After a strong start to the year, February proved to be one of the worst months for crypto assets since 2022. The Nasdaq Crypto IndexTM (NCITM) fell over 21%, as macroeconomic concerns collided with the industry’s largest exchange hack and a sentiment that the Trump administration wasn’t moving fast enough on its digital asset initiatives.

In his Notes from the CIO, Samir Kerbage covers whether last month’s poor performance is a sign that the current bull market is fading, a topic he also covered in a webinar with Nasdaq. To help investors better understand the new environment in Washington, DC, our Research Team put together a deck on the improving regulatory landscape, which can be found here,

As always, we are greatly appreciative of your trust in us and are here to answer any questions you may have.

-Your Partners at Hashdex

Market Review

After a positive month, February was marked by the largest hack in the history of the crypto market. However, price action was largely impacted by the trade war initiated by the Trump administration, which increased tariffs on imports from China, Mexico, and Canada. The escalation of trade tensions raised concerns about the impact on global economic growth, increasing risk aversion and putting pressure on more volatile assets, such as crypto assets. This adverse macro environment led to widespread declines until February 21, when the hack of the Bybit exchange further accelerated the market sell-off.

The Nasdaq Crypto Index™ (NCI™) posted a return of -21.58% for the period. Nearly half of this decline occurred after the announcement of tariffs on Mexico, Canada, and China, which led to a consistent market downturn until February 21. Following this period, the Bybit hack announcement intensified the sell-off, resulting in an additional -12% drop. The cyberattack, attributed to a North Korean group, led to a loss of $1.4 billion. The news caused panic in the market, triggering an immediate 5% drop in Bitcoin’s price. During the same period, the S&P 500 and Nasdaq 100 indices recorded negative returns of -1.30% and -2.69%, respectively, reflecting uncertainty regarding the implementation of new policies by the Trump administration.

Among the assets in the NCI™, declines were significant. The worst performer was LINK, which saw a -40.57% drop in February. Only one asset managed to stay in positive territory: LTC, which ended the month nearly flat, with a slight gain of 0.13%. BTC and ETH also experienced sharp declines of -17.28% and -33.30%, respectively. Sector indices suffered even more than the NCI™, a predictable trend during periods of high volatility due to the presence of lower-market-cap assets. The Digital Culture Index recorded the worst performance among its peers, dropping -39.55%, followed by the Decentralized Finance Index (DeFi) and the Smart Contract Platforms Index, which fell -35.94% and -34.36%, respectively. The Vinter Hashdex Risk Parity Momentum Index also followed the negative trend, recording a -28.78% loss.

February’s setback does not change our conviction that 2025 remains a promising year. The NCI™ has returned to negative territory for the year, with a cumulative loss of -13.89% in 2025 so far, but the overall outlook remains unchanged. The Bybit hack was a significant event, but the way the exchange handled the crisis also stood out, setting a new standard for crisis management in the sector. On the political front, the debate over crypto regulation in the U.S. remains ongoing. Despite short-term volatility, our long-term outlook remains positive.

Top Stories

Bybit suffered the largest crypto hack in history

A hacker stole $1.4 billion from Bybit, after accessing an Ethereum cold wallet and exploiting the exchange’s flawed security practices. Bybit claims to have filled the gap in its ETH reserves after the incident. Despite the events, market impact was relatively minor compared to past events, which suggests a growing market maturity when it comes to short-term shocks.

Citi, State Street to pursue digital asset custody

The banks are reportedly planning to launch digital asset custody businesses, another example of how the regulatory shift in the US has the potential to accelerate the adoption of digital assets by the traditional finance world.

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