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Cryptopolitan 2025-05-07 12:30:41

Bybit recovers BTC liquidity following February’s hack

Bybit recovered its Bitcoin (BTC) market depth to levels since before this February’s hack. The attack mostly affected Ethereum (ETH), but it led to an outflow of traders and liquidity. The Bybit exchange recovered its Bitcoin (BTC) market liquidity, gradually improving market depth since February’s hack. Data collected by Kaito Research reveals the market’s resilience and the current state of reserves. The market operator became a case study for crypto resilience in rebuilding the market depth to control slippage, while regaining the trust of traders. Bybit is still offering its special liquidity depth for retail orders, creating a deeper pool of matchable prices for small-scale traders. The feature may further rebuild the trust of retail traders. Bybit recovered most of its liquidity in 30 days Kaito noted that the first 30 days after the hack were critical for rebuilding liquidity and market depth. Bybit had its most critical liquidity problems in the first month after the hack. | Source: Kaito Research The BTC market also crashed, while Bybit negotiated loan terms to ensure all withdrawal claims were fulfilled. Kaito Research pointed out that the exchange handled over 350K withdrawal requests. As of May 7, Bybit carried $2.8B in daily trading volumes, with BTC still the dominant asset making up over 39% of trading activity. The BTC market has $2.8M market depth for 2% slippage based on Coingecko data . According to Kaito’s report, the daily average market depth is as high as $13M. Despite this, Bybit is considered one of the more liquid centralized markets. The exchange lost some of its market share following the exploit, and is currently trying to attract users with new trading products . The exchange then had to face the overall market slump linked to US tariffs negotiations and threats of a trade war. The hack happened at a time of generally worsening market sentiment. Almost all major exchanges lost some of their liquidity. Bybit’s organized approach to finding sources of liquidity led to the fastest recovery among other exchanges. Some exchanges, such as HTX, Bithumb, and MEXC, saw double-digit slide in liquidity in the month following the Bybit hack. Kaito pointed out that major events disrupt exchange liquidity. Even Binance lost up to 80% of its liquidity during the 2023 bear market, following the June 2023 SEC lawsuit. Some of the lost liquidity is yet to be recovered. This makes Bybit’s feat even more notable, following the largest exchange hack in the history of crypto. Altcoins recover liquidity at a slower pace Bybit is also a key market for altcoins and niche assets. Following the hack, liquidity regenerated more slowly. About a month after the hack, the exchange had recovered 80% of the usual market depth. Bybit focused on the top 30 altcoins, which are yet to return to pre-hack market depths. The altcoin market is also affected by bearish sentiment. The altcoin market recovery benefited from Official Trump ( TRUMP ), which was among the most liquid new tokens on the exchange. Established coins and tokens like UNI, ONDO, and LTC increased their liquidity by 50% soon after the exploit. Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now

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