Overall crypto market weakness…"Yearn Finance liquidity pool incident again shakes the market"

The virtual asset (cryptocurrency) market plunged again from the early hours of the first trading day of December, continuing a bearish trend.

On the 1st (local time), CoinDesk reported that Bitcoin (BTC) fell more than 3% to around $87,000. Ethereum (ETH) dropped nearly 5%, and Solana (SOL), Dogecoin (DOGE), and Ripple (XRP) also recorded declines of more than 4%.

CoinDesk analyzed that this decline accelerated immediately after the exploit incident of the Ethereum-based DeFi protocol Yearn Finance (YFI). The exploit attacker reportedly minted a large amount of yETH in a single transaction to drain the pool and transferred about 1,000 ETH (about $3 million) through Tornado Cash.

Amid the sudden increase in volatility, leverage positions were liquidated in a cascade, and CoinGlass estimated that about $400 million worth of futures positions (mostly long) were liquidated within an hour.

Meanwhile, Bitcoin fell 17.5% in November alone, marking the largest monthly drop since March this year. Ethereum also slid 22%, posting its worst performance since February. At the same time, U.S. Bitcoin spot ETFs saw net outflows of $3.48 billion during November, significantly weakening institutional demand. Ethereum spot ETFs also recorded a record net outflow of $1.42 billion.