Bitcoin finds its footing near $89,000 on February 26, 2025, after one of the most violent 48-hour stretches in recent memory. The cryptocurrency plunges from $96,000 to an intraday low of $86,000 — a $10,000 wipeout in under 24 hours — before recovering modestly as buyers step in at key support levels. The catalyst: North Korea’s Lazarus Group pulls off the largest crypto heist in history, stealing $1.48 billion from Bybit exchange and sending shockwaves through an already fragile market.
TL;DR
- Bitcoin drops from $96,000 to $86,000 intraday before recovering to approximately $89,000 — a 20% decline from its all-time high above $109,000
- Bybit suffers a $1.48 billion hack involving 403,996 ETH, later attributed to North Korean threat actors by the FBI
- The exchange receives $1.58 billion in Ethereum inflows within days as the industry rallies to support recovery efforts
- Tariff fears and recession concerns amplify the sell-off, with US consumer confidence posting its steepest decline since August 2021
- Binance CEO Richard Teng publicly states that Bitcoin will come back with strength, limiting further downside
The Bybit Hack That Shook Crypto
On February 21, Bybit — one of the world’s largest cryptocurrency exchanges — discovers that its Ethereum cold wallet has been drained through a sophisticated smart contract exploit. The attacker uses what Bybit CEO Ben Zhou describes as a “masked UI,” where a fraudulent interface deceives multi-sig signers into approving a malicious transaction that reroutes 403,996 ETH, along with 91,076 stETH, 8,000 mETH, and 15,000 cmETH to an unidentified address.
The total haul reaches approximately $1.48 billion, making it the largest crypto theft ever recorded. On February 26, security firms Sygnia and Verichains release preliminary reports tracing the breach to compromised Safe developer credentials. The FBI’s Internet Crime Complaint Center publicly attributes the theft to North Korean state-sponsored actors, specifically linking it to the Lazarus Group threat cluster.
Despite the staggering loss, Bybit keeps withdrawals operational — a move that helps prevent a full-blown panic. The exchange begins receiving massive Ethereum inflows almost immediately, with total inflows reaching $1.58 billion by February 26, including $802 million from institutional market makers and peer exchanges. Over 50.7% of the recovery inflows originate from a handful of large players, demonstrating unprecedented industry solidarity.
The Market Carnage
The hack hits an already weakening market. Bitcoin had been sliding from its post-inauguration peak above $109,000, and the Bybit news accelerates the decline dramatically. On February 25, BTC drops from $96,000 to $86,000 — one of the most violent single-day corrections in its history. Ethereum suffers even more severely, falling 22.9% over the week as the stolen ETH creates fears of dumping. Solana loses 40% week-over-week, while meme coins shed nearly 37%.
By February 26, the situation stabilizes somewhat. Bitcoin recovers to the $87,000–$89,000 range, with the CoinMarketCap daily snapshot showing BTC at $84,076. The broader crypto market capitalization loses hundreds of billions in a matter of days, with many altcoins giving back months of gains and resetting to levels not seen since April 2024.
Macro Headwinds Compound the Pain
The crypto sell-off does not happen in isolation. Macro factors pile on top of the hack-induced panic. President Trump reiterates his intention to impose 25% tariffs on imports from Canada and Mexico ahead of a Monday deadline, reigniting trade war fears. Safe-haven Treasury prices surge, pushing yields to two-month lows — a classic signal that investors seek safety over risk.
US consumer confidence plunges by the most since August 2021, with a Wells Fargo poll revealing that more than half of consumers delay major life decisions due to economic uncertainty. One in six postpone further education, one in eight delay retirement, and approximately one-third put off purchasing a home. The Bloomberg Magnificent 7 Index drops 3.4%, pushing the tech giants into correction territory and confirming that risk aversion extends well beyond crypto.
Industry Response and On-Chain Signals
Glassnode’s on-chain analysis reveals that the price drop pushes Bitcoin back into the realized supply “air gap” between $70,000 and $88,000 — a zone with low cost-basis density. With BTC falling below the short-term holder cost-basis, new demand investors face severe unrealized losses. Historically, this type of seller exhaustion has marked local bottoms, but the risk of extended downtrend remains if demand fails to materialize.
Binance CEO Richard Teng publicly expresses confidence in Bitcoin’s recovery, stating that the asset “will come back with strength” as the industry absorbs the shock. The hacker’s laundering process — tracked by TRM Labs — shows transfers through multiple intermediary wallets and conversion into different assets, but the pace of movement suggests challenges in liquidating such a massive position without further market disruption.
Why This Matters
The Bybit hack represents a defining stress test for the cryptocurrency ecosystem. The speed and scale of the industry response — with rival exchanges and market makers funneling billions in liquidity to backstop Bybit — demonstrates a level of institutional maturity that did not exist during previous crisis events like Mt. Gox or FTX. Bitcoin’s ability to hold the $86,000 level and recover to $89,000 despite the largest theft in crypto history suggests that the market’s structural foundations are stronger than critics assume. However, the combination of security vulnerabilities, North Korean state-sponsored cyber threats, and deteriorating macro conditions creates a challenging environment that tests investor conviction at every turn.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk, and past performance is not indicative of future results. Always conduct your own research before making any investment decisions.
1.48 billion gone because of a masked UI trick on a cold wallet. if this is how the biggest exchanges operate, we are nowhere near ready for institutional adoption
the safe developer credentials getting compromised is the scary part. how many other protocols use the same infra
the fact that the industry sent 1.58 billion in ETH to help bybit recover is honestly impressive. say what you want about crypto tribalism but when it counts people show up
lazarus group getting 403k ETH and the FBI just puts out a notice. love to see it. really effective work from the feds there
richard teng saying btc will come back with strength is literally what every exchange CEO says during a crash. show me one who said were doomed