KEY TAKEAWAYS
- Bybit’s swift response to the Lazarus hack stabilized the crypto market, showcasing resilience against potential crises.
- The report highlights significant recovery in trading volumes and open interest for Bitcoin, Ethereum, and Solana on Bybit post-hack.
- Bybit’s liquidity conditions improved rapidly, with bid-ask spreads and market depth returning to pre-hack levels by May.
- Glassnode attributes Bybit’s success to effective operational strategies and transparent communication, preventing a market-wide collapse.
Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has been featured in a new research report by Glassnode, a leading onchain market intelligence provider. The report examines Bybit’s response to the February 2025 Lazarus hack, which was the largest crypto hack in history, amounting to $1.4 billion. The findings underscore Bybit’s swift recovery and its role in stabilizing the crypto market during a potential crisis.
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 the incident. It benchmarks the event against major disruptions in both digital asset and traditional financial markets. The report suggests that Bybit’s response marks a new era of digital asset market resilience, defying historical patterns of financial crises and crypto collapses.
Perpetual Open Interest and Volumes Recovery
The report highlights the performance of three key assets traded on Bybit: Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). Following the hack on February 22, ETH open interest on Bybit experienced a severe contraction due to widespread position unwinding and forced deleveraging. However, over the subsequent two months, open interest changes turned positive, with values returning to long-term averages and sometimes exceeding normal volatility thresholds.
BTC and SOL followed a similar recovery pattern. By May, BTC reached a new high in futures perpetual open interest at $8.5 billion, while SOL hit $1.2 billion. The report notes that Ethereum’s trade volume on Bybit surged to a new all-time high of $8.5 billion per day, despite being the primary asset targeted in the hack.
Narrowing Spreads: Liquidity Conditions Stabilized
Bybit’s deep liquidity faced immediate stress post-hack, with bid-ask spreads widening and market depth contracting sharply. This indicated a widespread participant withdrawal during the uncertainty. The exchange processed a record 350,000 withdrawals within 12 hours after the breach.
Since mid-April, both metrics have shown steady recovery, with bid-ask spreads returning to near pre-incident levels and market depth surpassing pre-hack values by May. This recovery signals restored market maker confidence and normal trading conditions.
Breaking the Crisis Pattern: Why the Bybit Hack Didn’t Trigger Industry Collapse
Instead of causing industry-wide panic, the hacking incident left only a temporary dent in Bybit’s liquidity. Glassnode developed a proprietary model to assess Bybit’s operational stability, focusing on the Internal Reshuffling Ratio and Whale Withdrawal Ratio. Both metrics showed post-hack spikes before returning to normal levels.
The report attributes the prevention of market spillover to Bybit’s “swift operational response, transparent communication, and strong internal controls,” which helped protect customer funds and maintain platform integrity. This incident demonstrates the industry’s evolving resilience, avoiding systemic collapse seen in previous crises like FTX and Terra.
For more details on the report, users can visit Glassnode Insights here.
Why This Matters: Impact, Industry Trends & Expert Insights
Bybit’s response to the Lazarus hack in February 2025, which was the largest crypto hack in history, highlights the exchange’s resilience and its role in stabilizing the crypto market during a potential crisis. The swift recovery of trading volumes and market conditions post-hack underscores Bybit’s effective crisis management.
Recent industry reports indicate a robust growth trajectory in the crypto market for 2025, driven by institutional interest and significant technological developments. This aligns with Bybit’s recovery and resilience, demonstrating the market’s ability to withstand and rebound from significant disruptions.
As per insights from Casey Taylor of Dragonfly, Bybit’s response was praised for its speed and transparency, setting a high benchmark for crisis management in the crypto industry. This supports the notion that effective crisis communication and management can mitigate deeper market disruptions and enhance overall stability.
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