lowest level in 2025, reflecting broader uncertainty in altcoins also. Institutional selling and macroeconomic instability have shaken confidence, raising questions about whether the crypto market is facing a temporary correction or the start of a deeper downturn. While Bitcoin’s dominance is rising, suggesting some long-term faith remains, the increasing frequency of flash crashes and aggressive liquidations indicates a fragile market. The coming weeks will test whether Bitcoin and crypto can withstand these pressures or if further declines are on the horizon.”
Georgia State Pushes Harder for Bitcoin Stockpile, Senate Proposes Second BTC Reserve Bill
The U.S. state of Georgia has introduced a second Bitcoin reserve bill, 10 days after proposing its first legislation, allowing the state treasurer to invest in the largest crypto.
The new Bitcoin Reserve Bill SB 228, allows the state to invest in Bitcoin without any investment restrictions. The bill amends Section 3 of Chapter 17 of Title 50 of the state code relating to state depositories.
Georgia’s second Bitcoin stockpile bill has emerged as a partisan competitor to the previous bill. Under SB 228, the State Depository Committee will be authorized to allow the State Treasury Department to invest in Bitcoin.
To compare, the SB 178 bill introduced 10 days ago has Republican sponsors, while SB 228 is backed by Democrats.
Further, the bill requires the State Treasury Department “to develop policies and procedures for acceptance, storage, and transacting of Bitcoin.” Additionally, it stipulates that BTC held by the state government shall be in accordance with policies and procedures.
The new legislation was jointly proposed by four Senators including, Sen. Esteves and awaits review at the Georgia General Assembly.
Who Will Monitor Strategic Bitcoin Reserves?
According to Bitcoin Reserve Monitor, 20 out of 50 states in the US are stepping up with legislation to hold Bitcoin in strategic reserves. So far, none of the states have passed a Bitcoin reserve legislation.
According to Adam Levine, CEO of Fireblocks Trust Company and SVP, Corporate Development & Partnerships, Bitcoin needs “specialised custody solutions” unlike traditional reserves like gold.
“The top priority must be leveraging the safest solution to preserve their Bitcoin reserves,” he told Cryptonews via mail. He added that this would help mitigate risks like theft, mismanagement, and regulatory uncertainty.
“Most governments today lack the depth of experience needed to operate digital assets. Therefore, the most prudent approach is for these governments to procure the services of licensed custodians who have the appropriate combination of cybersecurity resilience and digital asset operational experience.”
Appropriate custodians will assure governments to preserve their constituents’ financial backing in “the most secure manner,” Levine noted.
