Crypto Market Update: Mantra Token Collapse and Bearish Trends from Coinbase

This week saw a significant hit to crypto investor confidence due to the collapse of Mantra’s OM token, which dropped over 90%, and Coinbase’s bearish predictions for the crypto market’s future. Concerns about liquidity crises, a potential forthcoming crypto winter, and significant declines in the lending market compound these issues. While AI tokens and memecoins dominate current narratives, DeFi borrowing is notably rebounding.

Investor sentiment within the cryptocurrency market has recently taken a considerable downturn, highlighted by the dramatic collapse of Mantra’s OM token, which plummeted over 90% in a matter of hours on April 13. This event has drawn comparisons to previous catastrophic occurrences, such as the Terra-Luna collapse, further straining investor confidence. Meanwhile, Coinbase’s recent institutional report forecasts a continued bear market for cryptocurrencies, estimating a potential recovery in the third quarter of 2025.

The downfall of Mantra’s OM token has brought to light significant liquidity issues within the cryptocurrency industry, particularly on weekends when market participation tends to dwindle. The token’s price fell from approximately $6.30 to under $0.50, leading to allegations of market manipulation. Blockchain analysts attribute the crash to concentrated token ownership combined with erratic trading activity during low liquidity periods, as noted by Bitget’s CEO, Gracy Chen.

Coinbase’s market review indicates that the altcoin market capitalisation has decreased by 41% since its peak in December 2024, illustrating the deepening bear market’s impact. With total market capitalisation at approximately $976.9 billion, venture capital funding for crypto projects has reportedly plummeted by 50% to 60%. David Duong, Coinbase’s global head of research, suggests the current sentiment may herald the onset of a new crypto winter, exacerbated by global economic pressures.

In another notable incident, Manta Network co-founder Kenny Li revealed a sophisticated phishing attack targeting him via Zoom. An impersonator used manipulated video to appear credible, but Li remained cautious, identifying suspicious prompts which led him to exit the meeting. The perpetrator, presumably linked to the Lazarus Group, deleted their messages and blocked him after his request for verification.

The dynamic between artificial intelligence tokens and memecoins continues to shape investor narratives in early 2025. According to CoinGecko, AI tokens accounted for 35.7% of market interest while memecoins held 27.1%. Bobby Ong from CoinGecko expressed concern over the lack of new trends emerging, suggesting investors are fatigued by the repetition of previous cycles.

The crypto lending landscape remains markedly lower than its $64 billion peak in 2021, currently standing at $36.5 billion as revealed in a Galaxy Digital report. This downturn is largely attributed to significant bankruptcies in the CeFi lending sector, leading to an estimated 78% contraction in the entire lending market. In contrast, DeFi borrowing has surged by an impressive 959% from its lows, indicating a strong recovery in decentralized finance despite the challenges faced by traditional lenders.

Most of the top 100 cryptocurrencies saw positive trends this past week, with Raydium’s token rising over 26%. The evolving DeFi space continues to inspire interest, and further developments are anticipated in the coming weeks. Stay tuned for additional insights into this dynamic sector.