Bitcoin closed the third quarter up 40%, outperforming every major asset even as Treasury yields reached their highest level in over two decades. Investors channeled billions into BTC exchange-traded funds, and several altcoins rallied even more sharply, reinforcing analysts’ conviction that a new bull market has begun.
Yet amid the rally, the industry’s reputation continued to suffer. Hacks and exploits persisted throughout the quarter. While the losses pale in comparison to the capital flowing into ETFs, the reputational damage is harder to dismiss.
According to CertiK, the crypto sector experienced 247 security incidents in Q3, resulting in $1.26 billion in losses. Year-to-date losses have reached $2.68 billion. September was the worst month, with 99 incidents—the most since February 2025—and $768.5 million stolen, the largest monthly total of the year.
“Yes, it is bad optics,” Nicolai Sondergaard, senior research analyst at Nansen, told CoinDesk. “The reputational damage can still outweigh the losses themselves. Repeated exploits reinforce the perception that crypto infrastructure remains operationally fragile, which could slow institutional adoption, invite greater regulatory scrutiny, and push allocators to demand a higher risk premium.”
For now, the losses barely dent the capital entering through ETFs, Sondergaard noted. Most institutions are purchasing crypto through regulated vehicles and steering clear of DeFi protocols entirely.
CertiK’s data underscores how deeply rooted the security problem remains.