Crypto Chaos: Bybit Suffers $1.5 Billion Hack, Bitcoin & Ethereum Prices Plunge

Bybit suffered a massive $1.5 billion hack, marking the largest crypto theft in history, with Ethereum being the primary target. The breach triggered a market-wide selloff, causing Bitcoin, Ethereum, and altcoins to drop sharply. Investigators linked the attack to North Korea’s Lazarus Group, while Bybit claims to have recovered 80% of the stolen funds.

CONTENTS:

• Crypto Markets Plunge After $1.5 Billion Bybit Hack, Marking Largest Crypto Theft in History
• Bybit Hack Traced to North Korean Lazarus Group, Exchange Recovers 80% of Stolen Funds
• Ethereum Drops 3.6% After Bybit Hack, Analysts Weigh Buying Opportunity

Crypto Chaos: Bybit Suffers $1.5 Billion Hack, Bitcoin & Ethereum Prices Plunge

Crypto Markets Plunge After $1.5 Billion Bybit Hack, Marking Largest Crypto Theft in History

Bitcoin and Ether prices dropped, with smaller cryptocurrencies seeing even steeper declines, following a massive $1.5 billion hack of the Bybit exchange. Analysts consider this the largest crypto theft in history.

Bitcoin, which had gained as much as 1.4% earlier in the day, reversed course to fall 2.1%, trading around $96,057 as of 2:32 p.m. Friday in New York. Ether, the primary token stolen in the breach, plunged more than 7% from its daily high to approximately $2,650. Meanwhile, altcoins like XRP, Solana, and Dogecoin suffered even sharper losses.

Alexis Sirkia, chairman of Yellow Network and co-founder of market maker GSR, noted that the Bybit breach triggered widespread panic selling and liquidity issues, highlighting the persistent risks associated with centralized exchanges (CEX).

Shares of Coinbase Global Inc. also tumbled more than 5%, despite an earlier rally when the company revealed that the U.S. Securities and Exchange Commission was set to drop its long-running case against it.

Over the past few weeks, Bitcoin and other major tokens have been trading within a narrow range, with implied volatility for short-term Bitcoin options contracts hitting its lowest level since June. A previous dip in early February had already caused a wave of liquidations, with Ether briefly losing as much as 26% on February 2.

Bybit CEO Ben Zhou confirmed that a hacker had taken control of one of the exchange’s offline Ethereum wallets. The full impact of the attack is still uncertain, but a significant portion of the stolen funds is already being sold, according to blockchain research firm Arkham Intelligence.

Elliptic, another blockchain analytics company, identified this as the largest crypto theft to date, surpassing the $611 million stolen from Poly Network in 2021.

Bybit Hack Traced to North Korean Lazarus Group, Exchange Recovers 80% of Stolen Funds

Blockchain investigator ZachXBT has traced the recent $1.44 billion hack of crypto exchange Bybit to the North Korean-linked Lazarus Group. This group has been implicated in several high-profile cryptocurrency thefts in recent years.

Bybit CEO Ben Zhou reassured users that the exchange has secured nearly 80% of the stolen funds through bridge loans and encouraged calm. He also confirmed that all withdrawal requests, including those under review, would be honored.

Arkham Intelligence, in a post on X, shared that ZachXBT provided “definitive proof” linking the Bybit exploit to Lazarus, including a detailed analysis of test transactions, connected wallets, forensic graphs, and timing analysis. Additionally, ZachXBT found links between this attack and the January hack of the Phemex exchange, where $30 million was stolen.

In response to the attack, Bybit has reported the incident to authorities and is working with on-chain tracking providers to monitor the hacker-controlled wallets and limit their ability to spend the stolen assets.

This breach is among the largest in crypto history and adds to a growing list of cyberattacks attributed to Lazarus. The group has been behind several major exploits, including the $625 million Ronin Network (Axie Infinity) hack, the $100 million Atomic Wallet breach, the $54 million CoinEx hack, and the $60 million Alphapo attack.

Meanwhile, Arkham has offered a 50,000 ARKM ($32,000) bounty for information identifying the perpetrators.

Ethereum Drops 3.6% After Bybit Hack, Analysts Weigh Buying Opportunity

Ethereum (ETH) has dropped 3.6% in the past few hours following confirmation that Bybit, the world’s second-largest exchange by spot trading volume, was hacked.

Blockchain investigator ZachXBT first flagged the suspicious outflows from a known Bybit cold wallet through his Telegram channel. Shortly after, Bybit CEO Ben Zhou confirmed that the hackers had compromised one of the exchange’s Ethereum cold wallets, stealing 401,346 ETH—valued at approximately $1.1 billion.

Zhou reassured users that no other wallets were affected and that the exchange has the resources to cover the loss, ensuring that account balances remain unaffected. However, research from BitMEX suggests that up to 75% of Bybit’s ETH deposits may have been impacted.

The hacker reportedly exploited a vulnerability by manipulating a transaction request sent to the signatory wallets, altering the smart contract’s logic to redirect funds to their address. Investigators note that the stolen assets are being dispersed across multiple wallets to make tracing more difficult.

The news of the hack erased Ethereum’s earlier 3.3% daily gain and cut into its 5% weekly rise. Bybit’s ETH trading volume accounts for about 5% of total market activity, but the incident does not affect Ethereum’s blockchain or long-term fundamentals.

Technical analysis suggests that while ETH’s sharp drop has confirmed a bearish double-top pattern on the hourly chart, the broader daily trend remains intact. ETH recently bounced back from a bear trap that formed in early February, and its price movement remains within a descending channel.

Momentum indicators point to a potential retest of the upper trendline in the coming days, though today’s dip could also push ETH closer to support levels. Some long-term investors may view this as a buying opportunity, considering Ethereum is only 11% above its pre-election price.

With the expected implementation of the Pectra upgrade and potential regulatory tailwinds from a pro-crypto U.S. government, ETH’s current dip may present an attractive entry point compared to its November-December levels.