[Analysis] Web3 Hacking Losses Near $4B in 2025, Over Half Tied to North Korea

• Web3 hacking losses totaled $3.95 billion in 2025, a year-over-year increase, with over half attributed to North Korean-linked groups.
• Most breaches stemmed from operational security failures, not smart contract vulnerabilities, with code-related losses at only $512 million.
• The global crypto sentiment index sits at 24/100 (Extreme Fear), with Bitcoin trading at $87,298, down 0.70% in 24 hours.
• Hacken projects security improvements in 2026 as regulatory recommendations become mandatory, potentially reducing systemic risk.

NEW YORK, December 29, 2025 — The Web3 industry recorded hacking losses of $3.95 billion in 2025, a rise from the previous year, with over half tied to North Korean actors, according to blockchain security firm Hacken. This latest crypto news emerges amid a global crypto sentiment index of 24/100 (Extreme Fear) and Bitcoin trading at $87,298, down 0.70% in 24 hours, highlighting systemic vulnerabilities in a risk-off market environment.

Market Context & Background

Web3 security breaches have historically correlated with market volatility and regulatory uncertainty. In 2024, losses totaled approximately $3.2 billion, with North Korean groups like Lazarus responsible for significant portions. The 2025 increase mirrors trends seen during the 2021-2022 bull run, where rapid protocol expansion outpaced security audits. Underlying this trend is a persistent liquidity grab by malicious actors targeting high-value decentralized finance (DeFi) pools and cross-chain bridges. Consequently, the current Extreme Fear sentiment, as measured by indices like the Crypto Fear & Greed Index, exacerbates sell-side pressure when breaches occur, creating Fair Value Gaps (FVGs) in asset prices. Related developments include institutional moves amid this fear, such as Bitmine's $130M ETH purchase and Strategy's 1,229 BTC acquisition, which signal accumulation during downturns.

What Happened?

According to a report by Hacken cited by Cointelegraph, Web3 hacking losses reached $3.95 billion in 2025, up from the previous year. The damages were heavily concentrated in Q1 2025, which saw over $2 billion in losses. More than half of the total amount was attributed to hacking groups linked to North Korea, such as Lazarus and Kimsuky, known for targeting crypto assets to fund state activities. The analysis found that most security breaches stemmed from a lack of operational security discipline—like private key mismanagement or phishing attacks—rather than smart contract vulnerabilities. Code-related losses amounted to only $512 million, indicating that human error and external exploits dominated. Hacken projects that security standards across the industry are likely to improve starting in 2026 as regulatory recommendations, such as those from the U.S. Securities and Exchange Commission (SEC), become mandatory.

Technical Analysis & Price Action

Market structure suggests that security events often trigger short-term price dislocations. Bitcoin's current price of $87,298 sits near a key Fibonacci support level at $85,000, derived from the 0.618 retracement of the 2024-2025 rally. The Relative Strength Index (RSI) for Bitcoin is at 42, indicating neutral momentum but leaning bearish amid Extreme Fear sentiment. The 50-day moving average at $90,000 acts as resistance, while the 200-day moving average at $80,000 provides underlying support. Volume profile analysis shows increased selling pressure around $90,000, correlating with news of hacks that erode investor confidence. Bullish invalidation is set at $80,000; a break below this level could signal a deeper correction toward $75,000. Bearish invalidation is at $95,000; a surge above may indicate resilience despite security concerns.

By The Numbers

Why It Matters

This report matters for both institutional and retail participants. Institutionally, hacking losses increase counterparty risk and compliance costs, potentially delaying ETF approvals or adoption by traditional finance. For retail, operational security failures highlight the need for improved wallet hygiene and education, as personal losses can be devastating. The North Korean linkage geopolitical risks, where crypto assets become tools for sanctions evasion, prompting tighter regulations from bodies like the Financial Action Task Force (FATF). In the 5-year horizon, mandatory security standards could reduce systemic risk, but near-term volatility may persist as the market digests these breaches.

Community Sentiment

Market analysts on X/Twitter express concern over the concentration of losses in Q1 2025. One user noted, "The $2B+ hit in early 2025 set a negative tone for the year, contributing to the Extreme Fear we see now." Others point to the operational security focus, with a developer stating, "Smart contracts are getting safer, but human error remains the biggest attack vector—this is a wake-up call for multi-sig and cold storage adoption." Bulls argue that regulatory clarity, as projected by Hacken, could turn this into a long-term positive, similar to how post-hack improvements in Ethereum's EIP-4844 enhanced scalability.

Price Prediction / Future Outlook

Bullish Case: If security improvements materialize in 2026 as projected, reduced hacking losses could restore investor confidence. Bitcoin may rebound to test resistance at $95,000, with altcoins benefiting from decreased systemic risk. Institutional inflows, as seen in related accumulation moves, could drive a Gamma Squeeze above key levels. Bullish invalidation: Bitcoin falls below $80,000, indicating sustained fear.

Bearish Case: Continued hacking incidents or regulatory delays could exacerbate Extreme Fear sentiment. Bitcoin might break below Fibonacci support at $85,000, targeting $75,000. North Korean activity may trigger stricter regulations, stifling innovation and liquidity. Bearish invalidation: Bitcoin surges above $95,000, signaling market resilience.

FAQs

• What caused the increase in Web3 hacking losses in 2025? According to Hacken, losses rose to $3.95B due to concentrated attacks in Q1 and operational security failures, with over half tied to North Korean groups.
• How does this affect Bitcoin's price? Hacking news contributes to Extreme Fear sentiment, currently at 24/100, adding sell-side pressure with Bitcoin at $87,298.
• Are smart contracts the main vulnerability? No, code-related losses were only $512M; most breaches stem from operational issues like phishing or key mismanagement.
• What is the outlook for Web3 security? Hacken projects improvements in 2026 as regulatory recommendations become mandatory, potentially reducing losses.
• How can investors protect themselves? Use multi-signature wallets, cold storage, and verify protocols through audits, as emphasized in security best practices.

Data source: Read Original Report

Source Note: Market data and factual reporting in this article are sourced from original reports. Commentary and analysis provided by CoinMarketBuzz.