Key Points:

• Early gains in cryptocurrencies were impacted by the $1.5 billion hack at Bybit.
• A drop in U.S. stocks further pressured the cryptocurrency market.
• Contributing news included poor consumer sentiment reports and a concerning new coronavirus variant from China.

Article Overview:

Recent volatility in the cryptocurrency markets was initially supported by positive regulatory signals regarding a lawsuit dismissal against Coinbase (COIN). This led to a temporary 5% spike in COIN’s price and similar gains in other crypto-related platforms, like Robinhood.

However, optimism quickly turned to concern when Bybit reported a major security breach, losing approximately $1.5 billion—a record in crypto theft. Bitcoin and Ether saw immediate declines of around 2% following this news.

As trading continued, U.S. stock markets experienced modest losses which intensified by the afternoon session. Contributing factors included a lower-than-expected Michigan Consumer Sentiment Index, falling to 64.7, compared to a projection of 67.8. Additionally, a new coronavirus strain—a close relative of the one that provoked the 2020 pandemic—was identified, which may have added to the selling pressure.

By the end of the trading day, significant declines were observed across major indices with the Nasdaq down 2.2% and the S&P 500 declining by 1.7%. Consequently, Bitcoin’s value reverted down to around $95,000, marking a near 4% decrease over the past 24 hours.