Retail Traders Stand Firm On Bitcoin Despite Record-Breaking Crypto Hack

synopsis

The $1.46 billion Bybit hack – the largest in crypto history – has done little to dent retail investors’ confidence in Bitcoin (BTC), according to a recent Stocktwits poll. 

While some traders remain wary of security vulnerabilities in crypto exchanges, most see Bitcoin’s long-term potential outweighing these risks.

The poll found that 42% of respondents still view Bitcoin’s benefits as greater than its risks, while another 33% believe security in the industry is improving and see the Bybit breach as a temporary setback. 

Meanwhile, 25% of traders expressed concerns that security risks are too high to justify investing in Bitcoin.

Bybit’s security breach, which resulted in a $1.46 billion exploit, triggered a wave of outflows totaling $5.5 billion as investors pulled funds from the exchange. 

Blockchain analysis firms Chainalysis, Elliptic, and Arkham have since traced the hack back to North Korea’s Lazarus Group, a claim later confirmed by the FBI. Bybit is now working with these firms to recover stolen assets and strengthen security measures.

The hack was among several factors contributing to Bitcoin’s decline below $80,000, alongside regulatory uncertainty and broader macroeconomic pressures. 

Adding to the turmoil, investors withdrew over $1 billion from U.S.-listed spot Bitcoin exchange-traded funds (ETFs) on Feb.25, in the largest single-day redemption since the funds debuted in January 2024. 

Despite the sell-off, Bitcoin has since paired its losses, trading below $85,000 but recovering from its multi-month low of $78,393, according to CoinGecko data.

The bounce coincided with a fresh batch of inflation data, which showed a slight easing of price pressures.

The Bureau of Economic Analysis reported that the personal consumption expenditures (PCE) Price Index rose 2.5% year-over-year in January, with the Core PCE Index – which excludes food and energy – rising 2.6%. 

The inflation report has bolstered hopes for interest rate cuts, with the CME FedWatch Tool showing traders now pricing in a 25-basis-point reduction as early as June 2025. 

On Stocktwits, retail sentiment around Bitcoin remained in the ‘bearish’ territory accompanied by ‘high’ levels of chatter. 

Some investors anticipate that Bitcoin’s price will dip further before moving higher.

Bitcoin’s recovery following the inflation report suggests that macroeconomic factors – like tariffs and geo-political tensions – remain a key driver of sentiment, even as security risks linger in the background.

Bitcoin is trading 23.1% below its late January all-time high of nearly $109,000. The cryptocurrency has fallen 18.4% over the past month but remains up 36.6% over the past year.

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