Bitcoin network split, Bybit lawsuit against North Korea, and other events of the week: Cryptalist analysis
The outgoing week was rich in events that could determine the market's trajectory for months to come. From an unexpected split in the Bitcoin network to a historic lawsuit against an entire state, I have broken down the key moments that require your attention.
Bitcoin recovered to $65,000, but fear persists
The start of the week continued the bearish trend: on August 4, the leading cryptocurrency dipped below $63,000. On-chain analytics recorded a record-long capitulation phase, pointing to a deep market drawdown. However, as I anticipated, the decline in volatility did not mean calm, but rather a buildup of strength before a surge.
The reversal was driven by institutional money. Spot Bitcoin ETFs attracted $853 million, while wallets of "whales" with balances from 10 to 10,000 BTC added more than 20,000 coins over the week. Ethereum funds also posted their best weekly inflows since mid-April ($244 million). As a result, BTC rose 3.4% to $65,200, and ETH gained 3.7%. Nevertheless, the Fear and Greed Index remained stuck at 31, indicating lingering nervousness among participants.
Bitcoin network split: BIP-110 triggered a hard fork
On August 8, at block #961,632, the leading cryptocurrency's network split. Nodes supporting the BIP-110 soft fork refused to accept blocks without a signal of support, leading to the creation of a competing branch by the Ocean pool. This event is not just a technical quirk but a serious signal of disagreements within the community over the protocol's future development.
Support for BIP-110 was minimal (2.53% of blocks against the required 55%), so the alternative chain is doomed to lag behind. However, developer Kevin Loake rightly warned of the risk of fund loss: both branches accept identical transactions, making a replay attack possible.
Bybit vs. North Korea: an unprecedented lawsuit
Crypto exchange Bybit filed a civil lawsuit against North Korea and the Lazarus Group hacking collective in the U.S. District Court for the District of Columbia. The claim seeks the return of $1.5 billion plus treble damages. This is the first time a crypto exchange has sued an entire state at such a level.
The situation is compounded by the scale of North Korean operations: researchers have found traces of hackers in the systems of 1,640 organizations worldwide. According to TRM Labs, North Korean groups now account for over 70% of all digital asset thefts. This has become a systemic threat that cannot be ignored.
U.S. Senate postpones CLARITY Act
The procedural vote on the crypto market structure bill has been moved to September 15. Republicans lack the votes, and intra-party disagreements over stablecoins only worsen the situation. The market estimates only a 21% chance of passage by year-end, but even the mere movement of the document is a positive signal for the industry.
Strategy and miners: uncertainty grows
Strategy continues to sell bitcoins to buy back its own shares, recording an unrealized loss of $10.9 billion. This marks a reversal from its previous accumulation policy. Meanwhile, miners like MARA and CleanSpark slipped into quarterly losses due to the drop in BTC's price but continue to fight for energy capacity, competing with AI giants.
My conclusion
The week showed that the market is in a turning phase. Institutional inflows and whale accumulation offer hope for a bullish scenario, but the network split and lawsuits add turbulence. I recommend caution and monitoring the $65,000 and $62,000 levels as key markers. In the long term, however, legal precedents and institutional clarity are what the market needs most right now.