Your Monthly Crypto Recap

Dear Subscriber,

February 2025 served up a crypto rollercoaster that could make even seasoned traders reach for their motion sickness bags.

From Bitcoin (BTC, “A”) flirting with the ever-important $100,000 level to billion-dollar hacks and regulatory plot twists, this month gave us plenty to unpack.

In fact, let’s do exactly that.

Let’s dive into February’s biggest market shake ups to see what these events reveal about the crypto market now … and in the near future.

Bitcoin's $100K Flirtation

What happened: Bitcoin surged to nearly $100,000 in early February … before plummeting after President Trump announced new tariffs: 25% on imports from Mexico and Canada and 10% on Chinese goods. This triggered a broad risk-off move that saw Bitcoin drop to around $91,000 in a single day. At the time of writing, BTC is trading near $84,400.

What's particularly telling here is how quickly sentiment shifted once the tariff announcements hit.

When genuine macroeconomic fear rippled through markets, Bitcoin didn't provide the counter-cyclical safe haven it was famous for in the past. Instead, it moved in tandem with risk assets, suggesting that institutional investors — now a significant force in crypto markets — still categorize Bitcoin alongside their speculative allocations rather than their inflation hedges.

It’s sad, really. Bitcoin finally got the institutional adoption it craved, only to have its spirit domesticated in the process. The rebel currency that once promised financial sovereignty to the masses now dances to the tune of Wall Street algorithms and institutional risk models.

Perhaps this was inevitable; revolutions either fail or become the new establishment.

Still, for those of us who witnessed Bitcoin's early promise, it's hard not to feel a twinge of nostalgia for the days when the OG crypto answered to no one other than its users.

Regulatory Whiplash

What happened: The SEC signaled it will drop its lawsuit against Coinbase. The lawsuit alleged that Coinbase operated an unregistered securities exchange. Simultaneously, the Trump administration took crypto-friendly policy actions, including an executive order directing agencies to provide "regulatory clarity" for digital assets and installing crypto-sympathetic officials in key roles.

Perhaps nothing better encapsulated February's crypto landscape than the SEC's stunning reversal on the Coinbase lawsuit. After years of aggressive enforcement under previous leadership, this about-face signals we've entered the "regulatory pendulum" era.

The whiplash isn't coincidental. It’s a reflection of how deeply politicized crypto regulation has become.

With President Trump installing crypto-friendly officials and signing executive orders for "regulatory clarity," crypto is shifting from fringe technology to political football.

Sen. Elizabeth Warren's (D-MA) continued warnings stand in stark contrast to Sen. Cynthia Lummis's (R-WY) advocacy, showing how crypto has become another partisan battleground.

Bybit’s Record-Breaking Hack

What happened: On Feb. 21, 2025, Dubai-based cryptocurrency exchange Bybit suffered a catastrophic security breach resulting in the theft of approximately $1.5 billion worth of Ethereum (ETH, “B+”). The attack occurred during a routine transfer between Bybit's cold storage and warm wallet systems when hackers most likely used sophisticated phishing or malware techniques to compromise authorized personnel, ultimately bypassing the exchange's security protocols.

Blockchain analytics firms Chainalysis and Elliptic have linked the attack patterns to the notorious North Korean state-sponsored Lazarus Group, while Bybit has offered a bounty of up to 10% for information leading to fund recovery.

The Bybit hack is now crypto’s largest-ever theft at $1.5 billion.

And it offers perhaps the most sobering and heartening lessons of the month.

That hackers could compromise a supposedly secure multi-signature system through targeted phishing attacks isn't a failure of technology. Rather, it is a stark reminder of the human element in security. When failure occurs, it’s always the weakest link that gets broken.

On the other hand, my colleague Juan Villaverde shared his positive impression of the Bybit team from his experience as a customer in this situation. Not only was Bybit able to make its customers whole … it maintained normal operations through the hack and remains solvent.

This is a sign of growth and maturity in the market. Especially considering smaller hacks on large exchanges — like the 2014 Mt. Gox attack — have had a far more severe impact on the broad market in the past.

Still, the sophistication of this attack means crypto security still has more room to grow.

For now, the biggest takeaway for any crypto user is the industry mantra "not your keys, not your crypto."

This rallying cry echoed with renewed vigor across social media as users rushed to withdraw their assets from exchanges. In plain English, it means unless you actually maintain custody of your own crypto assets, that’s not technically your crypto … and it remains vulnerable to attack.

Those who do not learn the lesson will be doomed to repeat it.

Values vs. Valuation

What happened: Ethereum co-founder Vitalik Buterin stirred controversy with his pointed remarks about crypto's ethical direction. On Tako — a modular social protocol — Buterin expressed disappointment with criticism that Ethereum is "bad and intolerant" for not embracing "blockchain casinos."

He went further, stating that if the blockchain community undergoes this kind of "moral reversal," he would have "no interest in participating in the blockchain." His comments were widely interpreted as criticism of other blockchains — particularly Solana, which has become known for its proliferation of memecoins — and possibly a subtle dig at the SEC regarding how it views the ETH market.

To my readers, this will come as no surprise: I've never hidden my disdain for the speculative excess that has come to dominate crypto.

What began as a technological movement to democratize finance has increasingly become a vehicle forget-rich-quick schemes and artificial price pumps.

Buterin's frustration echoes mine and reveals a growing identity crisis within crypto. The fact that one of the industry's most influential founders feels compelled to draw such a firm ethical line should be a wake-up call.

Instead, many dismissed his concerns as elitist or out of touch — proving his point that parts of the community have lost sight of the transformative potential that originally inspired this technology.

The Transparency Paradox

What happened: U.S. Senator Rand Paul called for an audit of gold reserves at Fort Knox, which haven't been fully verified in decades. Bitcoin advocates, including Senator Cynthia Lummis, contrasted gold's lack of transparency with Bitcoin's open ledger, arguing that Bitcoin reserves can be audited by anyone, anytime. The "Bitcoin fixes this" response to gold audit challenges signals crypto's maturing narrative: from purely technological innovation to governance critique.

It’s no secret that I've long maintained blockchain's radical transparency is one of its most revolutionary aspects. But this Fort Knox debate forced me to confront our industry's selective application of these principles.

And it’s an issue that must be addressed.

Yes, Bitcoin's ledger is transparent. We can trace every mined coin from genesis to present day. But this technological openness has become a convenient shield to obscure how opaque much of our ecosystem remains.

The exchanges where millions trade daily … the lending platforms promising outsized yields … the stablecoin issuers claiming full reserves …

Many are able to operate with less transparency than the traditional banks we criticize.

True transparency isn't just about verifiable transactions on a public ledger. It encompasses honest accounting, comprehensive risk disclosures and meaningful accountability throughout the entire system.

If we truly believe in the revolutionary potential of blockchain transparency, we must hold our own institutions to standards higher than those we criticize — not selectively apply these principles when it suits our narrative.

What’s Next

This month has laid bare crypto's well-known flaws and fundamental contradictions.

A technology created to provide certainty in an uncertain world … now generates its own form of volatility.

An innovation meant to democratize finance … increasingly finds its wealth concentrated among the early and well-connected.

A movement founded on transparency principles … often falls short of applying those same standards to itself.

These tensions aren't accidental: They're inherent to a technology in adolescence, caught between idealistic origins and pragmatic reality.

What we're witnessing isn't just market turbulence. This is an industry-wide identity crisis playing out in real time.

The path forward requires honest self-reflection about where we've strayed from core principles and why. Are we building financial infrastructure that serves humanity or merely replicating traditional finance's weaknesses with flashier technology?

Now, don’t get me wrong. I still fully believe in this technology and the market’s ability to maintain its original promise.

For all its contradictions, crypto still represents our best chance at reimagining financial systems that work for everyone.

But this won't happen through hype cycles or regulatory arbitrage. Rather, we need to focus on the tough but necessary process of returning to those core ideals. That means the patient building of technology that embodies the transparency, accessibility and fairness that sparked the crypto revolution in the first place.

As the regulatory pendulum swings and markets fluctuate, my stance remains constant: Focus on fundamentals, not fluctuations.

The projects that will endure aren't those with the loudest marketing or highest short-term returns. The ones that will rise to the top of this crowded market will be those that solve real problems with genuine utility.

This is important to keep in mind as you continue to navigate the crypto markets and look for long-term investments.

Best,

Jurica Dujmovic