Bitcoin network split, Bybit's lawsuit against North Korea, and Strategy's approach: key events of the week
The outgoing week was rich in events capable of shifting the balance of power in the industry. A technical split in the Bitcoin network, a lawsuit against an entire state, and strategic maneuvers by the largest corporate holders — we break down what this means for the market.
Bitcoin recovered to $65,000
The start of the week was marked by a continued correction: on August 4, the leading cryptocurrency fell below $63,000. On-chain data confirmed the prolonged nature of the decline — analysts recorded a record-long capitulation phase, warning that the drop in volatility should not be seen as a sign of calm.
However, institutional flows drove the reversal. Spot Bitcoin ETFs attracted $853 million, and wallets holding between 10 and 10,000 BTC accumulated over 20,000 coins since July 29. Ethereum funds also posted their best weekly inflow since mid-April — $244 million. As a result, Bitcoin rose 3.4% over the week to reach $65,200, while Ether gained 3.7%. The Fear and Greed Index remains in the "fear" zone at 31, indicating persistent skepticism among retail investors.
Bitcoin network split over BIP-110
On August 8, the leading cryptocurrency's network experienced a split at block #961,632. Nodes supporting BIP-110 stopped accepting blocks without a signal of support for the proposal. Competing blocks from AntPool and the Ocean pool led to a temporary chain divergence. However, the forked branch quickly fell behind: in eight hours, it mined only two blocks versus 48 on the main network, rendering it unviable.
Notably, support for the proposal was minimal — only 2.53% of blocks signaled it against the required 55%. Developer Kevin Loake warned of the risk of losing real bitcoins: both branches accept identical transactions, and a signed transfer could be sent to both networks by an attacker.
Strategy sells off Bitcoin
Strategy sold 1,638 BTC for $104.7 million over the week, directing the proceeds to dividends and a buyback of STRC shares. Its holdings dropped to 842,138 BTC, with an unrealized loss reaching $10.9 billion at an average entry price significantly above current quotes. This is not a one-off measure but part of a framework program with a $5 billion sales limit.
The quarterly net loss of $8.22 billion was almost entirely driven by asset revaluation. CEO Phong Le confirmed that raised capital will no longer be automatically converted into Bitcoin. Notably, other treasuries are acting differently: BitMine Immersion Technologies bought 10,399 ETH over the week, bringing its holdings to 4.8% of the total Ether supply.
Coldcard hack triggered a wave of audits
The theft of assets from Coldcard hardware wallets escalated into a large-scale review of the entire Bitcoin infrastructure. Losses from the attacks are estimated at $100–130 million, with at least 15 different attackers exploiting the vulnerability. No mass sell-off followed — holders moved funds to new addresses rather than to exchanges.
The volunteer group Bitcoin Red Team launched an AI audit of 390 projects, submitting 4,962 reports in 27.5 hours, of which 85 were classified as critical risk. One of the discovered issues has already resulted in a new incident — the compromise of Lightning nodes via BTCPay. This confirms that open source does not equal audited, and cybersecurity is becoming a matter of investment in AI-driven protection.
Bybit filed a lawsuit against North Korea
Exchange Bybit initiated a civil lawsuit against North Korea, its intelligence agency, and the Lazarus Group over the theft of $1.5 billion in February 2025. Documents were filed as early as June 18 but have only now been unsealed. The platform demands the return of funds, $1.5 billion in compensation, and triple damages. Only $75.5 million has been traced — 90.2% of the stolen funds passed through mixers and became untraceable.
The scale of North Korean operations turned out to be broader: researcher Vangelis Stikas found traces of hackers in 1,640 organizations across 57 countries. Groups linked to North Korea account for over 70% of global crypto thefts — compared to 30% in 2017.
CLARITY Act postponed
The U.S. Senate postponed the procedural vote on the crypto market structure bill to September 15. Republicans lack the votes — to surpass the 60-vote threshold, they need Democratic support, and there are objections within the faction regarding stablecoin yields. The key contentious point is ethical rules requiring the president to divest from crypto assets. Traders on Polymarket put the odds of the bill passing at 21%.
Miners in the red
MARA Holdings ended the quarter with a loss of $611.3 million, while CleanSpark posted a $239.8 million loss. The reason is a 28% year-over-year drop in Bitcoin's price. The industry has intensified its fight for energy capacity, but AI developers have become competitors: SpaceX and Tesla are investing $16.8 billion in a chip plant in Texas. The state governor imposed a moratorium on connecting data centers, which could benefit miners with already approved contracts.
My take: the week showed that the market is entering a consolidation phase where institutional flows support the price, but retail fear persists. The network split is a technical incident without long-term consequences, while the Bybit lawsuit could set a precedent for legal action against state-sponsored hackers. Strategy's Bitcoin sell-off is a worrying signal, but it is offset by accumulation from other major players. The key intrigue remains the fate of the CLARITY Act in September.