Crypto market review February 2025: Donald Trump rules the roost

Market Overview

After a January marked by BTC consolidating within a range between $93,000 and a new all-time high of $109,500, February 2025 saw significant volatility in the cryptocurrency market. The optimism surrounding a "pro-crypto" Trump administration was quickly overshadowed by trade tensions fueled by the U.S. president and a clear disengagement from institutional investors.

On February 3, 2025, the market was shaken by a sharp correction following Donald Trump's announcement of new tariffs on imports. The Bitcoin (BTC) price initially dropped below $92,000 before rebounding above $102,000 by the end of the day.

However, this trade war context plunged risk markets—particularly cryptocurrencies—into uncertainty. On February 25, another wave of tariff announcements increased market stress, causing BTC to break below the lower bound of a range that had persisted since November 2024, reaching a monthly low of $78,000.

As a reference, Bitcoin (BTC) fell by 17% over the month, while Ethereum (ETH) lost 32%, confirming a tense market.

Among the top-performing assets of the month, Story Protocol (IP) skyrocketed by +450%, fueled by enthusiasm for its blockchain dedicated to intellectual property management. On the day of the IP token launch, our team provided a full presentation of the protocol, which you can read here:

Other notable performances include Maker DAO’s MKR token, which surged by 49.9%, while Mantra’s blockchain token OM continued its parabolic rise (+40.7%). The rebranding of Fantom to Sonic led to a more than 30% increase in the S token price in February 2025. Our team also provided an analysis of Fantom’s transformation into Sonic:

Conversely, several assets suffered sharp corrections. Raydium (RAY) dropped by 68.42%, driven by the launches of the TRUMP, MELANIA, and LIBRA memecoins, which drained trading volumes from Solana DEXs, decimating much of the ecosystem’s tokens (memecoins and AI agents) and exposing issues related to insider activities within the Jupiter, Meteora, and Pumpfun teams.

Similarly, Trump’s memecoin (TRUMP) saw its price cut in half (-52.85%) after initial hype faded, while Solana’s (SOL) price took a direct hit from these developments, plunging by 42%. Finally, Mantle’s (MNT) token, closely tied to Bybit, dropped by 42% following a major hack on the platform.

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Macroeconomic Context

February was marked by a flood of macroeconomic developments influencing both traditional markets and Bitcoin. If one factor could sum up all these movements, it would undoubtedly be Donald Trump.

Note: This section is brought to you by the team at infoeco, a media outlet specializing in economic news and traditional financial markets.

Tariffs Shake Financial Markets

Since Donald Trump took office in January, Bitcoin’s one-month correlation with the S&P 500 has completely collapsed. It remains slightly positive but is approaching zero.

Ironically, Trump was expected to be a pro-business and pro-crypto president. However, his initial economic decisions surprised and disrupted expectations: new tariffs on Canada, Mexico, and China rattled Wall Street, triggering a massive market correction. According to Bloomberg, the S&P 500’s market capitalization has shrunk by $3.6 trillion from its peak.

Technology stocks, particularly those fueled by AI enthusiasm, suffered the most. NVIDIA plunged by over 20%, and Tesla by more than 40%. This volatility is eerily similar to that of the crypto market but on a much larger scale.

The domino effect also hit BTC. Despite the lower correlation, stock market disruptions indirectly impacted Bitcoin, which remains sensitive to major macroeconomic trends.

Geopolitics and Ukraine as Sources of Tension

Another major issue of the month: the war in Ukraine. A potential peace deal orchestrated by Trump, based on a mineral contract proposal to Zelensky, had an immediate effect on European defense markets.

Trump’s proposed plan was a wake-up call: Washington will no longer guarantee European security. As a result, the EU must prioritize independence, starting with a strong military. This realization led to hundreds of billions of euros in defense investments, causing defense sector stocks to soar.

That said, the Ukraine situation has had little impact on the crypto market. BTC reacted far more to tariff policies and U.S. strategic reserve announcements than to war-related news. Unsurprisingly, Bitcoin remains primarily influenced by U.S. decisions rather than European ones.

Donald Trump, the Market’s New Conductor

This early stage of Trump’s presidency confirms one thing: he is setting the pace, and he will likely continue to do so for the next four years. The issue is that his temperament is unpredictable, and he can change his mind multiple times a day, making short- and medium-term projections difficult.

This instability worries investors, who are shifting away from U.S. equities to safer assets like U.S. debt. But while volatility and uncertainty push some away from the dollar, Bitcoin could emerge as a beneficiary. If confidence in the U.S. currency wanes, BTC could become a serious candidate for portfolio diversification.

However, the real threat may lie elsewhere: inflation. Tariffs mean higher consumer prices, and that is precisely what economists fear—a resurgence of inflation in the U.S.

Political instability, escalating trade tensions, and inflation fears: these are the explosive ingredients shaping the markets—and Bitcoin—in the coming months.

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February 2025’s Key Events

The LIBRA Token Crash Hits Solana

One of February’s most notable events was the launch (and subsequent collapse) of the LIBRA memecoin. Launched on Solana with initial backing from Argentine President Javier Milei and promoted as a token to fund Argentina’s economic development, it quickly gained traction among speculators before crashing within 24 hours.

Upon launch, the token reached a fully diluted valuation (FDV) of $4.6 billion in just 30 minutes, fueled by speculation and political backing. However, momentum reversed when Milei withdrew his support, calling the project a misunderstanding.

LIBRA’s price then plummeted by 96% in a single day. On-chain analysis revealed that eight developer wallets withdrew $99 million in liquidity, while twelve insider wallets used bots to buy immediately after Milei’s tweet before selling at the peak.

The impact on Solana was significant:

• SOL lost 20% in a week, dropping from $205 to $161.
• Trading volume on Solana DEXs fell by 50%, from $36 billion to $13 billion.
• Protocol revenues were hit hard: Jito -70%, Raydium -72%.

The LIBRA incident was the final straw for many investors, who expressed frustration with the state of the ecosystem (particularly on Solana). Worse, they criticized certain teams (Meteora and Jupiter) for actively coordinating these events solely to drain user liquidity and enrich insiders.

Additionally, $2.3 billion in SOL is set to unlock by April, adding further downward pressure on the price.

A $1.5 Billion Hack on Bybit

On February 21, the exchange Bybit suffered the largest hack in cryptocurrency history, with $1.5 billion stolen in ETH. The attack was attributed to the Lazarus Group, a North Korean hacker organization already involved in several high-profile exploits.

The hack was made possible by a vulnerability in a third-party wallet management platform (Safe, used by Bybit to store crypto assets), which allowed hackers to compromise certain wallets and siphon off 400,000 ETH undetected.

Bybit responded by attempting to contain the crisis:

• 246,994 ETH ($742 million) were repurchased to replenish reserves.
• Withdrawals remained open, preventing a total bank run.
• The hackers managed to launder approximately 100% of the stolen funds using DeFi protocols and mixing services.

Regulatory Developments in the United States

As the cryptocurrency market faces heightened volatility, the SEC signaled a shift in its approach in February 2025, marking a departure from its previous stance.

• February 27: The SEC dropped its lawsuit against Coinbase and ended its investigation into Robinhood without filing any charges.
• A Crypto Task Force was created, led by Hester Peirce, to establish clearer rules for the sector, moving away from the previous "regulation by enforcement" approach.
• February 5: The FDIC (Federal Deposit Insurance Corporation) released 175 documents on banks’ crypto-related activities and announced it would "actively reassess [its] oversight," potentially paving the way for deeper crypto integration into the banking system.

Beyond the U.S., other regulators also took crypto-friendly steps:

• Luxembourg adopted a law aligning its regulation with MiCA while integrating stricter anti-money laundering measures.
• Hong Kong confirmed that Bitcoin and Ether would be considered in its asset test for investment visas, allowing crypto holders to meet the HKD 30 million wealth requirement.

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Spot Bitcoin ETFs

February saw a massive institutional sell-off in spot Bitcoin ETFs, with net outflows totaling $3.55 billion. This trend intensified in the second half of the month, reflecting a shift toward risk reduction and a potential reallocation of capital to other asset classes.

Spot Bitcoin ETFs recorded consistent outflows throughout the month, but the trend accelerated after February 24, with a series of major sell-offs:

• February 24: -$539 million
• February 25: -$1.14 billion (largest single-day outflow of the month)
• February 26: -$754.6 million
• February 27: -$275.9 million

Within this context, FBTC (-$1.23 billion) was the most impacted, followed by IBIT (-$775.8 million) and GBTC (-$404.3 million). These outflows suggest a portfolio restructuring by institutional investors, likely driven by macroeconomic tensions and increased market volatility.

Despite a few positive days (February 4 with $340.7 million in inflows and February 28 with $93.7 million), these gains were insufficient to reverse the broader trend. The weakening demand for spot Bitcoin ETFs raises questions about the future positioning of institutional investors in the asset.

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Spot Ethereum ETFs

Unlike Bitcoin ETFs, spot Ethereum ETFs ended the month with a net positive inflow of $60 million, despite significant fluctuations throughout the month. Investor interest in Ethereum was particularly strong in early February, with notable inflows:

• February 4: +$307.8 million, led by ETHA (+$276.2 million).
• February 3: +$83.6 million, driven by FETH (+$49.7 million) and ETHE (+$15.9 million).

These inflows signaled a moderate yet stable appetite for Ethereum ETFs, contrasting with the capital flight from Bitcoin ETFs.

Starting February 24, Ethereum ETFs experienced outflows, though at a lower magnitude than Bitcoin:

• February 24: -$78 million, affecting ETHA and ETHE.
• February 26: -$50.1 million, with notable withdrawals from ETHA (-$69.8 million) and FETH (-$18.4 million).
• February 27-28: Combined outflows of -$113.1 million.

Despite the late-month decline, FETH managed to maintain a net positive balance of +$72.8 million. However, while Ethereum ETFs showed more resilience, the deterioration in flows toward the end of the month suggests that selling pressure could intensify in the coming weeks.

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Major Launches in February 2025

Uniswap’s Unichain Layer 2

On February 11, Uniswap Labs launched Unichain, an Ethereum Layer 2 blockchain developed with Optimism’s OP Stack. This network promises 95% lower fees compared to Ethereum and enhanced interoperability with other rollups. At launch, over 100 applications and protocols were ready to be deployed, including Uniswap v4, Circle, Coinbase, and Lido.

Unichain’s structure aims to capture a portion of the fees generated and redistribute them within the Uniswap ecosystem, a model that could strengthen UNI token value. However, the community has raised questions about the necessity of yet another Layer 2, given the many existing alternatives. Whether Uniswap can attract sufficient liquidity to its own network remains to be seen.

Story Protocol’s IP Tokenization

On February 13, Story Protocol officially launched Homer, its dedicated Layer 1 blockchain for intellectual property management. Its goal is to enable creators to register, monetize, and protect their works on-chain through licensing and smart contracts.

The project specifically targets digital creators and the AI sector, offering solutions for tracking and monetizing content usage. Its native token, $IP, saw strong demand upon market introduction, fueled by growing interest in blockchain-based intellectual property solutions. However, uncertainties remain regarding the legal recognition of these blockchain-registered assets in traditional legal systems.

→ For a deeper dive into Story Protocol, here’s our full presentation:

Berachain: A Liquidity-Based Layer 1

On February 6, Berachain launched its mainnet with a massive airdrop of 632 million BERA tokens. The uniqueness of Berachain lies in its Proof-of-Liquidity mechanism, a consensus model designed to align incentives between validators, DeFi projects, and liquidity providers, ensuring a more equitable reward distribution among these stakeholders.

In just a few weeks, Berachain’s TVL exceeded $3 billion, attracting investors seeking high yields. While the liquidity-based network security model has been well received, its long-term success will depend on its ability to retain users and prevent capital flight once rewards decrease.

→ For a deeper dive into Berachain, here’s our full presentation:

Kaito: A Token for Web3 Research

On February 20, Kaito, a project specializing in crypto trend analysis through AI, launched its KAITO token on Base (Coinbase). Distributed via an airdrop targeting influencers and active contributors, the token quickly reached $1 billion in trading volume within a week.

The enthusiasm surrounding AI-blockchain projects fueled interest in Kaito, but the distribution to key influencers sparked criticism, particularly over the rapid sell-off of airdropped tokens. In the medium term, the project will need to prove its utility within the Web3 ecosystem to maintain the momentum observed at launch.