The company, however, said that all user funds were safe.

“Bitget had noticed unauthorised transfers from some of its wallets on Thursday, and it temporarily suspended customer withdrawals,” Gracy Chen, CEO of the ⁠Seychelles-based company, said in a statement posted on the popular micro-blogging platform X.

Chen further added that the loss was covered by Bitget’s own funds.

“Withdrawals remain temporarily suspended as a security precaution, not because of any shortfall in funds,” Chen told Reuters last Friday.

Bitget ‌has well over 120 million users, making the venture one of the world’s largest crypto exchanges.

When it comes to hackers targetting crypto websites and exchanges, Bitget is not alone. In 2025, Bybit had USD 1.5 billion stolen in a similar heist, which the FBI attributed to North Korean hackers.

As per the American and global law enforcement authorities, criminals, after stealing the crypto, often transfer the virtual currency across borders without using the mainstream financial system.

Last year, attackers stole USD 2.9 billion worth of crypto across nearly 150 different attacks, according to researchers at TRM Labs.

The incident involving Bybit still stands as the largest crypto theft so far.

However, crypto threats have been going on unabated since 2011. From 2011 to 2014, Mt Gox, an exchange in Tokyo, then the world’s biggest, witnessed virtual currency theft close to USD 500 million.

Mt. Gox, ⁠once known for handling 80% of the world’s bitcoin trade, filed for bankruptcy in early 2014 after the hack was revealed.

The mishap resulted in 24,000 customers losing access to their funds.

Tokyo hit the headline again in January 2018, as hackers stole cryptocurrency then worth around USD 530 million from exchange Coincheck. The thieves ⁠attacked one of Coincheck’s “hot wallets”—a digital folder stored online—to drain the funds, drawing attention to security at exchanges.

South Korea’s intelligence agency blamed the possible involvement of a North Korean hacking group behind the heist.

In August 2021, hackers stole around USD 610 million from Poly Network, a platform known for facilitating peer-to-peer token transactions. The hackers behind the heist later returned nearly all of the stolen funds.

The Poly Network hack also highlighted vulnerabilities in the decentralised finance (DeFi) sector, where users lend, borrow and save in digital tokens, bypassing the traditional gatekeepers of finance such as banks and exchanges.

In March 2022, cybercriminals stole cryptocurrency worth around USD 540 million from a blockchain project linked to the popular online game Axie Infinity.

Ronin, a network that allows the transfer of crypto coins across different blockchains, said that hackers stole some 173,600 Ether tokens and 25.5 million USD Coin tokens.

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Lloyds Banking Group, NatWest and Barclays carried out two remortgage transactions using tokenised sterling deposits, while a separate group of three banks including HSBC tested a person-to-person payment modelled on an online marketplace purchase, UK Finance said.

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The companies have entered into a new, five-year commercial agreement focused on expanding USDC access across emerging markets. Further, Binance has made a USD 100 million strategic equity investment in Circle.

Circle is working to create a foundation for a more open, global economy through programmable blockchain infrastructure, digital assets, and payment applications.

Circle’s platform includes the world’s largest stablecoin network anchored by USDC, the Circle Payments Network for global money movement, and Arc, an enterprise-grade blockchain designed to become the Economic OS for the internet.

“Enterprises, financial institutions, and developers use Circle to power trusted, internet-scale financial innovation,” the venture stated further.

Under the new agreement, Binance will accelerate the promotion, awareness, and integration of USDC on its platform, especially across emerging markets, and Circle will provide the infrastructure services that support holding and using USDC.

“Binance has built one of the largest and most dynamic platforms in the world for using digital currency, creating the internet’s largest financial super app, and becoming the most widely used wallet in the world for dollar stablecoins,” said Jeremy Allaire, co-founder, Chairman and CEO of Circle.

“Together, we see incredible opportunities to leverage USDC to expand dollar access, support savings and investment with innovative digital asset products, and reach people and businesses throughout global emerging markets,” he added further.

Binance’s equity investment in Circle was made through a private placement of Class A common stock at a purchase price reflecting a 5% discount to the market price of CRCL prior to closing.

Binance has agreed not to transfer the shares for a period of up to two years from the closing date, subject to customary exceptions.

“Circle has earned its place as one of the most credible issuers in the world, spanning USDC, Arc, and the infrastructure reshaping how value moves across borders. Our $100 million investment and five-year commitment represent long-duration conviction,” said Richard Teng, co-CEO of Binance.

“We are helping to build a more inclusive, transparent, and compliant digital economy. A stable, trusted digital dollar should not be a privilege—it should be available to anyone with a phone. That’s the future this partnership is designed to deliver,” Teng concluded.

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The group, which was first announced in October 2025 when just 10 banks were ⁠involved, also eyes expanding into stablecoins pegged to other G7 currencies, with the euro emerging as the top priority.

Stablecoins, which are used to move money around the world in the form of cryptocurrency, have seen a revival in interest, especially after the rebound in crypto prices in 2024.

United States President Donald Trump’s support for the sector has further sparked the idea of using blockchain in the mainstream financial system.

The financial group will compete with a separate consortium of 37 financial institutions, which formed ‌a ⁠company called Qivalis, with the latter planning to launch a euro-pegged stablecoin later this year.

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Another tailwind has been President Donald Trump’s recent appeal to the US Congress to pass a bill, called the “Clarity Act,” that would bring clearer definitions to the growing sector. After the speech got aired last week, Bitcoin, the world’s largest cryptocurrency, has gone up 16%.

It was last at USD 80,323.24 in Asian hours, having earlier touched USD 81,237.94, its highest level since mid-May. Bitcoin is up 28% so far in August, ⁠set for its biggest monthly gain since November 2024.

As per the analysts, cryptocurrencies got a big boost after the US Treasury’s decision to buy back more long-dated bonds to help cap the gains in the long-end yields, a move that has led to the US dollar bearing the brunt of investor anger.

In his latest media address, Treasury Secretary Scott Bessent has stressed that the Treasury will continue with its regularly scheduled debt auctions, including for long-dated bonds, despite the move to increase buyback sizes of 10- to 30-year securities.

He further added that the Treasury hasn’t purchased any bonds yet in the enlarged buybacks, which will start on September 10 for 10- and 20-year securities.

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Amid the uncertainties over the Clarity Act’s passing, United States President Donald Trump has asked the Congress to pass the “fair version” of the bill, which would bring clearer definitions to the growing cryptocurrency sector.

The Republican, who often calls himself the “crypto-friendly president,” made the comments in the presence of industry executives who had gathered for an event at the ‌White House with him.

Crypto ventures have been aggressively backing the “Clarity Act,” stating that the legislation would put them on solid legal ground. However, the bill has stalled in the Senate with little time left on the congressional calendar.

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Thune, a Republican, on Saturday (August 8), filed the bill, called the “Clarity Act,” following which a key procedural vote will be set up when the Senate returns from its August recess in mid-September, stated the US Senate Press Gallery website.

Amid opposition from the Democrats, Senate Republicans believe they may be able to put together the ⁠60 votes needed for the bill to pass. However, the bill still needs the support of at least eight Democrats and all of the Senate’s voting Republicans for it to pass.

The legislation, if passed, would give the crypto industry its first comprehensive federal rulebook, defining when digital tokens will become securities or commodities and which regulators will oversee them.

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That is the lowest reading since September 2024 and about 52% below the record high set in October 2025, when bitcoin traded at USD 126,000.

What makes this decline unusual is what did not cause it. No major exchange collapsed. No large stablecoin lost its peg. There was no fraud at the centre of it and no single villain to name.

The damage came instead from two forces that sit entirely outside the industry, a war in the Middle East that rewrote the inflation outlook, and a Federal Reserve that responded by taking rate cuts off the table.

The war that moved the oil price

The chain of events began in late February, when the United States and Israel carried out a joint military operation against Iran that killed Supreme Leader Ali Khamenei and several senior officials.

Iran retaliated with missile strikes on American bases across Jordan, the United Arab Emirates (UAE) and Qatar, and moved to disrupt shipping through the Strait of Hormuz.

The energy market did the rest. Brent crude surged around 64% from roughly USD 73.50 before the conflict to a peak near USD 120 in early March. A ceasefire in mid-April pulled prices back below USD 100, but the truce never fully held.

Through May and June, tanker seizures, naval build-ups and on-again, off-again negotiations kept a heavy risk premium in the price of oil, and kept markets guessing.

For crypto, the transmission was fast and mechanical. Institutional investors cut their most volatile positions first when geopolitical stress spikes, and digital assets sit at the top of that volatility ladder.

Bitcoin fell on the oil headlines in April, and again in early June when tensions flared once more. Altcoins fell harder, as they always do.

The quarter did not start badly. April was one of the strongest months of the year, and bitcoin recovered towards USD 80,000 in early May as ceasefire talks progressed.

The collapse came later. A single day in early June saw USD 1.8 billion of forced liquidations, the heaviest since February.

How a shipping lane became a monetary problem
The deeper damage was slower and more consequential. Sustained expensive energy feeds directly into headline inflation, and by March the tone at the Federal Reserve had turned.

Governor Christopher Waller, who had supported easing after weak February labour data, publicly reversed course and pointed to the prolonged Hormuz disruption as the reason. Rate cuts that markets had already priced in for 2026 began to be priced out.

Then the leadership changed. Kevin Warsh was confirmed as Fed chair by a 54 to 45 Senate vote, the narrowest in modern history, and brought a markedly different communication style.

His first meeting in June this year delivered a unanimous hold, a shortened statement stripped of its easing bias, and a dot plot showing nine of eighteen officials penned in at least one rate rise for 2026. The median year end rate expectation jumped to 3.8% from 3.4% in March.

On July 29, the committee held again at 3.50% to 3.75%, but the vote split 9:3, with the Cleveland, Minneapolis and Dallas presidents all dissenting in favour of an immediate quarter point rise. It was the sharpest split since 2016.

Warsh told reporters there is no soft inflation target on his watch. Futures markets now put the odds of a September rise above 60%.

This matters more to bitcoin than any protocol upgrade. In its current form bitcoin trades as a high beta risk asset.

When safe assets pay more, the cost of holding something that yields nothing goes up, and capital rotates out of the riskiest holdings first.

The ETF machine ran in reverse
The clearest evidence sits in fund flows. Spot bitcoin exchange traded funds were the marginal buyer that carried the market to its 2025 high. In the second quarter they became the marginal seller.

April was strong, with USD 2.02 billion in net inflows. May reversed to USD 2.41 billion of redemptions.

June was carnage, with about USD 4.5 billion pulled out according to SoSoValue, the worst month since the products launched in January 2024 and comfortably past the previous record of USD 3.56 billion set in February 2025.

That took net redemptions for the quarter to nearly USD 5 billion and pushed the year’s flows negative for the first time.

Between mid May and early June the funds recorded thirteen consecutive days of outflows, the longest such streak on record, draining roughly USD 4.4 billion on its own. Ether products lost a further USD 690 million over the quarter.

Total assets in the US spot bitcoin complex fell from roughly USD 109 billion on 10 May to about $77 billion a month later, tracking bitcoin’s 27% slide from a May peak of USD 81,443 to a low near USD 59,353. The funds’ bitcoin holdings are now around 7.2% below their October 2025 level.

A symbolic corporate sale added to the mood. On 1 June, Strategy, the listed company that has bought bitcoin consistently since 2020, disclosed that it had sold 32 coins for roughly USD 2.5 million to fund dividends on its preferred stock. In money terms it was nothing.

As a signal it was considerable, being the firm’s first disclosed net disposal since December 2022. A far larger sale followed, 3,588 coins for about USD 216 million between June 29 and July 5, at prices well below its average cost of about USD 75,476 a coin.

The decoupling nobody expected
The defining feature of the quarter was not the fall itself but the company crypto failed to keep. While bitcoin dropped 14.2% and ether 25.4%, the S&P 500 rose 14.9% and the Nasdaq 100 gained 27.2%, both lifted by a violent rotation into artificial intelligence equities. Gold also fell 14.2%.

For a decade the sector’s pitch has rested on two claims, that bitcoin is a hedge against monetary debasement and that it belongs in a diversified portfolio. A quarter in which equities rallied hard and crypto did not undermines both. Institutional money did not leave the risk trade. It simply found a better one.

Underneath the price action, liquidity drained away. Spot trading volume across the top ten centralised exchanges fell 27.9% to USD 1.95 trillion, with May setting a monthly low of USD 619 billion.

Average daily volume across the market dropped 20.9% to USD 93.1 billion. Most tellingly, stablecoin market capitalisation slipped 1.6% to USD 305.1 billion, the first quarterly decline since the third quarter of 2023 and the surest sign that capital is leaving the industry rather than rotating within it.

Not everything shrank. Prediction market notional volume grew 48.7% to USD 113.8 billion, with June setting an all time high on the back of the World Cup and other sporting events. Hyperliquid’s HYPE token broke into the top ten. Speculative appetite has not vanished, it has narrowed.

What the rest of 2026 looks like
July offered relief. Bitcoin rose roughly 9.8% to close the month near USD 63,000, ETF flows turned briefly positive, and the market steadied in the low sixties.

Three things will decide whether that holds.

The first is the Federal Reserve. The September meeting on the fifteenth and sixteenth is the next scheduled test, with Warsh’s Jackson Hole appearance in August ahead of it. A rate rise would likely push bitcoin towards the USD 50,000 to USD 55,000 zone that several banks now flag as downside risk.

The second is regulation. The CLARITY Act, the bill meant to give institutions the legal certainty to allocate to digital assets, is still fighting the Senate calendar.

Citigroup has already cut its twelve month bitcoin target from USD 112,000 to USD 82,000 and now forecasts zero net ETF inflows over the coming year, partly because it no longer expects the bill to arrive on time.

The third is the oil price, which remains hostage to whether the Iran ceasefire holds.

Analyst forecasts for year end run from a USD 53,000 floor to USD 150,000, a spread wide enough to be honest about how little anyone knows.

The realistic base case is a market that grinds sideways in the high fifties to mid sixties, with a possible deeper flush in the autumn before any recovery.

The industry spent 2025 arguing that institutional adoption had made crypto less volatile.

What 2026 has shown is that institutional adoption made crypto more sensitive to interest rates instead.

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During the April-to-June timeframe, investors rejected riskier assets amid concerns over the Fed’s policy approaches, volatile geopolitics, and persistent outflows from crypto investment products. The overall market weakness extended a retreat from record highs reached in October 2025.

This affected Coinbase’s numbers as well, as the exchange’s transaction revenue dropped 21% to USD 599 million during the quarter, from USD 764 million a year earlier.

However, the silver lining came from the “Everything Exchange,” Coinbase’s strategic initiative to expand from a pure cryptocurrency platform into a multi-asset financial hub.

Coinbase’s crypto trading volume market share stood at 10.3% in Q2 2026, a new all-time high, up from 9.1% in Q1 2026. This was Coinbase’s third consecutive quarter of market share gains. Crypto derivatives trading volume, on the other hand, proved resilient, nearly reaching Q1’s all-time high despite the market overall declining double digits quarter-over-quarter.

“Prediction markets contracts and revenue more than doubled, growing 106% quarter-over-quarter and crossing USD 100 million in annualized revenue. A new crypto binaries experience launched late in the quarter drove 3x daily traders and 4x daily revenue vs. May’s daily average,” Coinbase said.

Coinbase gained on the Stablecoin and payments front as well, with average USDC held in “Coinbase Products” reaching an all-time high of USD 20 billion in Q2 2026, more than 30% of all USDC in circulation as of quarter-end. Since 2025, Coinbase has captured approximately 50% of all USDC economics.

“Market stablecoin transaction volume has exceeded USD 37 trillion year-to-date, with 79% coming from USDC and Coinbase Partner Stablecoins, up from 51% in full-year 2024. Stablecoin transaction volume on Base Chain is up 7x year-over-year,” the venture told the investors and analysts.

Coinbase has also emerged as the leader in on-chain agentic finance (AiFi) by completing more than 99% of on-chain agentic commerce using USDC. Over 90% of agentic stablecoin transaction volume ran on Base, while more than 97% of onchain agentic transactions used Coinbase’s x402 protocol in Q2 2026.

Coinbase, off late, has been aggressively diversifying its revenue sources, resulting in more balanced revenue streams that, as per the company’s leadership, will make it a far more durable entity than previous down cycles.

“Net revenue excluding Bitcoin spot trading was 88% in Q2 2026, nearly double vs. Q2 2020, reflecting a business driven by a broader set of assets and use cases. Subscription and services revenue grew from USD 6 million in Q2 2020 to USD 555 million in Q2 2026. Subscription and Services revenue represented 48% of net revenue in Q2—up from 29% less than two years ago (Q4 2024)—reflecting how Coinbase has evolved beyond a trading platform into a diversified financial infrastructure company,” the venture stated further.

While Coinbase delivered its 14th consecutive quarter of positive adjusted EBITDA, it also announced the reduction of its FY26 adjusted expenses range, demonstrating continued expense management.

“Coinbase is growing AI usage faster than spend. As AI drives efficiency, pull requests per engineer are being processed more than 2.2 times year-over-year, increasing product velocity. Integration test coverage across core services has grown more than 2.5 times in the last six months,” the exchange remarked.

Questions still remain
Despite solid financials, Coinbase’s crypto trading revenue fell sharply as prices slid. Subscription and services, the segment the company and its analyst base have positioned as a low-beta hedge against exactly this kind of downturn, also came in below estimates.

The poor performance on the subscription and services front will put pressure on CEO Brian Armstrong and CFO Alesia Haas, as investors and analysts will be seeking answers on whether Coinbase’s diversification strategy is actually working or just growing slowly enough to matter.

Despite the exchange reporting total revenue of USD 1.22 billion for the Q2, the ratio ended up missing the USD 1.29 billion Wall Street consensus by USD 70 million, apart from falling short from the USD 1.5 billion recorded in the year-ago period, a 19% decline.

Transaction revenue, Coinbase’s largest single revenue line, came in at USD 599 million for Q2, below analyst expectations of USD 628 million. However, things here got affected due to Bitcoin dropping approximately 14% during the quarter while Ether declined around 25%, reducing both retail and institutional trading appetite. Industry-wide spot volumes also contracted for a third consecutive quarter.

Coinbase has been looking to the “Clarity Act,” introduced in May 2025, to provide long-sought regulatory clarity for digital-asset trading platforms. While the Senate Republicans released a revised version of the Act last week, negotiations are still ongoing. Armstrong, during the analysts’ call, expressed optimism about the legislation securing a full Senate floor vote.

“There is a lot of ⁠last-minute negotiations happening, which to me is a sign that everyone is invested in getting something over the line,” he concluded.

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As per the Japanese broadcaster NHK, crypto had previously been regulated mainly under Japan’s Payment Services Act, which treated it more as a payment method than an investment product.

With the latest rule change, cryptocurrency trading will become subject to regulations closer to those governing stocks and other securities, including curbs on trading based on insider information.

The rule change will also give regulators clearer grounds to pursue project founders, exchange employees and other people who trade before market-moving information becomes public.

“The law also raises the maximum punishment for operating an unregistered crypto trading business from three years in prison and a fine of about USD 20,000 to 10 years and roughly USD 67,000,” reported NHK.

“The new regulations don’t limit themselves to the fight against insider trading. The regulations will require crypto exchanges to comply with the general structure of Japan’s financial services industry,” said Anderson Mori & Tomotsune Law Firm in Japan.

Additionally, some crypto issuers will have to make certain disclosure requirements similar to those made by firms issuing securities. Crypto lenders too will be subjected to regulation, with firms offering wallets and other technologies to exchanges potentially facing new notification and compliance requirements.

The amendments have also introduced the legal basis for separate taxation of crypto gains at an effective rate of about 20%, together with a three-year loss carry-forward deduction. The Far East Asian country currently treats crypto profits as miscellaneous income, with tax rates reaching as high as 55%.

According to the analysis of Japan-based CoinPost, those tax provisions are expected to take effect in January 2028 because enforcement is scheduled to begin during the 2027 fiscal year.

The legislation also creates the foundation for issuing domestic spot cryptocurrency exchange-traded funds (ETFs). The Japan Exchange Group is reportedly considering the first local crypto ETF listings as early as 2027, with traditional financial institutions expected to serve as issuers.

Following the promulgation in parliament, the law is expected to take effect within one year, with cabinet ordinances and supervisory guidelines having the executive power to determine how the new rules will be implemented.

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