Bitcoin News Today: Security Fears Undermine Bitcoin's ETF-Driven Rally as Volatility Persists

Bitcoin's price dipped below $87,000 in early December 2025, erasing a week's worth of gains in a single candlestick, as market participants grappled with renewed volatility amid a series of high-profile crypto incidents and shifting institutional sentiment. The selloff followed a $36 million Solana hot wallet breach at South Korea's Upbit exchange, the largest crypto platform in the region, which suspended deposits and withdrawals to contain damage. The incident, occurring just a day after Upbit's parent company, Dunamu, announced a $10.3 billion merger with Naver, reignited concerns over security vulnerabilities in the crypto sector. Upbit assured users it would cover all losses, a move that temporarily eased fears but did little to stabilize broader market sentiment according to reports.

The breach highlighted ongoing challenges in securing digital assets, particularly as exchanges face increasingly sophisticated attacks. North Korean hacking groups, such as Lazarus, have long been implicated in such exploits, with Upbit itself having suffered a $50 million breach in 2019. Meanwhile, the Balancer protocol community proposed a distribution plan for $8 million in funds recovered from a $116 million exploit in November, underscoring the complexity of post-hack recovery efforts according to reports. The proposal emphasized in-kind reimbursements to liquidity pool holders, aiming to minimize price mismatches between tokens. However, the incident also sparked debates about the efficacy of smart contract audits, as Balancer's code had been reviewed 11 times by security firms prior to the breach.

Bitcoin's price action, meanwhile, showed signs of resilience amid the turmoil. BlackRock's spot Bitcoin ETF holders returned to profitability after the asset reclaimed $90,000, with the iShares Bitcoin Trust ETF (IBIT) generating a cumulative $3.2 billion in unrealized gains. This marked a turnaround for ETF investors, who had previously seen profits evaporate in late November amid a sharp pullback. The rebound coincided with growing expectations of U.S. Federal Reserve rate cuts in December, which boosted risk appetite across markets.

Analysts pointed to key technical levels as Bitcoin tested support near $90,000, with some bullish price targets re-emerging closer to $100,000. Traders noted that a breakout above the 2025 yearly opening level of $93,000 could reignite upward momentum, while consolidation around $97,000 was seen as critical for sustaining gains. The futures market also signaled a potential shift in sentiment, with leverage washouts and neutralizing cumulative volume delta (CVD) metrics suggesting a more sustainable recovery phase according to reports.

Institutional adoption continued to gain traction, with Bhutan staking $970,000 worth of Ether through Figment and expanding its crypto infrastructure, including a migration of its digital ID system to Ethereum according to reports. Meanwhile, BlackRock's ETFs became its top revenue source, generating hundreds of millions in fees as institutional demand for Bitcoin exposure surged.

Despite these developments, macroeconomic uncertainties and regulatory scrutiny remained headwinds. Tether's CEO pushed back against S&P Global's downgrade of its stablecoin's peg, while Strategy CEO Phong Le reiterated that Bitcoin sales would only occur as a "last resort" if the firm's net asset value (NAV) faltered.

As the market navigated a fragile balance between optimism and caution, the coming weeks would test whether Bitcoin's recent gains could hold-or if further corrections loomed.