Bitcoin slumps after Yearn Finance pool breach

The world’s largest cryptocurrency last traded 5.3% lower at $86,075.6

Bitcoin dropped sharply in Asian trading on Monday as the new month opened with renewed turbulence in the crypto market, after an incident at DeFi platform Yearn Finance triggered fresh concerns about liquidity.

The world’s largest cryptocurrency last traded 5.3% lower at $86,075.6 by 06:07 GMT.

Bitcoin dropped to as low as $85,638.3 in the last 24 hours. It slipped more than 16% in November.

The sell-off was sparked after Yearn Finance said it was investigating an “incident” in its yETH liquidity pool. Reports indicated that a flaw had allowed an attacker to mint an extremely large amount of yETH tokens, effectively flooding the pool with invalid supply.

In simple terms, the exploit enabled someone to create tokens out of thin air, undermining confidence in the pool’s backing assets and prompting traders to rush for the exits.

The disruption stoked immediate volatility in correlated assets, with Bitcoin and other cryptocurrencies sliding sharply.

The decline came just after Bitcoin closed out November with a sharp monthly drop. The pressure has persisted despite improving sentiment around monetary policy of countries such as the U.S., which had supported risk assets toward the end of last month.

Expectations of a December rate cut by the country’s central bank strengthened notably over the past week, driven by weaker growth indicators and signs that inflation pressures are moderating.

Traders now assign an 87% chance to a 25-basis-point cut at the December 9–10 policy meeting, compared with odds near 40% only a week ago. The prospect of easier monetary conditions had initially helped steady crypto markets, but the Yearn Finance incident overshadowed that optimism.