Disclaimer: This post contains thoughts on crypto, a volatile and risky asset class. It is not investment advice, and you should do your own research. All information is for educational purposes only. Please don’t take risks with money you’re not willing to lose.

While a return to strength was rather hopeful after January’s antics, macro-driven chaos quickly turned CT into a hellscape. What initially felt to be a controlled correction morphed into a full-blown liquidity exodus as tariff speculation / fears of an escalating trade war sent equities and crypto into a synchronized sell-off. BTC chopped violently, 99% of alts were down only, and by the end of the month, we had suffered one of the worst weekly closes since 2022.

Macro Overhang

Tariffs are back, and the market hates it.

For reference, in late January, the Trump administration signaled a shift towards aggressive trade policies, particularly targeting Canada, Mexico, and China. BTC dropped a few percent on the first announcement, then bled relentlessly throughout the weekend as traders digested the potential impact. By February 2, this had escalated, culminating in a mass liquidation event that nuked BTC to $91k, ETH to $2k, and the rest of the pack even lower. The broader selloff ultimately erased nearly $2b in capital, making it one of the largest flushes since 2021.

The short-term reaction was expected: markets hate uncertainty. Tariffs raise costs for companies, disrupt supply chains, and threaten profit margins. But the long-term picture is equally as troubling. Persistent trade restrictions could fuel inflation, forcing businesses to relocate production or eat into already-thinning margins. This was the case with Bush-era steel tariffs, which ended up hurting more US industries than they protected. With global liquidity constrained and rates still high, the last thing we needed was another headwind (especially of this magnitude).

Equities got hammered too. The S&P dropped 2.7%, Nasdaq fell over 4%, and even rate-sensitive assets like gold saw high volatility. BTC eventually wicked as low as $78k, a level unseen since November, before a sharp bounce back to $84k.

Bybit Hack

To make matters worse, Bybit suffered the largest exchange hack in crypto history, losing over $1.5b in ETH to North Korea’s Lazarus Group. The exploit, which targeted their hot wallet infrastructure, was flagged on February 21, with ~400,000 ETH drained before security teams could react, eclipsing even the Ronin Bridge hack from 2022.

The market expectedly dumped on the news, though it coincided with our broader macro stress, making it tough to isolate. Still, the sheer scale of the breach spooked investors, reigniting concerns over CEX security. Bybit moved quickly, keeping withdrawals open and reassuring users that their reserves would cover the loss. Lazarus also wasted no time, laundering funds (primarily via Thorchain) and triggering blacklisting efforts across compliance firms. Our neighborhood sleuth ZachXBT once again came to the rescue.

“Not your keys, not your coins.”

Death of the Trenches

In early February, Argentinian President Javier Milei took a page out of Trump’s playbook, announcing the launch of LIBRA, the “official” memecoin of Argentina. Although I still sore seeing TRUMP in the top 100 by market capitalization, there was at least some legitimacy to it. LIBRA was quite the opposite—an engineered scam pinned on an unassuming influential figure.

Central to the grift is Kelsier Ventures, a Delaware-registered company led by Hayden Davis. Investigations have revealed that ‘they’ played a pivotal role in orchestrating the LIBRA token, holding a suspicious amount of its supply. Interestingly enough, Davis has also admitted to involvement in the launch of MELANIA, the First Lady’s very own crypto (sigh). The modus operandi in both instances involved creating tokens linked to prominent people, driving up their value through hype, and then dumping from side wallets. These actions not only result in financial harm to individual investors, but also erode trust in the broader ecosystem. It basically makes us out to look like bigger idiots than we actually are.

The beloved SOL trenches, once the epicenter of retail speculation, now represent a rigged game. It’s all too predictable: insiders launch, they extract, and retail gets left holding the bag.

HyperEVM

One of February’s few positives was the launch of HyperEVM, a major expansion aimed at bridging high-performance trading with on-chain programmability. Unlike traditional rollups, HyperEVM operates as part of the Hyperliquid L1, meaning transactions execute natively without relying on external validation layers. This allows HL to maintain its signature CEX-like speed and efficiency while introducing a more composable DeFi stack. To support such integrations, HyperEVM introduces wHYPE, a system contract enabling ERC-20 transfers and native spot trading between the L1 and its EVM layer. A bug bounty program is also in place to stress-test security before the full rollout.

This development comes as Hyperliquid continues to solidify its dominance in the perps decentralized exchange space. According to K33 Research, they now command 55% of all perpetual DEX trading volume, with open interest reaching 47% of OKX’s levels and 13% of Binance’s, a staggering feat for a protocol barely a year old.

Portfolio Update

There’s no beating around the bush… February sucked. In fact, some of my closest digital friends lost everything. Months to years of building a portfolio to get wiped from poor risk management, over-leveraging, or simply picking the wrong coins. Plenty more are down bad, on the verge of capitulation, and questioning if they are next. The timeline mirrors this sentiment (or a barren wasteland) as Michael Saylor seems to be the last bull standing. I suppose the orange guy too.

While a tough pill to swallow, it’s a fine reminder that volatility is as much our best friend as it is our worst enemy. And so are our emotions. Everyone loves to buy when price goes up, but not the other way around. Similarly, external interest parks itself alongside experts when things are outwardly positive. But true wealth creation is not made in these moments.

Before I get too prophetic, it’s worth noting that my positioning is somewhat contradictory to my preaching. Since last month’s recap, I’ve significantly decreased my SOL exposure by rotating profits into USDC and my bank account ahead of tax season. As such, it’s easy for me to have ‘made the right decisions’ and now act like I have some crystal ball into the future. I simply invest on long timeframes and don’t really care for the albeit horrendously painful pullbacks. BTC is the best performing asset by a WIDE margin since it’s inception and will remain that way for the foreseeable future. A temporary trade war may seem insignificant when an arms race for digital gold is in the cards. Survive and DCA.