In this news:
Bybit has fallen victim today to one of the largest crypto hacks ever recorded, with hackers reportedly stealing over $1.4 billion worth of ETH from the exchange’s cold wallet. According to Bybit co-founder and CEO Ben Zhou, the attacker exploited a "masked" UI and URL, deceiving wallet signers into unknowingly approving a malicious transaction. This allowed them to alter the smart contract logic and gain control of the ETH cold wallet, draining its funds. While the incident remains under investigation, Zhou reassured users that other cold wallets are secure and withdrawals remain operational.
Market Reaction: Initial Speculation and Volatility
Following the announcement of the hack, the crypto market reacted with heightened volatility. Initially, speculation arose that Bybit would need to buy back ETH on a 1:1 basis to compensate affected users, potentially driving a significant price rally. This speculation briefly caused ETH to bounce back after an initial drop. CMC data shows ETH fell from $2,828 to $2,708 (a 4.2% decline) before rebounding 3.36% to $2,759 within 10 minutes.
However, Zhou later clarified in a live stream that Bybit had secured a bridge loan covering 80% of the lost ETH and had no immediate plans to buy large amounts of ETH in the spot market. This led to a swift shift in sentiment, turning the market bearish amid concerns over selling pressure from the hacker and broader risk aversion among investors.
Will the Hacker Sell?
The hacker now holds over 500,000 ETH—more than Ethereum co-founder Vitalik Buterin, who has 240,000 ETH. The stolen ETH has been distributed across 53 wallets, which are being actively monitored by blockchain security and smart contract auditing teams. Given the high-profile nature of the attack, selling such a large amount of ETH poses a challenge. The wallets are tracked in real time, making it difficult for the hacker to offload the funds without detection.
Additionally, the current market conditions are not favorable for liquidating such a large amount of ETH. If the hacker were to sell at scale, it would likely trigger a major market downturn—akin to Vitalik Buterin dumping his holdings at twice the magnitude. However, since the hacker acquired the ETH essentially at zero cost, achieving the highest selling price may not be a priority.
Broader Implications for ETH
The timing of the hack coincides with ETHDenver, one of the largest annual Ethereum ecosystem conferences where projects typically announce major updates and new releases. ETHDenver has historically been a bullish event for the market, with ecosystem projects unveiling their latest developments.
