The crypto market has suffered a staggering $325 billion wipeout since Friday, as selling pressure intensified. The downturn was exacerbated by a massive hack on the Bybit exchange and liquidity concerns, leading to sharp declines across major assets, including Bitcoin.

Bybit Hack Shakes Investor Confidence

One of the primary catalysts behind this market crash was the hacking of Bybit, which resulted in a $1.4 billion loss. This incident marks the second-largest crypto hack in history, surpassing the infamous $611 million PolyNetwork breach in 2021. The security breach has raised concerns about exchange vulnerabilities, further dampening investor sentiment.

Citadel Securities Eyes Crypto Liquidity Role

Adding to the turmoil, Bloomberg reported that Citadel Securities, a $65 billion market-making giant led by Ken Griffin, is considering entering the crypto space as a liquidity provider. Instead of boosting confidence, the news prompted a “sell the news” reaction, pushing Bitcoin below $90,000, with lows of $86,888 recorded on Tuesday.

Sam Bankman-Fried Resurfaces

Amid the market meltdown, former FTX CEO Sam Bankman-Fried made a rare public statement, expressing “sympathy for government employees.” His remarks come at a time when the broader financial landscape is undergoing significant shifts, with potential mass layoffs in the federal sector and continued regulatory scrutiny over crypto markets.

Liquidity Crunch and Crypto Market Volatility

The sharp drop in crypto prices highlights a broader decline in risk appetite among investors. As equity markets experience volatility, risk assets like Bitcoin are facing renewed pressure. This trend signals a liquidity crunch reminiscent of previous market cycles, raising concerns about sustained bearish momentum in the coming months.

While the market remains highly volatile, the latest downturn underscores the need for robust security measures and stable liquidity solutions to prevent further disruptions in the crypto space.