Bybit’s $1.5 billion hack three ways to impact the staking industry

The $1.5 billion Bit Hack (the biggest in the history of the code) has put the industry at high alert. The attack, reportedly reportedly carried out by the North Korean Lazarus group, led to more than 401,000 ETH thefts, reinforcing the reality that exchanges are safe from sophisticated cyber threats and that any platform could be at risk.

Bybit responses are important. The positive point is that Bybit reestablished a 1:1 asset backing for clients and closed the “ether gap.” However, this temporary situation – when users are burdened with centralized exchange (CEX) security obstacles, participants are independent and can only maintain a minimum on trading exchanges.

Although the full fallout of this violation is still unfolding, it could serve as a catalyst for both retail and institutional staking participants to rethink their strategies. Here’s how a hack can rebuild staking:

Potential staking loss

This hack resulted in theft of approximately 400,000 ETH. That’s a loss of nearly $1 billion at an average price of $2,600 per ETH. Beyond the immediate financial hit, Ethereum’s staking yield means hovering around 4% per year – means a loss of around 16,000 ETH in annual staking rewards.

For perspective, if these stolen ETHs were spread across 100 stakers, each would have lost 160 ETHs in rewards. This is a major blow, especially for retail investors who may lack the financial resilience to absorb such losses.

Decrease in staking share in central exchange

Bibit hacks could be a turning point in the crypto industry, highlighting the risks of staking on centralized platforms. This trend is already seen in recent data. Over the past six months, the amount of ETH bets for intensive exchange has decreased from 8,597,984 ETH in September 2024 to 8,024,288 ETH in February 2025, indicating a 6.67% decline. This change comes amid growing concerns about the security and transparency of centralized platforms.

Furthermore, following the hacks from February 20th to February 23rd, CEXS’ ETH-dyed ETH decreased by 0.56%, while on-chain staking (excluding CEXS) increased by 0.31%. This suggests a change in the staking landscape, which will cause users to move their assets more and more from central exchange to safer, non-obligatory staking solutions or hardware wallets.

This change could have a long-term impact on the crypto market. The centralized exchange, which has long dominated the staking ecosystem, may have been waning in its impact. Moving stakers to decentralized alternatives could reduce the role of CEXS in governance, reward distribution and network upgrades. In the long run, this could reshape the staking market, with decentralized alternatives being central.

Institutional adoption at risk

Famous hacks like Bybit inevitably make institutional investors even more cautious about entering the crypto market. When auditors evaluate staking products, including ETH ETFs, a billion-dollar security breaches can encourage legal and compliance teams to hit the brakes on crypto allocations.

This stagnation could push back the timeline to achieve new price highs and delay wider adoption.

Given the growing threat of hacking, it is important that both retail and institutional investors embrace audited and certified self-reliance solutions. Protecting assets through non-radical wallets and decentralized platforms can significantly reduce the risk poses from centralized exchange. At the same time, exchanges should strive to rebuild trust by strengthening security measures, conducting regular audits, and providing insurance plans to users affected by the violation.

Additionally, the entire crypto community, including developers, exchanges, regulators and users, must come together to balance innovation and security. This collaboration is crucial to the long-term viability of the industry. By strengthening the overall security infrastructure, we can create an environment where both retail and institutional participants can be confidently involved in the crypto market.