Ether plummeted as much as 9% Monday, crashing through the critical $3,600 support level after hackers drained over $100 million from Balancer, a major decentralized finance protocol built on Ethereum. The breach sparked fresh concerns about DeFi security just as crypto investors were already spooked by Federal Reserve hawkishness and Trump's trade war rhetoric, creating a perfect storm that's now testing whether digital assets can hold their recent gains.
Ethereum just got hit with a brutal one-two punch that sent its native token ether spiraling toward levels not seen since early fall. The cryptocurrency crashed as much as 9% Monday, breaking below the psychologically important $3,600 mark after hackers made off with potentially $100 million from Balancer, one of the biggest automated market makers in decentralized finance.
The breach couldn't have come at a worse time for crypto markets already on edge. Ether was trading around $3,600 as of Monday evening, down from highs of $4,885 reached just two months ago according to CoinMetrics data. That 25% drawdown puts the world's second-largest cryptocurrency firmly in correction territory.
Balancer, which allows users to trade tokens and provide liquidity without traditional intermediaries, confirmed the exploit Monday through its official channels. The protocol, which manages billions in total value locked, represents exactly the kind of DeFi innovation that's supposed to showcase Ethereum's potential beyond simple payments. Instead, it's become the latest cautionary tale about smart contract vulnerabilities.
The hack triggered immediate contagion across crypto-linked equities. Coinbase shares dropped nearly 4% in after-hours trading, while MicroStrategy, the business intelligence firm that's bet big on Bitcoin, slipped more than 1%. These moves suggest institutional investors are reassessing risk across the entire digital asset ecosystem.
But the Balancer exploit is just the latest straw breaking the camel's back. Crypto markets have been dealing with a cascade of bearish developments that started in mid-October when President Trump announced "massive" tariffs on China over rare earth export restrictions. That geopolitical tension sent investors fleeing from risk assets into traditional safe havens like gold.
"These events have put investors on uneasy footing as we roll into November," Juan Leon, senior investment strategist at Bitwise, told CNBC. "Macro volatility notwithstanding, this October's drawdown appears to have been a healthy, albeit sharp, de-leveraging event that flushed speculative excess from the market."
