Nearly four out of five crypto projects that suffer a major hack never fully regain stability, according to industry security experts. The damage, they argue, stems less from stolen funds and more from how projects respond in the critical hours after an exploit is discovered.
Mitchell Amador, chief executive of Web3 security platform Immunefi, said most protocols are unprepared for large-scale security incidents. “Most protocols are fundamentally unaware of the extent to which they are exposed to hacks, and are not operationally prepared for a major security incident,” he said.
The Dangerous Delay After a Breach
Amador warned that the first hours following a breach are often the most destructive. Teams without predefined incident plans frequently hesitate, debate internal responsibilities and underestimate the scope of the attack.
“Decision-making slows as teams scramble to understand what happened, leading to improvisation and delayed action,” he said. According to Amador, this window is when additional losses often occur.
Projects are often reluctant to pause smart contracts out of fear of reputational damage. However, Amador cautioned that silence and inaction usually amplify panic rather than contain it.
“Nearly 80% of projects that suffer a hack never fully recover,” he said. “The primary reason is not the initial loss of funds, but the breakdown of operations and trust during the response.”
Trust Collapse After Major Exploits
Alex Katz, CEO and co-founder of Web3 security firm Kerberus, said even technically resolved exploits can mark the beginning of a project’s decline. In most cases, user confidence never fully returns.
“There are always exceptions, but in most cases a major exploit is a death sentence,” Katz said. He explained that users withdraw funds, liquidity evaporates and reputational damage becomes permanent.
Trust, he added, has become the most fragile asset in the crypto ecosystem.
Human Error Overtakes Smart Contract Bugs
While smart contract vulnerabilities once dominated crypto headlines, recent losses increasingly stem from operational and human-layer failures. Katz said users approving malicious transactions or exposing private keys now account for most losses.
“Human error is clearly the weakest link in crypto security,” he said.
Earlier this month, one crypto user lost more than $282 million worth of Bitcoin and Litecoin in a social engineering attack. The victim was reportedly deceived by an attacker impersonating hardware wallet support and revealing their seed phrase.
Hacks Reach Multi-Year Highs
Crypto-related hacks surged in 2025, driving total losses to $3.4 billion, the highest level since 2022. Just three incidents accounted for 69% of losses by early December.
The $1.4 billion hack on Bybit alone contributed nearly half of the annual total. “Beyond Bybit, we’ve seen a rise in similar attacks that bypass smart contracts entirely,” Amador said.
Why Experts Still See Hope Ahead
Despite grim statistics, security experts remain cautiously optimistic. Amador believes smart contract security is improving rapidly due to stronger audits, better tooling and real-time monitoring.
“I think 2026 will be the strongest year yet for smart contract security,” he said. However, he stressed that response readiness remains the industry’s biggest unresolved weakness.
The White House is considering withdrawing its support for a major crypto market structure bill following Coinbase’s decision to step back from the legislation.
According to a source familiar with internal discussions, administration officials were caught off guard by the exchange’s move and view it as a serious breach of trust.
The draft legislation, known as the Digital Asset Market Clarity Act, was previously seen as a cornerstone of the administration’s crypto policy agenda.
Tensions Between Administration And Coinbase
The situation escalated after Coinbase publicly announced it could not support the current version of the bill.
Officials described the decision as a “unilateral” action that blindsided the White House and broader industry stakeholders.
One source characterized the move as a “rug pull,” arguing it undermined ongoing negotiations and momentum behind the legislation.
The same source suggested the administration could abandon the bill entirely unless Coinbase returns to talks and agrees to compromise.
“This is President Trump’s bill at the end of the day, not Brian Armstrong’s,” the source said, underscoring the growing rift.
Coinbase Raises DeFi And Stablecoin Concerns
Coinbase CEO Brian Armstrong defended the decision, arguing the draft bill would do more harm than good in its current form.
“We’d rather have no bill than a bad bill. Hopefully we can all get to a better draft,” Armstrong said earlier this week.
He pointed to provisions that he believes amount to a de facto ban on tokenized equities and impose sweeping restrictions on decentralized finance.
Armstrong also criticized expanded government access to financial records, warning it could erode user privacy protections.
Another key concern involves regulatory balance, with Armstrong arguing the proposal weakens the Commodity Futures Trading Commission while concentrating authority at the Securities and Exchange Commission.
The SEC has faced sustained criticism from the crypto industry for its enforcement-heavy approach in recent years.
Stablecoins At The Center Of The Dispute
Stablecoins have emerged as a major flashpoint in the debate.
Armstrong warned that the bill risks “killing rewards” on stablecoins, echoing industry fears that banking interests are shaping the legislation.
Banking groups have argued that stablecoin yields of around 5% could draw deposits away from traditional savings accounts.
Crypto advocates counter that these concerns are overstated and designed to limit competition rather than protect consumers.
Industry Reaction Remains Split
The broader crypto community remains divided over Coinbase’s stance.
Many users praised the exchange for pushing back against what they view as overreach by lawmakers and banks.
“Then the banks should stop trying to screw everyone over,” Coin Metrics cofounder Nic Carter wrote in support of Coinbase’s position.
Others criticized the company for exerting outsized influence over legislation that affects the entire industry.
“Coinbase is not crypto. Coinbase is one exchange in crypto,” one user commented, reflecting frustration with the power dynamics at play.
As negotiations stall, the future of the market structure bill remains uncertain, with political tensions now threatening to derail months of policy work.
Roblox has built a global platform with massive engagement and real payouts for creators, but scale alone doesn’t equal staying power. Unlike Pixar, which crafts lasting franchises with predictable value, Roblox hasn’t yet proven it can turn user-generated hits into durable IP. The real question is whether it’s heading toward long-term cultural relevance or following Zynga’s boom-and-bust path.
Roblox Isn’t Just a Game, It’s a Platform with Market Ambitions
Roblox isn’t building stories, it’s building infrastructure. The company sees itself more like Unity or YouTube, a platform where others create and monetize content at scale. It offers tools, systems, and revenue models for independent developers, but unlike Pixar or Nintendo, it doesn’t own the IP that drives its success.
That matters because long-term value in entertainment usually comes from owning and controlling franchises. Pixar crafts every frame, character, and narrative beat. Nintendo doesn’t just host Zelda or Mario, it licenses them across film, toys, and theme parks.
Even Epic Games, which owns Fortnite, has built recurring IP through controlled content and branded crossover events. That’s a critical difference from companies that build and license content end to end, like Pixar or Epic Games with Fortnite, and even gambling platforms.
Leading casino sites work with providers like Elk Studios, Play’n GO, and Nolimit City to offer exclusive, verified software with consistent gameplay standards. They own or license branded slots, enforce quality, and back it all with features like instant deposits and trusted payment rails. Roblox, by contrast, relies on a user-generated scale without central control.
Roblox’s Current Financial Reality
Roblox’s growth numbers are real. In early 2025, the company reported revenue of over $1 billion and bookings, essentially future sales, climbed even higher. Later reports showed daily active users rising above 110 million, up strongly year over year, and bookings up more than 50%.
But growth doesn’t equal profitability. Roblox has continued to report net losses, even as revenue rises. That means money is being plowed back into operations, scaling, and new initiatives rather than stacking up as profit.
This kind of pattern is common in tech stocks and platforms. However, it also means the company still has to prove it can convert massive usage into consistent returns for shareholders.
Creator Economy, A Strength and a Weakness
Here’s where Roblox’s model shines and strains at the same time. With millions of creators making experiences, the platform has huge variety and endless novelty. Successful creator titles can attract tens of millions of visits. It’s an ecosystem that rewards innovation and viral hits.
But there’s a flip side, no central quality control or long-term narrative investment. Pixar films stay relevant for years because they are crafted with intention, with tight creative oversight and a distribution strategy that spans the globe. Roblox’s content pipeline is hugely varied, but it lacks a consistent pipeline of owned stories, characters, and franchises.
Efforts to Bridge the Gap to Real IP Value
Roblox isn’t oblivious to this limitation. In 2025 it launched a licensing platform that makes it easier for media companies like Netflix and Lionsgate to put their characters and worlds on Roblox games.
That’s significant. Instead of purely user-driven experiences, Roblox is now building pathways for recognized IP to exist inside its ecosystem, giving creators legit branded “worlds” to work with. This could help the platform host true franchise value, even if it doesn’t originate it.
That’s a step closer to Pixar-style cultural relevance, but it’s still dependent on external franchises, not Roblox owning their own universe of stories.
So Is It More Zynga, Or More Pixar?
Let’s briefly recall why Zynga struggled. During the Facebook gaming era, Zynga dominated with smash hits like FarmVille, but it struggled to adapt when platforms shifted to mobile. Its user engagement dropped, and its games lacked deep, durable hooks that kept players coming back over the long term. As a result, revenue and stock value suffered.
Roblox doesn’t suffer from the same problem, at least not yet. Its engagement numbers have actually expanded, and the company raised its annual bookings forecast multiple times in 2025, driven by strong spending and viral games.
So Roblox isn’t on a Zynga-like decline. However, the type of value created is still very different from Pixar.
Pixar generates stories that become cultural touchstones, products that have licensing life across toys, apparel, spin-offs, and even theme parks. Roblox’s strength, a distributed creator economy, hasn’t yet proven it can produce that kind of long-tail, cross-medium revenue.
Bank of America CEO Brian Moynihan has warned that stablecoins could redirect trillions of dollars away from the US banking system, highlighting tensions between traditional banks and the digital asset sector.
Speaking during the bank’s Wednesday earnings call, Moynihan said up to $6 trillion in deposits, around 30% to 35% of all US commercial bank deposits, could shift to stablecoins under certain regulatory scenarios.
Moynihan noted that this estimate is based on Treasury Department studies and linked the potential outflow to ongoing debates over interest-bearing stablecoins.
Banks argue that yield-bearing stablecoins resemble bank deposits but lack the regulatory protections of traditional banking products, creating the risk of accelerated deposit outflows.
“Many stablecoin models resemble money market mutual funds rather than traditional deposits,” Moynihan said.
Reserves for these stablecoins are typically held in short-term instruments such as U.S. Treasurys, rather than being recycled into loans for households and businesses.
“If you take out deposits, they’re either not going to be able to loan or they’re going to have to get wholesale funding,” he added.
This alternative funding often comes at a higher cost for banks, potentially limiting lending capacity.
Lawmakers are currently debating legislation to limit passive yield on stablecoins while allowing activity-based rewards for staking, liquidity provision, or collateral posting.
The draft bill released by Senate Banking Committee Chair Tim Scott in early January drew more than 70 amendments ahead of a planned markup, reflecting intense lobbying by both banks and crypto firms.
Galaxy Research has raised concerns the bill could expand Treasury Department oversight of digital asset transactions.
Meanwhile, Coinbase CEO Brian Armstrong stated the exchange cannot support the bill as drafted, arguing that certain provisions would eliminate stablecoin rewards.
Scott later postponed the markup, saying negotiations are ongoing and all parties remain engaged in discussions to find common ground.
Bitcoin moved toward one-week highs at the start of Tuesday’s Wall Street session as markets reacted positively to lower-than-expected US inflation data.
The largest cryptocurrency gained around 1.5% as December Consumer Price Index figures came in largely in line with forecasts.
Headline CPI matched expectations at 2.7%, while core CPI printed at 2.6%, slightly below anticipated levels.
US equity markets responded immediately, with the S&P 500 pushing to fresh record highs.
Traders pointed to improving inflation conditions as supportive for risk assets, including cryptocurrencies.
Market observers also highlighted the growing tension between President Donald Trump and Federal Reserve Chair Jerome Powell.
The Federal Reserve is widely expected to keep interest rates unchanged at its January meeting.
Trump has continued to publicly pressure the Fed to cut rates further, arguing that lower borrowing costs would boost economic growth.
Following the CPI release, Trump renewed calls for rate cuts, a move that could increase liquidity flowing into crypto markets.
He also suggested US trade tariffs have helped cool inflation, an issue currently facing legal scrutiny.
Traders Warn Of Heavy Resistance Ahead
As Bitcoin approached the $93,000 level, analysts cautioned that significant buying pressure would be required to break higher.
Several traders identified a dense resistance zone between roughly $92,600 and $94,000.
Volume-weighted average price levels were highlighted as forming a major technical barrier.
“The chop from the past few days has made it so there’s some decent liquidity built up on both sides,” said trader Daan Crypto Trades.
He noted that downside liquidity remains concentrated between $89,800 and $88,700.
Data showed nearly $170 million in crypto liquidations over a 24-hour period, reflecting heightened volatility.
Despite the range-bound conditions, traders broadly agreed that the current consolidation phase may not last much longer.
“No doubt that this current ~$90K-$92K range won’t last much longer,” Daan Crypto Trades added.
Bitcoin briefly climbed above $92,000 following reports of a Department of Justice investigation involving Federal Reserve Chair Jerome Powell.
Despite the initial rally, traders remained cautious as broader market indicators pointed to weak demand and persistent selling pressure.
The move failed to change the prevailing tone, with exchange-traded fund outflows continuing to weigh on sentiment.
Store-Of-Value Narrative Faces Scrutiny
Bitcoin remains down roughly 23% since October 2025, even as gold and silver pushed to new all-time highs in 2026.
This divergence has raised questions about whether Bitcoin’s digital store-of-value narrative is losing traction among investors.
Some traders argue that even a further 14% rally toward $105,000 may not be enough to trigger broad bullish positioning.
Expectations for additional U.S. economic stimulus have also faded, reducing support for risk assets.
Goldman Sachs recently said it no longer expects an interest rate cut in March, citing persistent inflation and resilient labor markets.
Powell Investigation Adds Political Dimension
Powell’s term as Federal Reserve chair is set to end in April, opening the door for a potential successor with a looser policy stance.
The investigation into the Fed’s building renovation project has raised questions about central bank independence.
Some analysts believe political pressure on the Fed could, in theory, favor alternative scarce assets such as Bitcoin.
Powell said the scrutiny should be viewed within the broader context of threats directed at the central bank.
So far, markets have shown little evidence that this dynamic is meaningfully altering Bitcoin’s risk profile.
ETF Outflows And Derivatives Signal Caution
Bitcoin failed to hold above $94,000 over the past month despite renewed corporate buying.
Strategy added $1.25 billion worth of Bitcoin, marking its largest purchase since July 2025.
Even so, derivatives data showed limited appetite for bullish leveraged positions.
The annualized premium on Bitcoin futures hovered around 5%, a level typically associated with neutral to bearish sentiment.
By contrast, sustained bull markets usually see futures trading at a premium of 10% or more.
Spot Bitcoin ETFs recorded $1.38 billion in net outflows over four consecutive trading days.
Dollar Strength Limits Upside
Despite concerns about fiscal deficits, there is little evidence of a confidence crisis in the U.S. dollar.
The U.S. Dollar Strength Index rebounded to 99 after hitting a low of 96.7 in late November 2025.
Yields on five-year U.S. Treasurys have remained below 3.8%, signaling steady demand for government debt.
If markets were anticipating an imminent downturn, the dollar would likely have weakened more sharply.
For now, muted ETF flows and limited leverage demand suggest low odds of a surprise Bitcoin rally in the near term.
Ethereum’s social media sentiment has fallen to levels similar to those seen before its 2025 price surge, according to a crypto sentiment analyst.
The pattern has drawn comparisons to a period that preceded Ethereum’s return to its 2021 all-time highs.
“Ethereum is actually way down, this would argue against us falling too much further,” Santiment analyst Brian Quinlivan said in a YouTube video published Saturday.
“This is kind of reminiscent of what we saw before Ethereum went on its major run last year,” he added.
Echoes Of The 2025 Ethereum Rally
Quinlivan pointed to Ethereum’s sharp rebound during 2025 as a reference point.
On August 23, Ether surged back to its 2021 peak of $4,878.
That move represented a near 70% gain over four months.
The rally followed a steep decline earlier in the year, when Ether fell to a low of $1,472 in April.
According to Quinlivan, the breakout occurred as market confidence in Ethereum was fading.
“Ether’s price took off just as people were really starting to write-off Ethereum,” he said.
Ethereum Holds Firm As Market Number Two
Since hitting its all-time high, Ether has fallen roughly 36%.
It was trading near $3,089 at the time of publication.
The decline followed a $19 billion crypto market liquidation event in October that dragged down the broader market.
Despite the pullback, Quinlivan does not believe Ethereum faces the same skepticism seen earlier in 2025.
“I wouldn’t say that is happening now,” he said.
“Ethereum is kind of back to being an expected number two market cap for a lot of people.”
Coinbase Asset Management president Anthony Bassili has expressed a similar view.
“There’s a very, very clear view in the investor community,” Bassili said previously.
“The right first portfolio is Bitcoin. The next is Bitcoin, Ethereum,” he added.
Network Growth And Staking Interest
Quinlivan remains optimistic about Ethereum’s underlying fundamentals.
He described the network’s growth as “absolutely going bonkers.”
He linked the expansion to rising interest in staking.
Staking discussions have become increasingly prominent across social media platforms.
That trend suggests users are engaging with Ethereum beyond short-term price speculation.
Broader Crypto Market Remains Cautious
The wider cryptocurrency market continues to show signs of caution.
Sentiment has hovered between “Fear” and “Extreme Fear” since early November.
On Sunday, the Crypto Fear and Greed Index posted a score of 29.
Market participants remain largely risk-off outside of Bitcoin.
The Altcoin Season Index currently signals a “Bitcoin Season” environment.
The index score of 34 out of 100 reflects weaker relative performance among altcoins.
This backdrop highlights Ethereum’s challenge in gaining momentum despite improving fundamentals.
Bitcoin may remain largely flat in the first quarter of 2026 despite historical trends suggesting stronger gains, CryptoQuant CEO Ki Young Ju said Wednesday.
“Capital inflows into Bitcoin have dried up,” Ju explained, noting that investors are returning to “stocks and shiny rocks” as gold and silver prices soar.
Ju added that Bitcoin is unlikely to crash from its current peak and expects “just boring sideways for the next few months.”
At the time of publication, Bitcoin was trading around $90,890, down over 2% in the past 24 hours and off a high of $94,400 earlier this week.
First Quarter Trends
A sideways start would break with historical performance, as January has averaged 3.81% gains since 2013, with February and March showing stronger historic growth of 13.12% and 12.21%, according to CoinGlass.
Ju’s remarks follow warnings from veteran trader Peter Brandt and Fidelity’s Jurrien Timmer that Bitcoin could fall to $65,000 or even $60,000 this year.
Market sentiment remains muted, with the Crypto Fear & Greed Index hovering between “fear” and “extreme fear” since early November.
On Thursday, the index posted a “fear” score of 28, reflecting cautious investor behavior.
Spot Bitcoin ETFs Show Early Momentum
Spot Bitcoin ETFs have seen net inflows of $925.3 million in the first three trading days of 2026, according to Farside Investors data.
While Ju maintains a conservative outlook, other participants are bullish.
Venture capitalist Tim Draper predicted “2026 will be big,” noting that Bitcoin is going mainstream and referencing his $250,000 prediction from 2018.
Bitwise head of research Ryan Rasmussen expects Bitcoin to break the traditional four-year cycle and reach new all-time highs in 2026, contrary to historical patterns of three up years followed by a down year.
US-based cryptocurrency exchange-traded funds attracted more than $31.77 billion in net inflows during 2025.
The strong demand came despite digital asset markets losing momentum toward the end of the year.
Spot Bitcoin ETFs accounted for the majority of capital entering the sector.
Collectively, they recorded $21.4 billion in net inflows over the year, according to industry data.
That figure, however, represented a decline from the $35.2 billion seen in 2024.
Ether-focused ETFs told a different story.
Spot Ether funds pulled in $9.6 billion during 2025, a fourfold increase compared to the previous year.
The jump reflected the fact that Ether ETFs only launched midway through 2024.
As a result, 2025 marked their first full year of trading.
New products also expanded the market beyond Bitcoin and Ether.
Spot Solana ETFs entered the US market in late October and have already accumulated $765 million in inflows.
Regulatory changes played a role in the expansion.
A more crypto-friendly US administration and new leadership at the Securities and Exchange Commission helped speed up approvals.
That environment encouraged institutional investors to explore regulated crypto exposure.
BlackRock strengthens its dominance
BlackRock emerged as the clear leader in the crypto ETF space.
Its iShares Bitcoin Trust ETF recorded $24.7 billion in inflows by year-end.
The total is roughly five times larger than that of its closest rival, Fidelity’s Bitcoin fund.
The scale of demand placed IBIT among the top six ETFs of any kind by net inflows.
Bloomberg analyst Eric Balchunas highlighted the achievement despite Bitcoin’s price softness during the year.
“If you can do $25b in [a] bad year imagine the flow potential in [a] good year,” he said.
Excluding IBIT, the remaining spot Bitcoin ETFs experienced net outflows of $3.1 billion.
Several funds saw only modest gains, while one major trust shed roughly $3.9 billion.
Ethereum ETFs lose short-term momentum
BlackRock also leads the Ethereum ETF market through its iShares Ethereum Trust.
The fund holds nearly $12.6 billion in inflows overall.
However, it has failed to attract new capital over the past dozen trading sessions.
Rival Ethereum ETFs trail at a significant distance.
Recent on-chain data suggests subdued demand for both Bitcoin and Ether ETFs heading into 2026.
That slowdown may result in a cautious start to the new year.
Wave of new products expected
Litecoin, Solana, and XRP ETFs launched in the second half of 2025.
They expanded investor access to major altcoins through traditional investment vehicles.
Analysts expect far more products to follow.
Revised SEC listing standards could allow more than 100 crypto ETFs to launch in 2026.
Bloomberg analyst James Seyffart warned that many may struggle to survive.
“We’re going to see a lot of liquidations in crypto ETP products,” he said.
“Might happen at [the] tail end of 2026 but likely by the end of 2027.”
XRP managed to stay above a critical support range that has been stabilizing its price through most of 2025.
Market participants are watching closely to see if holding this level, combined with falling exchange balances, could spark a broader recovery in 2026.
Exchange Holdings at Multi-Year Low
Data from Glassnode reveals that the amount of XRP stored on exchanges has fallen dramatically over the past two months.
From October 8 to this week, the total supply on exchanges declined from 3.76 billion tokens to roughly 1.6 billion.
These levels have not been observed since August 2018, highlighting a significant shift in holder behavior.
Traders often view reduced exchange balances as an indication that holders are moving assets into private storage or long-term holdings.
LeviRietveld, a trader and analyst, noted on X:
“$XRP supply tightens with about 1.5 Billion left on exchanges. Bullish, grab yours now!”
The drop coincided with unprecedented net outflows, as 1.4 billion XRP moved off exchanges on October 19 alone.
Institutional Accumulation and Reduced Selling Pressure
Large holders are typically behind such outflows, moving their tokens to cold storage or investment products.
This kind of activity lowers immediate selling pressure and can create conditions for price growth.
A trader known as Skipper observed:
“ETFs are draining $XRP from exchanges, tightening liquidity. XRP is now entering a more structural phase.”
He added that shrinking liquidity is changing how XRP’s price is determined, suggesting stronger potential for a recovery.
Strong Support Around $1.78
XRP’s price recently found support in the $1.60 to $1.84 range, a zone that has consistently held buyers throughout 2025.
According to Glassnode, $1.78 represents a particularly important level where over 1.8 billion tokens were previously acquired.
Should this zone hold, XRP could see renewed momentum and possibly a breakout on the weekly charts targeting higher levels around $3.79.
Analyst VipRoseTr stated:
“A breakout from the downtrend channel signals a possible bullish reversal.”
However, a failure to hold $1.78 could limit upside potential, leaving XRP range-bound until fresh bullish drivers emerge.