Crypto market sentiment took a significant hit this past week, following the dramatic collapse of Mantra's OM token

Investor sentiment in the cryptocurrency market took a significant hit this past week, following the dramatic collapse of Mantra's OM token

Crypto investor sentiment took a significant hit this past week, following the dramatic collapse of Mantra’s OM token. The token plummeted by over 90% within hours on Sunday, April 13.

This sudden drop—from roughly $6.30 to below $0.50—has drawn comparisons to previous catastrophic events in the crypto space, such as the infamous Terra-Luna collapse. The incident has also raised eyebrows and concerns about liquidity issues within the industry, as well as the overall health of the crypto market.

Following the OM token crash, which saw the vast majority of investor funds wiped out, disgruntled investors took to social media to level accusations of market manipulation.

Discussing the implications of the OM token crash, Gracy Chen, CEO of cryptocurrency exchange Bitget, said that the rapid price changes in OM during periods of low liquidity were a result of concentrated wealth and opaque governance, together with sudden large-scale token inflows and outflows on exchanges. These factors, in turn, led to a drastic price drop.

“The OM token crash has exposed several critical issues that we are seeing not just in OM, but also as an industry,” said Chen. “As the cryptocurrency market continues to evolve, it’s crucial for exchanges and investors to stay vigilant and adaptable to the changing landscape of the crypto ecosystem.”

Coinbase has said that cryptocurrencies may be entering a bear market that could last until a recovery is anticipated in the third quarter of 2025, according to the firm’s latest monthly report for institutional investors.

In its April 15 report, Coinbase’s researchers said that the altcoin market cap had shrunk by 41%, from its December 2024 highs of $1.6 trillion to approximately $950 billion by mid-April 2025. BTC Tools data indicated that the altcoin market cap reached a low of $906.9 billion on April 9, 2025.

Meanwhile, venture capital funding for crypto projects has reportedly decreased by 50% to 60% compared to previous years, reflecting a broader downturn in investor confidence.

Coinbase global head of research David Duong said that several converging signals might indicate the onset of a new 'crypto winter,' which could be exacerbated by global tariffs and negative sentiment.

In a separate incident, Manta Network co-founder Kenny Li said that he was targeted by a sophisticated phishing attack on Zoom by North Korean hackers. The attack involved live recordings of familiar individuals to lure him into downloading malware.

“I could see their legit faces. Everything looked very real. But I couldn’t hear them. It said my Zoom needs an update. But it asked me to download a script file. I immediately left,” said Li.

Later, he confirmed that the state-backed Lazarus Group was behind the attack. The incident has raised concerns about cybersecurity threats in the crypto space.

Despite these challenges, the cryptocurrency market is still witnessing some positive narratives. A report by CoinGecko has shown that artificial intelligence tokens and memecoins dominated investor interest in the first quarter of 2025, rendering the greatest returns to investors. Together, they accounted for 62.8% of the market.

CoinGecko data showed that AI tokens captured 35.7% of global investor interest, while memecoins held a 27.1% share.

“Despite the turbulent market conditions, we observed a strong emphasis on emerging technologies, with AI tokens displaying remarkable performance in Q1 2025,” said Bobby Ong, co-founder and COO of CoinGecko.

“We are also seeing a continuation of last year’s trends, such as the enduring popularity of memecoins. It seems like we have yet to see another new narrative emerge and we are still following past quarters’ trends.”

Meanwhile, the crypto lending market has experienced a significant downturn, reporting a decline of over 43% from its all-time high of $64.4 billion in 2021, now standing at $36.5 billion by the fourth quarter of 2024.

According to research associate at Galaxy Digital Zack Pokorny, this decrease can be attributed to the fallout from major CeFi lenders, such as Genesis and Celsius Network, which filed for bankruptcy, leading to a drastic reduction in the lending market.

On the decentralized finance (DeFi) side, borrowing has made a remarkable recovery, surging 959% from bear market lows. Most of the 100 largest cryptocurrencies by market capitalization ended the week on a positive note, with the decentralized exchange Raydium’s (RAY) token rising over 26%, making it the week’s biggest gainer.

The AB blockchain (AB) utility token also saw a significant increase of over 19% on the weekly chart. After hitting a low of $0.1648 on April 10,