The cryptocurrency market has witnessed a brutal sell-off, erasing $325 billion in market capitalization since Friday. A major security breach at Bybit and concerns over liquidity have fueled the downturn, sending Bitcoin below $90,000. Meanwhile, Citadel Securities’ potential entry as a crypto liquidity provider and comments from former FTX CEO Sam Bankman-Fried add to the unfolding drama.

$325 Billion Wiped Out in Days

On Tuesday, financial newsletter The Kobeissi Letter reported that the crypto market lost a staggering $325 billion since Friday morning. In a particularly volatile hour at 10:00 GMT, $100 billion evaporated without any major news catalyst, highlighting the market’s fragility.

Bybit Hack Sparks Panic

A significant contributor to the sell-off was the revelation that Bybit, a leading crypto exchange, suffered a $1.4 billion hack on Friday. This breach ranks as the second-largest crypto hack in history, only behind PolyNetwork’s $611 million hack in 2021. The massive security lapse has further shaken investor confidence, triggering widespread panic selling.

Bitcoin Crashes Below $90,000

Adding to the turmoil, Bloomberg reported that Citadel Securities, a $65 billion market-making firm led by Ken Griffin, is exploring a role as a Bitcoin and crypto liquidity provider. However, instead of boosting market confidence, the news was interpreted as a “sell the news” event. Bitcoin dropped below the psychological $90,000 level, hitting a low of $86,888 on Tuesday.

Sam Bankman-Fried Resurfaces Amid Chaos

As the market tumbled, former FTX CEO Sam Bankman-Fried made a surprising statement, expressing “sympathy for government employees.” His remarks come at a time when Dogecoin (DOGE) and Elon Musk are reportedly preparing for mass layoffs in the U.S. federal government. While the relevance of his comments to the crypto downturn remains unclear, they add to the ongoing intrigue surrounding the disgraced entrepreneur.

The sharp drop in crypto prices aligns with a broader decline in risk appetite across financial markets. Historically, Bitcoin and other digital assets have thrived in high-liquidity environments. However, with tightening monetary conditions and a shift away from speculative assets, crypto markets are feeling the strain. This pattern mirrors previous market cycles, suggesting a prolonged period of volatility ahead.