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Bitcoin BTC$83,960.33 closed the third quarter up 40%, outrunning every major asset even as Treasury yields climbed to their highest in more than two decades. Investors poured billions of dollars into exchange-traded funds tied to BTC and other tokens, and several altcoins rallied even harder, leaving analysts convinced a new bull run has arrived.
Yet amid the rally, one familiar stain on the industry's image kept spreading. That’s hacks and exploits. The money lost in these incidents is small next to the billions flowing into ETFs, but the damage to crypto's reputation is harder to wave away.
Crypto suffered 247 security incidents in the third quarter, with losses totaling $1.26 billion, according to data tracked by crypto security firm CertiK. Losses for the year so far stand at $2.68 billion. September was the worst month yet, with 99 incidents, the most since February 2025, and $768.5 million stolen, the largest monthly haul of 2026.
"Yes, it is bad optics," Nicolai Sondergaard, senior research analyst at Nansen, told CoinDesk. "The reputational damage can still be larger than the losses themselves. Repeated exploits reinforce the idea that crypto infrastructure remains operationally fragile, which can slow institutional adoption, increase scrutiny from regulators and custodians, and make allocators demand a higher risk premium.”
For now, the losses barely register against the capital arriving through ETFs, Sondergaard explained, adding that most institutions are buying crypto through regulated, familiar wrappers and staying away from DeFi protocols altogether.
CertiK said the numbers show how deeply rooted the problem remains.
"September was a stark reminder of how quickly the threat landscape can shift. With both losses and incident count reaching their highest levels of 2026, the month's data reinforces the need for security across every layer," it said on X.
The insurance safety net remains relatively small and is shrinking relative to risks. CoinGecko's State of Crypto Security Report 2026 released at the end of August noted this trend, and put the on-chain crypto insurance coverage capacity at $130.2 million, down 20.2% from $163 million last year.
Overall the insurance sector has struggled to match risks, as CoinDesk noted early this year.
Amid all this, artificial intelligence (AI) is adding a fresh threat.
“My longer-term concern is speed, now AI tools are automating the hunt for weaknesses in smart contracts, work that used to take a skilled engineer months. That shortens the time anyone has to fix a flaw before it is used,” Oliver Carding, Head of Marketing at Tesseract Group, said in an email.
Security firm Blockaid expects multiple incidents involving AI agents, with prompt injection, where hidden instructions trick an AI agent into acting against its user, the most likely route.
To conclude, the bull market may be back, but so are the malicious entities trying to cash in on its weak spots.
Stay alert!
What’s trending
- MetaMask security incident forces Ethereum staking exits, no funds at risk (CoinDesk): MetaMask is pulling Ethereum staking systems out of service after a security incident, with Lido warning of lost rewards and a security researcher reporting that payments from producing blocks were diverted to another wallet.
- 10-year Treasury yield hits highest level since 2002 as global bond rout gathers pace (CNBC): U.S. Treasury yields hit their highest level in more than two decades on Thursday as a global bond sell-off deepened. The yield on the 30-year Treasury bond jumped 3 basis points to 5.6702%, its highest level since July 2002. The 2-year yield was 2 basis points higher at 4.91%.
- EU questions Binance over continued operations despite wind-down order (FT): EU officials are questioning Binance over its use of a legal exemption to continue serving customers in the region despite an order to wind down its business in the bloc.
- Citigroup raises 12-month bitcoin target to $113,000 as ETF inflows resume (CoinDesk): Citi expects slow but steady inflows into products like ETFs as advisers and brokerages favour gradual increases in bitcoin allocations, forecasting $5 billion of inflow over the next 12 months.
Today’s signal
The chart shows daily swings in the Binance-listed ether-bitcoin (ETH/BTC) ratio in candlestick format.
After a steep climb through July and August, the pair’s uptrend has stalled. Repeated failures to sustain momentum above 0.033, followed by sideways churn, have broken the bullish trendline.
That shift puts the Ichimoku cloud in focus. A decisive break below the cloud would confirm a bearish trend reversal, pointing to a renewed downtrend for ether against bitcoin.
