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Highlights
- he Bybit hack caused an 8% ETH price drop, but long-term impacts hinge on hacker sell-offs and Bybit’s $1.5B bridged loan repayment.
- Bybit’s bridged loan creates repayment risks if Ethereum’s price rises, potentially triggering market volatility and short-term price swings.
- Ethereum’s 2025 price could stabilize between $4,000 to $5,000 if Bybit recovers funds and market confidence is restored.
An outflow of 401,346.76 ETH worth $1.5B was noted by on-chain sleuth ZachXBT, which later turned out to be one of the most expensive hacks to date. ByBit’s cold wallets were compromised on Friday, leading to an 8% crash in Ethereum (ETH) price. Let’s explore how this hack and ByBit’s 80% bridge loan could impact ETH price in the future. Also, uncover 2025 predictions, key support and resistance levels to watch as over the weekend as Ether reels from one of the deadliest hack ever.
Ethereum Price Crashes 8% After Bybit Hack: Here’s What Happened
- A masked UI exploit drained roughly 401,346 ETH ($1.5B) from Bybit’s cold wallets.
- North Korea’s Lazarus Group are the hackers behind ByBit’s hack, per on-chain investigator ZachXBT.
- As a result of this security incident, ETH’s price dropped 8% from $ 2,845 to $2,614 on Friday, February 21, 2025.
- ByBit CEO Ben Zhou confirmed that no customer funds had been lost and that the exchange had remained solvent. Over 350,000 withdrawal requests were processed despite the breach.
DeepSeek Predicts Bybit’s $1.5B Bridged Loan Impact on ETH Price
To cover the $1.5B loss from the hack, Bybit secured a bridged loan from multiple crypto exchanges and entities. A bridge loan is a short-term financing mechanism where the exchange borrows Ethereum, sells it immediately, and plans to repurchase it later at a lower price.
The longer ByBit waits, the more riskier the loan gets. Since this strategy hinges on ETH price stability, a sudden Ethereum rally could increase Bybit’s repayment costs and also negatively impact the counterpart handling costs as well.
Zaheer, a popular crypto analyst, noted that ByBit had taken a short position on Ethereum worth $1.5 billion (at the time) via a bridge loan. The term “bridged loan” here refers to a short-term financing mechanism where the exchange borrowed Ethereum to sell, expecting to buy it back cheaper later.
The CEO stated in the live stream that they had secured 80% of the hacked funds via a bridged loan to provide them “liquidity” to help “with the liquidity crunch” during this crucial period.
However, this strategy could backfire if their lending counterparty refuses to absorb potential losses. Zaheer adds,
“I’m gonna guess that their lending counterparty is not ok to take the price delta on this.”
Below are four hypothetical scenarios outlined by DeepSeek AI on how this loan could impact Ethereum price.
ETH Price Stays Flat or Declines
- Bridge Loan Impact: Bybit can repay the loan at a stable or lower cost, minimizing additional losses.
- ETH Price Impact: A flat or declining ETH price reduces pressure on Bybit, but uncertainty around the hack and potential hacker sell-offs could create bearish sentiment, keeping ETH prices in the
- $3,500 to $3,700 range.
A Moderately Rally in Ethereum
- Bridge Loan Impact: Repaying the loan becomes costlier, adding ~$100 million in losses. Bybit may need to dip deeper into reserves or seek additional financing.
- ETH Price Impact: A moderate rally could stem from positive market sentiment or speculation that Bybit’s recovery efforts will stabilize the market. However, Bybit’s need to buy ETH could drive prices up temporarily, followed by stabilization.
ETH Value Shoots Up Sharply
- Bridge Loan Impact: Bybit faces significant losses (~$2 billion to buy back 402,000 ETH), potentially straining reserves and risking insolvency.
- ETH Price Impact: A sharp rally might occur if speculators bid up ETH to pressure Bybit or if broader market optimism drives demand. However, this could also trigger panic selling by hackers or traders, leading to extreme volatility.
Market Participants Pressure Bybit by Bidding Up ETH
- Bridge Loan Impact: If traders intentionally drive ETH’s price higher, Bybit’s repayment costs soar, risking default or massive reserve depletion.
- ETH Price Impact: Such manipulation could push ETH to the $5,500 to $6,000 range temporarily, but subsequent sell-offs could crash prices back to
- $3,000 to $4,000, creating extreme volatility.
Ethereum Price Forecast: What’s Next for ETH?
The four-hour Ethereum price chart shows a pullback into the $2,765 to $2,522 values area formed between February 3 and 21. Considering how well the Bybit team handled the crash, the crypto markets are looking good and might rebound from here. If Bitcoin (BTC) revisits $100K and does not sell off, investors can expect a broader crypto market rally. In such a case, Ethereum price prediction notes the 2025 anchored VWAP at $3,017 as the next key resistance level.
Other notable hurdles if Ethereum price kickstarts an uptrend include $3,119, coinciding closely with Q4 anchored VWAP at $3,141, followed by $3,300, coinciding with Q4 November 2024 VWAP at $3,269.
As noted in a previous CoinGape article, a breakdown of the $2,621 support level could trigger an ETH crash.
The next key support levels are nearly 20% lower at $2,100 and $2,044. If hackers start offloading stolen ETH, the aforementioned scenario could unfold. In such a case, a sweep of $2,000 psychological level is likely and is the best place to buy Ethereum (ETH) at a discount.
Conclusion: Bybit Hack’s Long-Term Impact on ETH
The Bybit hack underscores crypto’s security risks but also highlights how exchanges mitigate crises. While the $1.5B bridged loan stabilizes Bybit, ETH price faces dual threats: hacker sell-offs and loan repayment risks. Despite the obvious short-term ETH volatility expectations, investors should focus on the long-term recovery, which hinges on a few key aspects, such as:
- Bybit’s ability to recover funds or absorb losses.
- Regulatory crackdowns on North Korean hackers.
- Bitcoin and broader crypto market sentiment.
As of this writing, the hackers have transferred 5,000 ETH to a mixer and are attempting to launder the funds, according to on-chain sleuth ZachXBT.
Frequently Asked Questions (FAQs)
1. How did the Bybit hack affect Ethereum price?
2. What is Bybit’s bridged loan, and how does it impact ETH?
3. Will Ethereum recover after the Bybit hack?
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