Bitcoin Breaks $100,000 Amid Coinbase Security Crisis
Bitcoin has once again surpassed the psychological $100,000 mark, despite turmoil in the cryptocurrency industry, including a major security breach at Coinbase, the world’s third-largest exchange.
Coinbase at the Center of a New Cybersecurity Crisis
Coinbase said cybercriminals exploited a vulnerability in its overseas customer support department, illegally recruiting several employees to steal user data. The company refused to pay the $20 million ransom but pledged to set up a reward fund of the same value to catch the perpetrators. The estimated cost of the incident could be as high as $400 million, including the cost of compensating affected users.
The event raises alarm bells about the security risks of centralized platforms, even as Coinbase continues to see institutional inflows, with Bitcoin withdrawals hitting a yearly high of more than 9,739 BTC (more than $1 billion) on May 9 alone, according to Bitwise.
Bitcoin Market Rebounds Amid Geopolitical Turmoil
Despite the security crisis and global economic turmoil, Bitcoin has shown remarkable resilience, returning to the $100,000 mark for the first time since February. The coin had previously fallen more than 30% following President Trump’s “Liberation Day” tariff announcement in early April, pulling the price from a high of $109,241 to a low of $74,000.
However, the situation has since reversed thanks to the “de-escalation” of trade tensions between the US and China. US Treasury Secretary Scott Bessent announced a 90-day tax cut, helping to improve market sentiment and restore global investor confidence.
Bitcoin ETFs and institutional money play a leading role
Bitcoin ETF products continue to attract large inflows. Currently, the total assets under management (AUM) of these ETFs has surpassed the $110 billion mark, accounting for more than 1% of the global ETF market. According to Bloomberg data, four of the twelve newly issued Bitcoin ETFs are among the top 20 most successful ETF launches in US history.
The “Fear & Greed Index” remains in the “Greed” zone with a score of 69, reflecting investor optimism despite security risks from centralized exchanges like Coinbase.
DeFi: Uneven Growth, Risks Remain
While Bitcoin is soaring, the decentralized finance (DeFi) ecosystem is showing mixed results. Lending protocol Aave hit a new record TVL of $40.3 billion on May 12, but other platforms like Rootstock saw declines. Messari’s Q1 report showed Rootstock’s Bitcoin TVL down 7.2%, while its USD TVL fell more than 20% from the previous quarter.
Security remains a major weakness. Bybit’s hack in February resulted in losses of more than $1.5 billion, one of the largest in DeFi history.
Policy and market expectations shape Bitcoin’s future
Investors are closely watching regulatory developments in 2025. The Trump administration is considering a slew of ETF proposals for major coins like Solana, Polkadot, and XRP. The SEC has postponed its decision on Grayscale’s Solana ETF until October 2025, while key milestones for the Polkadot and XRP ETFs are due in June.
According to Investopedia, analysts at Bitwise believe Bitcoin could hit $200,000 by the end of the year, while VanEck predicts a price of $180,000. However, macro risks remain: the Federal Reserve has scaled back its rate-cut expectations, boosting bond yields and potentially curbing capital flows into riskier assets like Bitcoin.
Outlook: Bitcoin continues to lead, regulation plays a key role
According to LiteFinance’s forecast, Bitcoin’s price in 2025 could range from a low of $85,753 to a potential peak of $210,125. Long-term growth is expected to come from increased investment from financial institutions and technological advancements in the blockchain ecosystem.
Against this backdrop, the Global Bitcoin Policy Index (GBPI) is emerging as an important indicator of each country’s friendliness to cryptocurrencies. The index provides a comprehensive view of the legal, tax, regulatory frameworks, and levels of support for innovation – factors that will determine global capital flows in the digital currency era.