Bitget Hack Drives USDC Into ETH Amid Freeze Dispute
The Bitget hack exposed about $351.6 million in unauthorised transfers from hot wallets on September 24, according to the exchange. Lookonchain estimated the stolen assets at roughly $356.8 million, including 102.93 million XRP, 31,890 ETH and 21.05 million USDC. The differing totals reflect changes in market prices and valuation methods.
Bitget said its cold wallets and customer balances were safe. CEO Gracy Chen said the attacker likely accessed backend wallet infrastructure, spoofed transaction data and abused the exchange’s authorisation process. The entry point remains under investigation, while Bitget says its protection fund, valued at more than $464 million, can cover the loss. The exchange also temporarily suspended withdrawals after detecting the incident.
Wallets linked to the Bitget hack moved USDC across chains and converted part of the funds into ETH, raising concerns about potential ETH selling pressure. Circle and Tether later froze one address labelled “Bitget Exploiter 8”, containing about 218,023 USDT and 99,990 USDC, worth roughly $318,000, plus 170.47 ETH. The freeze recovered only a small portion of the stolen assets because stablecoin issuers cannot block ETH or other non-custodial crypto assets.
The response has renewed debate over Circle’s USDC freeze policy. Circle says it generally acts when legally compelled, although its terms allow it to block addresses linked to illegal activity. Critics, including security researchers, argue that delays can give attackers time to bridge or swap USDC. Similar concerns followed the Drift exploit, while ZachXBT has cited 15 earlier cases involving more than $420 million in suspected illicit USDC flows.
For traders, the Bitget hack increases short-term risks from ETH selling, exchange counterparty exposure and uncertainty over stablecoin controls. The incident is also likely to keep attention on on-chain fund movements, exchange security and the effectiveness of crypto asset recovery measures.
Bearish
The immediate price impact is bearish, particularly for ETH. Wallets linked to the Bitget hack converted part of the stolen USDC into ETH, creating a potential source of forced or opportunistic selling. Large dormant balances, including more than 63,000 ETH previously linked to the attackers, could add further supply risk if moved to exchanges or decentralised markets.
The freeze of USDC and USDT limits the attackers’ ability to use some of the stolen funds, but it does not recover ETH or prevent all cross-chain activity. This reduces the effectiveness of the intervention from a market perspective. Traders may therefore price in additional ETH volatility, monitor known exploiter wallets and reduce exposure to exchanges viewed as vulnerable.
In the short term, the incident could pressure ETH and weaken confidence in exchange security and stablecoin settlement. In the longer term, Bitget’s protection fund and the safety of customer balances may limit contagion if losses are fully covered. Stronger wallet controls, faster issuer coordination and clearer freeze policies could eventually support market confidence. However, until the stolen assets are contained and the attack vector is identified, security concerns and potential selling pressure outweigh those stabilising factors.