New report finds Bybit's rapid response to historic hack helped prevent systemic collapse in crypto markets
The comprehensive report, titled Digital Asset Market Resilience: A Deep Dive into the Bybit-Lazarus Hack, analyzes the timeline, trading activity, and critical market data from February 2025's unprecedented cyber attack—the largest crypto hack in history at a hefty $1.4 billion—while benchmarking it against major disruption events across both the digital asset and traditional financial markets. Defying historical patterns of financial crises and crypto collapses, the industry's response to the Bybit-Lazarus hack heralds a new era of digital asset market resilience.
Perpetual Open Interest and Volumes Recovery
The report examined the performance of three key assets traded on Bybit: BTC, ETH, and SOL. A day after the hack on February 22, ETH open interest on Bybit experienced one of its most severe contractions on record due to widespread position unwinding and forced deleveraging. However, over the following two months, open interest changes turned predominantly positive, with most values returning to long-term averages and at times exceeding normal volatility thresholds.
Both BTC and SOL followed a similar pattern to ETH's after the breach. According to the report, at the time of publication, all three had been restored to pre-hack levels, with BTC and SOL achieving significant milestones in May—BTC reached a new high in futures perpetual open interest at $8.5 billion, while SOL hit $1.2 billion.
'When examining perpetual trade volumes for the Ethereum asset, we observe stability in trading activity before and after the hack event, with volumes remaining largely unchanged. Additionally, following Ethereum's outperformance in recent weeks, trade volume on Bybit has surged, reaching a new all-time high of $8.5B/day, a remarkable milestone given that Ethereum was the primary asset targeted in the hack,' wrote the analysts in the report.
Narrowing Spreads: Liquidity Conditions Stabilized
Following the hack, Bybit's deep liquidity—long considered one of its key competitive advantages—was challenged. Its market liquidity experiencing immediate stress as bid-ask spreads widened drastically and market depth contracted sharply. The phenomenon indicated widespread participant withdrawal during the period of uncertainty. The exchange completed a record 350,000 withdrawals within 12 hours after the breach.
However, both metrics have shown steady recovery since mid-April, with bid-ask spreads returning to near pre-incident levels and market depth actually surpassing pre-hack values by May, signaling restored market maker confidence and normal trading conditions.
Breaking the Crisis Pattern: Why the Bybit Hack Didn't Trigger Industry Collapse
Instead of cascading into industry-wide panic and systemic pressure, the hacking incident left only a temporary dent in Bybit's liquidity before the exchange bounced back to pre-hack levels.
To assess Bybit's operational stability, Glassnode developed a proprietary model based on two key indicators: Internal Reshuffling Ratio and Whale Withdrawal Ratio. Both metrics showed a period of post-hack spikes before returning to normal levels.
The report attributed the prevention of market spillover to Bybit's "swift operational response, transparent communication, and strong internal controls," which enabled the exchange to protect customer funds, maintain platform integrity, and contain contagion risk.
The report adds to growing analytical literature on the historic hacking incident, whose aftermath demonstrated the industry's evolving resilience by avoiding systemic collapse seen in previous crises like FTX and Terra. Bybit not only contained potential market-wide damage but saw key assets reach new trading records, proving institutional-grade practices are now embedded in digital asset markets. This incident marks a pivotal shift in crypto's capacity to absorb major disruptions, potentially transforming investor confidence and accelerating industry maturation.
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