Crypto Market Shake-Up How the yETH Incident & Bitcoin’s December Plunge Could Redefine Risk

Cryptocurrency markets shook awake in December – and it’s not in a pleasant manner. Towards the end of 2025, the top digital currencies are plummeting. BTC goes beneath US$87,000, and Ethereum (ETH) declines by 5%, while the entire range of altcoins suffers due to the sell-off trend.What led to this is the security incident at Yearn Finance and, in particular, its yETH liquidity pool that has shaken investors’ confidence. In this incident, it was possible for the attacker to print too much of yETH, withdraw around 1,000 ETH or around US$3 million in the pool, and use the mixers.Repercussions began rolling in shortly after. Risk-off behavior spread rapidly in the crypto markets. Even bitcoin, which had been considered such a safe asset class until now, suffered losses and pulled the entire ecosystem down in the process.Prima facie, losing several million dollars may look small compared to the multi-billion-dollar size of the crypto market. However, this is only the tip of the iceberg.Considering that “DeFi” platforms never cease to advertise “decentralised” finance, the problem is that incidents such as this one reduce confidence in this ecosystem. Even when it is only “one pool that is hacked, it rattles confidence in this DeFi ecosystem.The incident at yETH led to rapid withdrawals and panic selling on different pools. In the wake of investors seeking shelter, funds streamed out rapidly–not only in smaller currencies, but in leading currencies as well. Suddenly, the relationship between BTC and alts coincided: when one went down, the other followed suit.Incidents such as this are especially timely in that they have been happening when the institution has been re-emerging in the markets, and this can be seen in the use of ETFs or similar institutional channels. Systemic weaknesses, such as security risks in DeFi, for example, demonstrate that, just due to institutional investments, the markets are still at risk.In late November of 2025, Bitcoin had already experienced its worst month since mid-2022. It decreased by more than 21% in just November.

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