The market isn’t crashing because of scandals and bad news

If hacks were real bear catalysts, why did the market shrug them off?

article-image

Artwork by Crystal Le

share


This is a segment from the Lightspeed newsletter. To read full editions, subscribe.


I don’t know, folks. Solana looks pretty cooked. The price has fallen below the 50 day and 200 day moving average, and is currently hovering around $130. It’s dropped about 35% since Valentine’s Day and is certainly not alone, with the whole market bleeding red over the same interim.

As such, we now have a lot of people asking: Is the bull run over? And if so, is the recent Bybit hack (or some other news, like the LIBRA memecoin fustercluck or the upcoming FTX unlocks) to blame? Conventional wisdom suggests that every cycle, a major hack or scandal shutters the market’s seemingly unstoppable momentum. But are these events really the cause, or just convenient scapegoats for something inevitable?

Bull runs seem to follow a fairly predictable rhythm, actually. Historically, BTC has peaked a little less than a year after reclaiming the previous cycle’s all-time high, often in December or January. It then moves briefly sideways, then downwards, and everything else follows the leader. This pattern held true in 2013, 2017 and 2021. In our current cycle, bitcoin reclaimed $69K in March 2024, and may have peaked 10 months later at $108K in January 2025.

Unsurprisingly though, people seem keen to frame the recent Bybit hack as the cause of a presumptive bearish spiral, rather than accepting that a pullback was simply due. Solana, which rode bitcoin’s momentum to nearly $300, has been caught in the same unwarranted blame game. 

We’ve seen this before. Everyone knows that Mt. Gox and its admission of insolvency killed the 2013 bull run. China banning Bitcoin halted the truly magnificent ICO run of 2017. Scandals from Luna and FTX were, of course, to blame for jettisoning the 2021 moonshot. Except no, actually. None of that is true.

Bitcoin topped above $1,000 in December 2013, roughly 9 months after reclaiming its previous $31 ATH. The Mt. Gox scandal didn’t break the dam until months later in February 2014. Likewise, China’s Bitcoin ban didn’t end the 2017 bull run. The ban happened when bitcoin was around $4K. The price dipped briefly before rocketing to $18K. When the market finally crashed in January 2018 (10 months after passing the previous cycle’s all-time high), people went on to say that it was due to China cracking down on bitcoin mining in the wake of the ban.

As for Luna and FTX, both devastated investor confidence, but neither caused the bear market. Crypto prices at large had already been in decline since December 2021, or about a year after surpassing the previous cycle’s all-time high. The terraUSD collapse happened in May 2022. FTX didn’t implode until November. Solana, which was admittedly affected due to its close association with the latter, was already deep into its downtrend before that event unfolded.

And that’s to say nothing of all the major hacks that did not conveniently align with market peaks. In 2016, the DAO hack and Bitfinex hack were both massive. If hacks were real bear catalysts, why did the market shrug them off?

Because hacks and scandals do not end bull runs. Markets crash due to overheating, leverage, and exhausted demand — all of which align with natural cycle peaks and troughs. Bad news certainly does increase the likelihood of local dips, but if the market isn’t in the right position relative to the current cycle, it isn’t going to crash on a macro scale. The Bybit hack certainly gave traders an excuse to panic. But if it hadn’t been Bybit, it would’ve been something else.

So what now? Well, no one’s yelled out “JENGA!” yet. Maybe another leg up. Whales seem to be accumulating, which remains bullish. But given the timing, it’s also possible that the clock was up in January and this was the top. If that’s true, it would mark blockchain’s weakest ever market cycle. Either way, history is clear: Hacks don’t end bull runs. Bull runs end, and traders look for something to blame.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (19).png

Research

Suilend has grown into the top money market and liquid staking provider on Sui. STEAMM, Suilend’s Superfluid AMM, presents a compelling avenue for growing market share within Sui’s DEX landscape and revenue generation for the protocol. Suilend’s multi-product suite position it well for owning market share across key verticals. While current metrics across the Sui ecosystem are likely inflated due to Sui Foundation incentive programs, SEND trades at amongst the lowest multiples in the lend/borrow sector, suggesting that a bull case for continued growth in the ecosystem may be mispriced.

article-image

Silk Road founder Ulbricht made a triumphant return to the Bitcoin Conference, 10 years on from sentencing

article-image

A Blockworks Research report looked at who could take up some of the marketshare in the launchpad space

article-image

Business-to-business stablecoin payments are on the rise, per a report from Artemis, Dragonfly and Castle Island

article-image

Crypto continues to do its thing: incentivizing behavior

article-image

Kraken will soon offer Backed ‘xStocks’ as Solana tokens

article-image

In a unanimous decision, the US Court of International Trade has ruled that Trump’s IEEPA tariffs are unlawful