Following a significant security breach in February, the cryptocurrency exchange Bybit has seen a noticeable recovery in Bitcoin 
$77,196 liquidity. According to a report by market research firm Kaiko, the platform has returned to a state similar to its pre-incident status for Bitcoin trading.
The Bybit Exchange Hack Incident
On February 21, 2025, approximately 400,000 ETH were stolen, resulting in a loss of $1.5 billion. The attack exploited a multisig system vulnerability, allowing malicious transactions to be approved by cold wallet signers. The U.S. Federal Bureau of Investigation recently disclosed information indicating that the North Korea-backed Lazarus Group was responsible for the attack.
Although the crypto market was shaken by the hack, the long-term effects were not lasting. Bybit quickly covered the reserve deficit caused by the event by obtaining ETH loans from several cryptocurrency companies and exchanges, thereby restoring confidence among investors. Kaiko’s report indicates that the liquidity drop following the hack has recovered.
Institutional Trades and Market Developments
After the security breach, a notable decline in user confidence was reported, with over 350,000 withdrawal requests impacting the system. Transaction volumes decreased, and market depth, particularly for Bitcoin, had diminished. However, Bitcoin liquidity quickly began to recover, rising from a market depth of 0.1% immediately following the incident to approximately 8% in March.
Bybit regained approximately 7% of its market share, renewing investor trust. The platform’s liquidity was boosted by new security measures and a partnership with Zodia Custody. Rapid recovery also occurred despite trading policy changes in the U.S., contributing to global market uncertainties.
Moreover, the Institutional Price Improvement (RPI) processes that started on February 20 enabled more favorable pricing for individual customers. This initiative helped maintain stability amid volatile market conditions, bringing a slow but positive recovery in altcoin liquidity. The 30 largest altcoins successfully reached over 80% of their previous market depth.
In summary, post-hack investors still perceive Bybit as secure, and the exchange effectively managed the situation without suffering devastating setbacks.
The examined report reveals that the company rapidly approached previous liquidity levels, establishing a stable trading environment. Security enhancements implemented by the platform, institutional trading strategies, and international market developments are factors that could influence investor decision-making processes. Readers might find it beneficial to stay informed about security measures if similar incidents occur.
