Team CryptoInsightfull 
A day that was not overly positive for the market followed the unexpected excitement caused by President Donald Trump’s announcement regarding a strategic crypto reserve fund consisting of BTC, ETH, SOL, ADA, and XRP. On the morning of March 4, the crypto market continued to witness a widespread “red”, leading to skepticism and a wave of sell-offs across crypto markets, which can be attributed to a combination of factors based on current market dynamics and recent events.
How did the market dump?
According to CoinMarketCap, Bitcoin price surprisingly declined this morning (March 4, 2025) (U.S time). In 24 hours, the price of this asset dropped by 11%, at one point hitting 82,400 USD/BTC and wiping out more than 200 billion USD in market cap.
Source: Coinglass
Not just BTC, the entire market is awash in red, with Ethereum falling 15.6% over the past 24 hours, XRP dropping 18.7%, BNB declining 9%, Solana plunging 20%, Dogecoin decreasing 16.4%, and Cardano tumbling 26.3% during the same period.
A similar trend was observed in the stock market, as leading stocks experienced declines following Trump’s announcement that tariffs would take effect tomorrow.
Source: Cointelegraph
The reason behind the red stretching across the entire market
Bitcoin ETFs massive outflow
During the week of February 24 to 28, cryptocurrency ETFs experienced notable withdrawals, with Bitcoin funds seeing outflows of $2.61 billion and Ether funds losing $335.35 million. On February 26, a record-setting $1 billion was pulled from Bitcoin ETFs in a single day, reflecting cautious market sentiment.
Among the largest outflows, BlackRock’s IBIT led with $1.17 billion, followed by Fidelity’s FBTC with $568.65 million and Grayscale’s GBTC with $188.84 million. Other funds also saw significant withdrawals, including Grayscale’s BTC ($147.93 million), Valkyrie’s BRRR ($112.84 million), and WisdomTree’s BTCW ($95.10 million).
Despite the ongoing trend of withdrawals, Bitcoin ETFs saw a small inflow on the final day of the week, offering a slight shift after eight consecutive days of outflows.
Source: Cointelegraph
Bybit cyberattack
One of the reasons given is the Bybit cyberattack – which resulted in the acts of selling-off ETH. The latest cyberattack on the centralized crypto exchange Bybit, carried out by a well-known hacking group, led to the theft of more than $1.4 billion USD in ETH, marking it as the biggest cryptocurrency heist ever recorded.
On March 1, the cyber hackers transferred an additional 62,200 ETH, leaving them with only 156,500 Ethereum remaining from the initial haul, as reported by crypto analyst EmberCN. This latest movement pushes the total laundered amount to roughly 343,000 ETH, accounting for about 68.7% of the 499,000 ETH stolen in the February 21 attack. At this rate, the remaining of the funds was estimated to be laundered today.
This massive sell-off pressure, combined with the hackers potentially unloading their remaining 156,500 ETH, could have flooded the market, driving Ethereum’s price down. The Ethereum’s performance also influenced the broader altcoin market, leading to the synchronized declines in coins like XRP (-18.7%), Solana (-20%), Cardano (-26.3%).
Retaliation from China
According to The New York Times, the response from America’s partner, especially China, escalated a global dispute that has rattled governments and international trade. Mexico and Canada, the two other countries targeted by the Trump tariffs, had yet to respond.
Early Tuesday, China introduced tariffs on a wide range of U.S. food exports in response to the latest trade measures from the Trump administration. This move added to ongoing global trade tensions that have concerned many countries. Previously, Mr. Trump has placed nearly all goods from China under an additional 20 percent tariff. Earlier, on February 4, he introduced a 10 percent tariff, followed by another round of tariffs on Tuesday.
China’s finance ministry announced that it would apply a 15% tariff on imports of U.S. chicken, wheat, corn, and cotton. Additionally, a 10% tariff was placed on products such as sorghum, soybeans, pork, beef, seafood, fruits, vegetables, and dairy items. This raises concerns about an ongoing trade war, making investors increasingly cautious and more deliberate in their investment decisions.
