Bitcoin ETFs experienced significant outflow during February. The sentiment toward memecoin trading has deteriorated in recent weeks, following the "Argentina President" LIBRA scheme. Memecoin trading-focus DEXes and Layer-1s prices have reflected the sentiment shift. North Korea's Lazarus Group hacked Bybit for $1.4 billion in ETH on February 21, further triggering a 7.9% and 4.5% drop in Ethereum and Bitcoin respectively.

While regulatory developments in the crypto industry are in progress, macroeconomic factors such as higher than expected inflation data, lower than expected S&P Service PMI (potentially leads to slower economic growth), and Michigan 5-year inflation expectations climbed to the highest since 1995 have contributed to increased selling pressure, as investors adopt a more cautious approach. Immigration policies and tariff measures introduced by Donald Trump added concern to inflationary pressure toward the economy, which potentially unwind or halt the rate-cut cycle. Ratification of the Canada and Mexico tariffs by Trump on March 4 caused the market to extend slump.

The crypto market experienced natural correction after the substantial rally in Q4 2024, while multiple shocks from both macroeconomic and industry-specific factors further escalated the fluctuation. Despite these challenges, the mid-to-long-term outlook for the crypto industry remains constructive. The stablecoin supply is projected to expand further, injecting new liquidity into the crypto market and positioning the industry for potential upside once monetary conditions improve, significant crypto policy shifts, such as the Strategic Bitcoin Reserve, take shape or broader endorsement by the Trump administration toward crypto market. As stated in Investor Memorandum published early this year, the fund expected the market to experience increasing volatility in 2025. Please invest wisely and may you have a fruitful investment in 2025.