Crypto Market Plunges into December with Yearn Finance Exploit and Massive Liquidations
The cryptocurrency market has kicked off December with a brutal blow, barely shaking off a dismal November performance. Early Monday in Asia, Bitcoin, Ethereum, and other major digital assets experienced a sharp collective downturn. Compounding the market’s woes, the decentralized finance (DeFi) protocol Yearn Finance confirmed a multi-million dollar exploit, sending shockwaves of panic across the ecosystem.
According to CoinGecko data, Bitcoin (BTC) plummeted over 4% in early Asian trading today, December 1st, breaching the $87,000 threshold to trade at approximately $86,908 at the time of writing. Ethereum (ETH) suffered an even steeper decline, falling 5.5% in a single day, breaking through the significant $3,000 and $2,900 psychological barriers before settling around $2,825. Popular altcoins such as Solana (SOL), Dogecoin (DOGE), and Ripple (XRP) mirrored this weakness, each recording losses exceeding 6%.
Yearn Finance Exploit Rocks DeFi Sector
The sudden surge in selling pressure coincided with Yearn Finance’s official confirmation of an “incident” impacting its Yearn Ether (yETH) liquidity pool. While the protocol assured users that its V2 and V3 Vaults remained unaffected, the news was enough to trigger widespread concern.
We are investigating an incident involving the yETH LST stableswap pool.
Yearn Vaults (both V2 and V3) are not affected.
— yearn (@yearnfi) November 30, 2025
On-chain data reveals a sophisticated attack where an exploiter leveraged a contract vulnerability to infinitely mint yETH. This allowed them to drain the liquidity pool’s assets in a single transaction. Following the exploit, approximately 1,000 Ethereum, valued at around $3 million, was swiftly transferred to the notorious mixing service Tornado Cash, likely in an attempt to obscure the transaction trail.
The attack demonstrated a high level of expertise, involving the deployment of multiple new smart contracts. A concerning detail is that some of these contracts were programmed to “self-destruct” immediately after the operation, further complicating forensic analysis. While the precise total loss is still being calculated, the yETH pool’s Total Value Locked (TVL) stood at roughly $11 million prior to the incident.
Blockchain security firm PeckShield reported that the attacker’s address still holds approximately $6 million worth of various cryptocurrencies, indicating the significant scale of the exploit.
A Troubling Trend in Crypto Security
This incident marks the second major cybersecurity breach to rattle the market in quick succession, following the recent multi-million dollar hack of leading South Korean exchange Upbit. These successive attacks serve as a stark warning: despite the influx of institutional capital bolstering cryptocurrency market valuations, the underlying security infrastructure appears to be lagging, leaving platforms vulnerable to increasingly sophisticated threats.
Massive Liquidations Signal Investor Distress
Today’s sudden market downturn caught many traders off guard, particularly those who had placed bullish bets on a December rebound. Coinglass data indicates that over $500 million in leveraged positions were forcibly liquidated within the past 12 hours, with long positions accounting for a staggering $470 million of that total. This massive liquidation event underscores the fragility of market sentiment and the amplified risks associated with leveraged trading in volatile conditions.
Recap of a Dismal November
The preceding month of November proved to be profoundly disappointing for the crypto market. Bitcoin (BTC) registered a significant 17.5% monthly decline, marking its largest single-month drop since March of this year. Despite a late-month rebound from $80,000 to above $90,000, it failed to recover its earlier losses. Ethereum (ETH) fared even worse, plummeting a staggering 22% over the month, its weakest performance since February.
This widespread price weakness was largely attributed to a sharp decline in institutional demand. According to SoSoValue statistics, US-listed spot Bitcoin ETFs experienced substantial outflows in November, with a net withdrawal of $3.48 billion—the second-highest monthly outflow on record. Ethereum ETFs faced similar pressure, recording a net outflow of $1.42 billion, setting a new historical high for monthly capital flight.
Disclaimer: This article is for market information purposes only. All content and opinions are for reference only and do not constitute investment advice. They do not represent the views and positions of Blockcast. Investors should make their own decisions and transactions. The author and Blockcast will not bear any responsibility for direct or indirect losses incurred by investor transactions.
