Bitcoin Sinks to 86K After Yearn Finance Breach Sparks Market Turmoil

Bitcoin slid sharply during Monday’s Asian session, setting a turbulent tone for the start of the month as anxiety spread through the crypto market following a technical failure at the DeFi platform Yearn Finance.

By 01:07 ET (06:07 GMT), Bitcoin was trading at $86,075.6, down 5.3% on the day, after touching a 24-hour low of $85,638.3. The cryptocurrency is coming off a difficult November, during which it lost more than 16% of its value.

Market sentiment deteriorated after Yearn Finance revealed it was looking into an issue affecting its yETH pool. According to early assessments, a vulnerability allowed a bad actor to create an excessive amount of yETH tokens, leaving the pool flooded with tokens that had no legitimate backing.

The incident effectively enabled the production of unbacked assets, shaking confidence in the platform and prompting traders to pull out quickly.

The fallout spread fast across digital assets, sending Bitcoin and other major tokens into steep declines.

Focus shifts to Fed rate-cut expectations

Bitcoin’s drop came on the heels of a steep slide in November, extending a broader stretch of weakness even as sentiment toward U.S. monetary policy has been improving. Hopes for looser financial conditions had helped lift risk assets late last month, but that support faded in the wake of the Yearn Finance disruption.

Over the past week, investors have grown increasingly confident that the Federal Reserve will lower interest rates at its December 9-10 meeting. Softer U.S. economic data and clearer signs that inflation is cooling have pushed market pricing toward an 87% chance of a quarter-point cut, up from around 40% just a week earlier. While the prospect of easing initially provided some stability to crypto markets, the latest DeFi-related shock quickly overshadowed it.

Uncertainty on the policy front was further stirred by comments from U.S. President Donald Trump, who said over the weekend that he has already decided on his candidate for the next Federal Reserve Chair but has not yet announced the pick. His remarks fueled speculation around potential nominees, including former White House adviser Kevin Hassett, who is widely seen as favoring more accommodative policy.

Crypto market today

Ether slides 6%, XRP tumbles more than 7%

Altcoins were hit hard on Monday as renewed fear swept through the digital asset market.

Ethereum fell 5.7% to $2,826.92, while XRP, the third-largest token, dropped 7.3% to $2.03.

Losses extended across major layer-1 networks as well: Solana slid 7.5%, Cardano dropped 8%, and Polygon fell 6.5%.

Meme tokens were not spared either. Dogecoin declined 8%, and the $TRUMP token slipped 5% amid the broader pullback.