North Korean Hacking Freezes Altcoins... Will 'US Reserve Assets' Ethereum and Solana Rebound?

Source

Minseung Kang

Summary

The article states that Bybit's hack worth 2 trillion won has rapidly deteriorated cryptocurrency investment sentiment, with liquidity contraction expected to intensify market volatility.
Major altcoins including Ethereum and Solana are showing downward price trends, with concerns that the concentration of large volumes could negatively impact medium-term outlook and institutional investor demand.
Experts believe the worst is over in the cryptocurrency derivatives market, while suggesting that macroeconomic trends are likely to be key variables in the recent market.

Bybit's 2 Trillion Won Hack 'Shock'

Cryptocurrency Investment Sentiment Rapidly Deteriorates

Liquidity Contraction... Macroeconomic Trends Variable

SEC's Lawsuit Against Coinbase Viewed Positively

As uncertainty over US interest rate policy grows and risk-averse sentiment spreads, the altcoin market (cryptocurrencies other than Bitcoin) is showing weakness, further compounded by a large-scale hacking incident. Analysts caution that market volatility could intensify as liquidity decreases.

According to industry sources on the 4th, cryptocurrency investment sentiment is freezing after Bybit, one of the world's largest cryptocurrency exchanges, suffered a hack worth approximately 2 trillion won. Cryptocurrency data analytics firm Kaiko stated, "The Bybit hackers have become whales (large investors) holding the 14th largest amount of Ethereum globally," adding, "With such a large volume concentrated in a single group, the medium-term outlook for Ethereum and institutional investor demand is likely to be negatively impacted."

According to South Korean cryptocurrency exchange Upbit, Ethereum, the leading altcoin, gave up the 4 million won level after the hack and extended its losses, falling to around 3.15 million won. During the same period, Solana dropped 27% and XRP fell 24%.

Cryptocurrency data analytics firm Santiment analyzed, "After Bitcoin retreated below the key support level of $86,000, investor sentiment has essentially hit bottom. Bitcoin, Ethereum, XRP, and Solana are showing extremely bearish sentiment." They added, "Historically, markets have often formed bottoms when FUD (Fear, Uncertainty, Doubt) spreads and capitulation psychology prevails with panic selling and abandoning stocks."

However, the cryptocurrency derivatives market believes the worst is over. Kaiko analyzed, "While short-term volatility in the cryptocurrency market surged as derivative traders reacted sensitively to the hacking news," they noted that "the implied volatility (IV) of long-term maturity options has now returned to normal levels. This suggests traders believe the worst is behind us." Some analysts note that while this hacking incident had less impact than the market turmoil caused by Trump's tariff issues in early last month, it delivered a significant shock as it occurred in a much shorter timeframe.

Recent analysis suggests that as liquidity in the cryptocurrency market contracts, macroeconomic trends are becoming an increasingly important variable. Global virtual asset exchange Bitfinex stated in its weekly research report, "Recent institutional buying has decreased dramatically. Overall liquidity is contracting as cryptocurrency ETF (Exchange Traded Fund) and leverage trading decrease," forecasting that "the cryptocurrency market has shown clear coupling (correlation) with traditional financial markets. Major market movements are likely to be determined by macroeconomic trends."

Meanwhile, as President Donald Trump has indicated his intention to include not only Bitcoin but also altcoins such as Ethereum, XRP (formerly Ripple), Solana, and Cardano (ADA) in reserve assets, volatility in altcoin prices is also expanding.

Kang Min-seung, BloomingBit reporter minriver@bloomingbit.io