Investor sentiment in the cryptocurrency market took a significant hit this past week, following the dramatic collapse of Mantra’s OM token, which plummeted by over 90% within hours on Sunday, April 13, 2025. This sudden drop, from roughly $6.30 to below $0.50, has drawn comparisons to previous catastrophic events in the crypto space, such as the infamous Terra-Luna collapse. The incident has raised eyebrows and concerns about liquidity issues within the industry, as well as the overall health of the crypto market.
According to Cointelegraph, the OM token's crash has led to allegations of market manipulation among disillusioned investors. Gracy Chen, CEO of the cryptocurrency exchange Bitget, commented on the implications of the crash, stating, "The OM token crash exposed several critical issues that we are seeing not just in OM, but also as an industry." She elaborated that the concentration of wealth and opaque governance, combined with sudden inflows and outflows on exchanges, contributed to the drastic drop during periods of low liquidity.
Adding to the market's woes, Coinbase's recent report for institutional investors highlighted that cryptocurrencies may be entering a bear market that could last until a recovery is anticipated in the third quarter of 2025. The firm’s April 15 monthly outlook revealed that the altcoin market cap has shrunk by 41%, from its December 2024 highs of $1.6 trillion to approximately $950 billion by mid-April 2025. BTC Tools data indicated that the altcoin market cap reached a low of $906.9 billion on April 9, 2025.
Moreover, venture capital funding for crypto projects has reportedly decreased by 50% to 60% compared to the previous years, reflecting a broader downturn in investor confidence. David Duong, Coinbase's global head of research, warned that several converging signals might indicate the onset of a new 'crypto winter,' exacerbated by global tariffs and negative sentiment.
In a separate incident, Kenny Li, co-founder of Manta Network, revealed that he was targeted by a sophisticated phishing attack on Zoom on April 17, 2025. The attack involved live recordings of familiar individuals to lure him into downloading malware. Li noted, "I could see their legit faces. Everything looked very real. But I couldn’t hear them. It said my Zoom needs an update. But it asked me to download a script file. I immediately left." He later confirmed that the North Korean state-backed Lazarus Group was behind the attack, which has raised alarms about cybersecurity threats in the crypto space.
Despite these challenges, the cryptocurrency market is still witnessing some positive narratives. A report from CoinGecko indicated that artificial intelligence tokens and memecoins dominated investor interest in the first quarter of 2025, accounting for 62.8% of the market. AI tokens captured 35.7% of global investor interest, overtaking the 27.1% share of memecoins. Bobby Ong, co-founder and COO of CoinGecko, remarked, "Seems like we have yet to see another new narrative emerge and we are still following past quarters’ trends."
Meanwhile, the crypto lending market has experienced a significant downturn, reported to be down over 43% from its all-time high of $64.4 billion in 2021, now standing at $36.5 billion at the end of the fourth quarter of 2024. Zack Pokorny, a research associate at Galaxy Digital, attributed this decline to the fallout from major CeFi lenders, such as Genesis and Celsius Network, which filed for bankruptcy, leading to a drastic reduction in the lending market.
On the decentralized finance (DeFi) side, borrowing has made a remarkable recovery, surging 959% from bear market lows. Most of the 100 largest cryptocurrencies by market capitalization ended the week on a positive note, with the decentralized exchange Raydium’s (RAY) token rising over 26%, making it the week’s biggest gainer. The AB blockchain (AB) utility token also saw a significant increase of over 19% on the weekly chart.
In a related development, the U.S. State of Oregon has reignited concerns about regulatory pressures in the crypto space by reviving the SEC’s case against Coinbase (COIN) on April 18, 2025. This move has unsettled investors who had hoped for a resolution to regulatory scrutiny. Coinbase's Chief Legal Officer, Paul Grewal, criticized the Oregon Attorney General's actions, stating, "Today the Oregon Attorney General is resurrecting the dead by bringing a copycat case of SEC’s enforcement action against Coinbase." He expressed frustration over what he deemed an embarrassing waste of taxpayer dollars.
The SEC had previously dismissed its lawsuit against Coinbase on February 21, 2024, after alleging that the exchange operated as an unregistered securities exchange and sold unregistered securities in connection with its staking-as-a-service program. The revival of this case suggests ongoing legal uncertainty, which could extend until the mid-term elections.
On the trading front, XRP experienced a slight decline of 0.23% on April 18, 2025, closing at $2.0604. This followed a broader trend in the crypto market, which fell 0.29% to a total market cap of $2.63 trillion. The Nasdaq Composite Index also saw a drop of 2.62% in the week ending April 18. However, optimism surrounding potential negotiations between the U.S. and China regarding trade tensions may bolster demand for U.S. BTC-spot ETFs.
In fact, the U.S. BTC-spot ETF market reported net inflows of $13.7 million for the week ending April 18, snapping a two-week outflow streak. IBIT, a new player in the ETF market, has attracted $39,754 million in net inflows since its launch in January 2024, highlighting the growing interest in crypto ETFs. Bloomberg Intelligence Senior ETF Analyst Eric Balchunas noted that the stability of Bitcoin's price can be attributed to strong hands holding the asset, which may reduce volatility in the long term.
Despite the recent setbacks, the cryptocurrency market continues to evolve, with investors closely monitoring regulatory developments, market trends, and technological advancements. The road ahead remains uncertain, but the resilience of the crypto community may pave the way for future growth.
