Plus: Is the market calm before the Q4 storm?

GM. A day in crypto is like peeling a grapefruit - messy, a little bitter, but worth digging into.

Here's what peeled back today:

⚠️ Hyperliquid ecosystem exploits;

🍍 Q4 optimism;

🍋 Best leverage platforms, Cathie Wood on Hyperliquid + more

⚠️ Hyperliquid ecosystem exploits

Trading on DeFi is a bit like flying on autopilot.

Most of the time, the plane handles itself - smooth, efficient, and often safer than a human hand.

But if there's a flaw in that autopilot system... everyone on board might be at risk.

Case in point: what just happened to Hyperdrive, a yield/markets protocol built on the Hyperliquid ecosystem.

Hackers found a bug in one of Hyperdrive's routers - basically a piece of code that tells money where to go. And that bug gave them permission to do things they shouldn't have been able to do.

The result: ~$773K drained from two user accounts, mostly in thBILL, a token that represents US Treasury bills.

The stolen funds were split up and sent across different blockchains - BNB Chain and Ethereum - a common technique that makes money harder to recover.

To contain the damage, Hyperdrive froze its markets, then patched the bug and promised to reimburse the affected users.

Now, sure, crypto hacks happen... uhh, very often. But this one stings a bit more because of what was taken.

thBILL is backed by US Treasuries, aka one of the safest assets in TradFi. That's why people buy it: it feels low-risk.

Keyword: feels.

To be clear, thBILL itself wasn't compromised; the vulnerability was in Hyperdrive's router. But that doesn't change the outcome: people still lost money.

Which brings us to the takeaway here - in DeFi, it's not enough to trust the asset; you also have to trust the code that handles it.

And, to be fair, the "trust" part has been a little wobbly in the Hyperliquid ecosystem lately.

Just a few days before the Hyperdrive exploit, another Hyperliquid-linked project, HyperVault, had some sketchy stuff goin' on:

About $3.6M was suddenly withdrawn from the protocol, bridged to Ethereum, swapped into ETH, and passed through Tornado Cash (a privacy tool often used to hide where money goes).

Then, HyperVault's website went offline, socials were deleted, and the team gave no explanation.

If 2+2=4, and 5+5=10, this sure looks like a rug pull - in other words, the project's own team might've stolen the money.

So, two incidents like this, super close together, understandably made some people question whether they can trust Hyperliquid in general.

"So, what's the takeaway? Hyperliquid = bad?" - you, maybe.

... No. Hyperdrive and HyperVault are separate projects that just happen to run on Hyperliquid. The Hyperliquid = bad minset wouldn't protect you, because the problems weren't caused by the base layer.

But then, what can protect you? Well, you can take some steps to limit your risk - though none of them are perfect:

👉 Choose platforms with a good track record: history isn't a guarantee, but it's better than nothing;

👉 Look for real audits: like multiple independent audits, bug bounties, and teams that respond fast when things go wrong;

👉 Don't put all your eggs in one basket: while it's tempting to dump everything into the platform with the best yields, if it goes down, you're stuck. Keeping funds across different wallets, chains, or even partly in traditional accounts reduces the risk;

👉 Keep long-term funds in self-custody: the safest place for assets you don't plan to move often is usually a hardware wallet (like a Ledger) or some other offline/self-custody setup.

All that being said, using DeFi always means taking on some level of risk.

In exchange, you get direct control over your money, faster access, lower costs, and fewer barriers than TradFi.

But there's no autopilot you can trust blindly. The only true defense is deciding which risks you're okay flying with, and which ones aren't worth boarding the plane for.

🥝 Memecoin harvest

Charts so green they make your salad jealous 🥗

Data as of 08:00 AM EST.

Check out these memecoins and plenty more here.

🍍 Market flavor today

The crypto market rn feels kinda like this 🧍 emoji: just standing there, not crashing, not exploding.

One reason is that new institutional money isn't flowing in as strongly as before.

Last week:

👉 Bitcoin ETFs had $897.6M in net outflows;

👉 Ethereum ETFs had $795.8M in net outflows.

That said, don't panic - this doesn't mean institutions are leaving for good.

More likely, they're waiting for clearer signs from the economy and from regulators before committing more capital. Or they're simply taking profits.

Speeeaking of which, almost 95% of Bitcoin holders are currently in profit, which increases the chance of selling pressure - because when people are sitting on gains, the temptation to cash out rises.

In the short term, this combo points to sideways trading with bursts of volatility.

Which way those bursts go might depend on US economic news, since it affects what people expect the Fed to do with interest rates.

(Quick reminder: a rate cut is usually bullish for crypto.)

That's why this week's labor market data calendar matters for crypto:

But it's not all spooky and cautious.

Some analysts, like CryptoQuant's Timo Oinonen, argue that Bitcoin entering Q4 - historically its strongest quarter - could bring us new all-time highs.

He leans on the Dow Theory, which says markets move in phases: first comes accumulation (the bottom zone when smart money starts buying) → then distribution (the top zone where profit-taking happens).

By his reading:

👉 In 2022, Bitcoin was in the distribution phase (lots of selling pressure, leading to falling prices);

👉 From 2023 through 2025, it has mostly been in the accumulation phase (steady buying as confidence rebuilt);

👉 And now, he argues we might be moving into the early part of another distribution phase - where prices increase before the next big sell-off.

The good news is the market doesn't look maxed out just yet, because, according to Oinonen:

👉 Leverage looks tame;

👉 Whales are actually adding to long positions instead of stepping back;

👉 And a couple of long-term models are showing that Bitcoin's undervalued. The fair value is placed at around $130K - $144K.

So, blend all that together, and you get a market that's cautious in the short term but has solid reasons to climb higher in the months ahead.

🍋 News drops you can't miss

⚡ Think you know where to get the best leverage in crypto? Our list of best crypto leverage trading platforms might surprise you (and save you a headache or two).

🤔 Cathie Wood's thoughts on Hyperliquid: "It reminds me of Solana in the earlier days."

🔒 Vitalik Buterin's against the EU's "Chat Control" plan. He said it would hurt people's right to private chats and make online security weaker.

🍌 Juicy memes