Bybit helped contain crypto crisis after a hefty hack
The findings highlight Bybit's unprecedented recovery rate and how the exchange's zero-time response helped contain a potential crisis, absorbing market shock that could have sent the crypto industry into a downward spiral.
The comprehensive report, titled Digital Asset Market Resilience: A Deep Dive into the Bybit-Lazarus Hack, analyses 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 Stabilised
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, signalling 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.
To find out more about the report, users may visit Glassnode Insights.
Image Credit: ByBit & Glassnode
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Khaleej Times
8 hours ago
- Khaleej Times
Rethinking innovation to cross the ‘valley of death' in the tech sector
Innovation doesn't fail for lack of good ideas. It fails because good ideas are often stranded - too real for research, too early for procurement. In technology circles, we call this stretch the 'valley of death.' That's why specialist 'technology transfer' organizations exist - to bridge that gap. Their role is to take promising solutions and carry them from concept to deployment. Globally, the commitment to innovation is undeniable. In 2023, the top 2,000 corporate R&D investors spent €1.26 trillion (Dh5.4 trillion) - 85 percent of all business-funded research. Yet despite this enormous spend, returns are flattening. Analysts now speak of a 'diminishing return on R&D' as more organizations struggle to turn prototypes into products. One reason is that many firms still treat innovation as a procurement issue. They wait for technology to appear on the shelf and hope it fits the problem. But technology isn't furniture. It doesn't arrive pre-assembled and ready to use. A procurement mind-set may feel safe, but it often delivers average outcomes. That's fine - until the problem you're trying to solve involves emissions, patient safety, or food supply. At that point, average won't cut it. Technology transfer works when you work with industry partners to flip the equation. Instead of asking what's available, you ask: what's possible? Research is shaped around real problems. And success is measured by traction, not by novelty. Done well, this approach should follow a four-part model: 1. Anchor-client value. What's the upside of solving this problem - faster inspections, lower emissions, safer operations? If the impact isn't meaningful, question whether the project is necessary. 2. Global relevance. Can the solution scale beyond one client or country? If yes, it becomes not just a fix, but a potential export. 3. Three-legged execution. Teams blend commercial strategy, technical depth and stakeholder engagement. Dealmakers, analysts and engineers work as one. 4. Performance tracking. Both tangible and intangible outcomes – whether its cost savings, increased revenues, sustainability improvements, trust gains, safety and security enhancements - are measured and reported. This model is being applied in the UAE today. Take quantum sensing. What began as an exploration of emerging technology evolved into a deeply practical solution for the energy sector. Working closely with ADNOC, researchers at TII developed systems that dramatically improve the predictability of the lifespan of energy storage systems. In the quest for decarbonisation, this presents a paradigm shift in the electrification of assets that are run today on fossil fuels . Keeping product-market fit in our minds, even through the early stages of R&D has massive benefits. How will the end user use the technology and extract value from it? Consider drone-based emergency response. What started as a safety-driven request to improve response times in hazardous zones, evolved into a full-scale programme combining autonomy, communication infrastructure, and integration with live operations. These drones can now reach and assess dangerous environments before people ever need to, reducing exposure and speeding up critical decisions. And the technology is already finding broader applications - in industrial inspection, urban logistics and environmental monitoring. Dedicated air corridors, integrated safety protocols, and regulatory co-creation are all being fast-tracked to ensure the UAE is not just participating in advanced air mobility but setting the global pace, proving that regulation and innovation can travel together. These are real outcomes grounded in structured roadmaps, commercial logic and shared accountability. Each began not with a product pitch, but with a strategic question: what are the challenges of tomorrow that we need to be solving for today? The so-called valley of death isn't inevitable. It is one that can be overcome with the right coordination and partnerships. That's why institutions like ASPIRE matter. With a mandate to help convert strategic problems into co-developed solutions, linking researchers with engineers, regulators with innovators, and pilots with commercial off-take commitments based on assumed success; they shorten the distance between potential and progress. So, here's a suggestion for industry leaders: before launching your next RFP for a 'band aid' solution, ask a sharper question. What are you really trying to solve? What would solving it unlock - for your company, and for the wider market? The future isn't short on ideas. The real question is whether we have the courage - and the coordination - to carry them through.
Crypto Insight
9 hours ago
- Crypto Insight
Institutions dominating mainstream crypto narratives — fintech exec
Traditional financial institutions are increasingly shaping the narratives in the crypto sector, and are poised to benefit the most from the current trends, according to Arthur Azizov, founder of B2 Ventures, a private 'alliance' of crypto services and financial tech companies. Azizov told Cointelegraph that this market cycle has been dominated by institutional investors, investment vehicles like exchange-traded funds (ETFs), governments, and stablecoin issuers. He also said that big banks will accelerate this trend in the near future, once they have regulatory clarity to interact with crypto, saying it will only be a 'matter of months' between the time these banks receive regulatory clarity and the time it takes them to launch a stablecoin. Azizov added: 'Banks have a substantial user base. They already have their own clients. Those clients are loyal to those banks. And for them to implement crypto into their operations will be relatively easy.' These institutions have already changed the landscape. In the future, it's going to change even more, and I would say it's not good for small startups,' he continued. The increasing presence of institutional investors, banks, and companies in crypto has created tension between these traditional financial institutions and the cypherpunks that started the crypto movement, who advocate for the complete decentralization of the financial system The government is also driving the institutionalization of crypto Governments also have economic incentives to regulate crypto and bring it under the purview of the traditional financial system. 'The narrative is to regulate crypto, not only because it is mainstream, but in order to attract technology companies, attract young talent, and fintech startups, Azizov told Cointelegraph. This increased regulation means a greater focus on anti-money laundering (AML) regulations and know-your-customer (KYC) requirements, he added. AML and KYC are already required for retail crypto consumer applications throughout much of the Asia-Pacific (APAC) region and Europe, and Azizov said he expects this trend to also take shape in the US. The emphasis on consumer surveillance and officially registered accounts runs contrary to the value proposition of decentralized finance (DeFi), which promises permissionless access to a censorship-resistant financial system. Source:
Zawya
11 hours ago
- Zawya
Red Hat recognized as a leader for second consecutive year in 2025 Gartner Magic Quadrant
Red Hat is recognized in the Magic Quadrant. We believe this reinforces its role as a consistent, open hybrid cloud foundation for enterprise applications, AI workloads and developer innovation. Red Hat, the world's leading provider of open source solutions, has announced that it has been recognized by Gartner as a Leader in the 2025 Magic Quadrant for Cloud-Native Application Platforms for the second year in a row. Red Hat OpenShift, the industry's leading hybrid cloud application platform powered by Kubernetes, was recognized for the solution's Completeness of Vision and in Ability to Execute in the Magic Quadrant. In our opinion, this recognition underscores Red Hat OpenShift's comprehensive capabilities in helping organizations build, deploy and manage cloud-native applications across hybrid and multi-cloud environments, from the datacenter to the edge. The platform's ability to provide a consistent operational experience for both virtualized and containerized workloads, coupled with its robust developer tooling and integrated security features, empowers enterprises to accelerate innovation and drive digital transformation. We feel Red Hat OpenShift is recognized for its robust capabilities in containerization support, its extensive ecosystem and integration and its strong security and compliance features. Red Hat OpenShift continues to evolve, offering a flexible and powerful foundation for a wide range of workloads, including increasingly critical AI/ML initiatives. With its flexible multicloud strategy, Red Hat OpenShift demonstrates a clear understanding of the evolving cloud-native market, positioning it to effectively power the next generation of AI-driven workloads. The Gartner Magic Quadrant for Cloud-Native Application Platforms evaluated 12 vendor solutions and was based on specific criteria that analyzed the company's overall completeness of vision and ability to execute. According to Gartner, Leaders execute well against their current vision and are well positioned for tomorrow. View a complimentary copy of the Magic Quadrant report to learn more about Red Hat's strengths and cautions, among other provider offerings, here. Supporting Quotes Mike Barrett, vice president & general manager, Hybrid Cloud Platforms, Red Hat: 'We believe being recognized as a Leader for a second consecutive year in the Gartner Magic Quadrant for Cloud-Native Application Platforms is a testament to Red Hat OpenShift's sustained innovation and its critical role in enabling enterprises to navigate the complexities of modern application development. Our commitment to open source and hybrid cloud allows organizations to build, deploy and manage applications with unparalleled consistency and flexibility, wherever their data and operations reside.' Additional Resources Learn more about Red Hat OpenShift Check out the blog to learn more: Red Hat Named a Leader in 2025 Gartner® Magic Quadrant™ for Cloud-Native Application Platforms for the Second Consecutive Year Connect with Red Hat Learn more about Red Hat Get more news in the Red Hat newsroom Read the Red Hat blog Follow Red Hat on X Follow Red Hat on Instagram Watch Red Hat videos on YouTube Follow Red Hat on LinkedIn Gartner Disclaimer Gartner does not endorse any vendor, product or service depicted in our research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. GARTNER is a registered trademark and service mark of Gartner and Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved. About Red Hat, Inc. Red Hat is the open hybrid cloud technology leader, delivering a trusted, consistent and comprehensive foundation for transformative IT innovation and AI applications. Its portfolio of cloud, developer, AI, Linux, automation and application platform technologies enables any application, anywhere—from the datacenter to the edge. As the world's leading provider of enterprise open-source software solutions, Red Hat invests in open ecosystems and communities to solve tomorrow's IT challenges. Collaborating with partners and customers, Red Hat helps them build, connect, automate, secure and manage their IT environments, supported by consulting services and award-winning training and certification offerings. Forward-Looking Statements Except for the historical information and discussions contained herein, statements contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company's current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially. Any forward-looking statement in this press release speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements. ### Red Hat, the Red Hat logo and OpenShift are trademarks or registered trademarks of Red Hat, Inc. or its subsidiaries in the U.S. and other countries. Linux® is the registered trademark of Linus Torvalds in the U.S. and other countries. For further information, please contact: Orient Planet Group (OPG) Email: media@ Website:
