Bitcoin's Best Q3 Since 2017 and MetaMask Validator Incident

Bitcoin had its best third quarter since 2017, while MetaMask faced a security incident that led to the removal of validators. Balancer is set to shut down following a community vote.

Bitcoin has completed its strongest third quarter since 2017, breaking through resistance at $85,500. Meanwhile, MetaMask removed some validators following a security incident in its staking infrastructure, and Balancer holders voted to shut down the platform, among other notable events from the past week.

Bitcoin Records Best Q3 Since 2017

In the third quarter, Bitcoin surged by 42.71%, marking its best performance for this period since 2017, when it rose by 80.41%, according to CoinGlass. In contrast, the first two quarters of 2026 saw losses of 22.2% and 14.09%, respectively.

Throughout most of the week, Bitcoin's price fluctuated between $82,500 and $85,700. On September 29, it dipped to around $82,500 due to rising yields on U.S. government bonds and a strengthening dollar, but soon rebounded above $84,000.

The primary hurdle for growth was a cluster of sell orders around $85,000 to $85,500 on the Binance spot market, which had tripled in size since forming on September 24, according to Glassnode.

On October 2, buyers managed to break through this resistance, pushing prices to $86,913, the highest since September 23. However, there was no consensus on the future price direction of the leading cryptocurrency.

CryptoQuant analysts warned of a possible short-term pullback to $80,000, as unrealized profits for short-term holders reached a 21-month high. Another contributor noted that the MVRV Z-Score remains above the 365-day average, historically indicating a sustained long-term upward trend.

Additionally, Citigroup raised its 12-month price forecast for Bitcoin from $82,000 to $113,000 and for Ethereum from $2,240 to $3,028, citing increased market activity, favorable macroeconomic conditions, and a return of investors to ETFs.

By the end of the week, Bitcoin managed to stay above $85,000, trading around $85,200 at the time of writing, with a weekly increase of 0.25%.

Hourly BTC/USDT chart on Binance. Source: TradingView.

During the same period, altcoins displayed mixed performance. Ethereum's price fell by 0.3% ($2,700), XRP dropped by 2% ($1.5), and Hyperliquid declined by 2.5% ($90.06). Following a rally in late September, Zcash saw a decline of 19.48% ($1,330).

Top 10 cryptocurrencies by market capitalization. Source: CoinMarketCap.

The net inflow into spot Bitcoin ETFs for the quarter reached $6.34 billion, making it the best result for 2026 according to SoSoValue. However, on September 30, funds experienced an outflow of $149 million, ending a nine-day streak of inflows totaling approximately $3.1 billion. The trend reversed on October 1.

Bitcoin ETF flow chart. Source: SoSoValue.

The cryptocurrency Fear and Greed Index dropped from 70 to 65 points over the week, yet remained in the "greed" zone.

Fear and Greed Index for the cryptocurrency market. Source: Alternative.me.

The total market capitalization of digital assets remained steady at $2.9 trillion, with Bitcoin's dominance at 59.49% and Ethereum's at 11.44%.

MetaMask Removes Validators Following Staking Incident

On September 30, the MetaMask team reported a security incident involving part of its infrastructure. As a precaution, developers began removing affected Ethereum validators from their non-custodial staking service.

The company did not disclose the nature of the incident or the attack vector. On October 1, developers stated that they found no evidence that MetaMask wallets or user funds had been compromised.

"We’re continuing to actively investigate and respond to the security incident affecting part of our infrastructure. Our focus remains on working closely with affected partners and taking appropriate steps to protect users. As part of this, we worked with our partners to take the precautionary step of exiting affected validators. Based on our investigation to date, there is no indication that MetaMask wallets or customer funds have been affected. Our teams continue to work through containment and verification, and we’ll share further verified information as appropriate. As always, please remain vigilant: be cautious of unsolicited messages, never share your Secret Recovery Phrase or private keys, and rely on official MetaMask channels for updates. MetaMask will never ask you for your Secret Recovery Phrase. We’ll continue to share updates here as our investigation progresses: https://t.co/hbr8mYYp4W" — MetaMask 🦊 (@MetaMask) October 1, 2026

Details were later uncovered by independent researchers. According to Ethereum security expert Kaden, some MetaMask validators had their fee recipient addresses altered for several hours, resulting in approximately 0.36 ETH being siphoned off. His estimates suggest that around 17,000 validators, holding roughly 523,000 ETH, were impacted.

"After some on-chain sleuthing, I think this is what happened: 19 MetaMask validators had won block rewards, and 18 of the rewards were not paid to the correct fee recipient but instead to this tornado-funded account: 0x98B9231de84334c1d48BA0b72CF13f92484924A3. ~17k validators proactively exited, ~523k ETH total, unknown whether the attacker had the ability to change all fee recipients. It appears that 3 of the exploited validators have not yet been exited, and that 821 potentially impacted validators in total have yet to exit, unclear why. The attacker only stole ~0.36 ETH in rewards and likely never had the ability to withdraw any staked ETH. However, depending on how the attacker managed to get signing access, they could potentially cause the validators to be intentionally slashed." — kaden.eth (@0xKaden) October 1, 2026

On-chain calculations from Bitquery yielded a similar figure — 16,965 validators. MetaMask did not confirm this data.

The staked funds are protected by Ethereum's architecture. The signing key, which is responsible for voting on blocks, is held by the operator, while the withdrawal key, controlling the ETH, remains with the client.

Lido noted that MetaMask Staking (formerly Consensys Staking) is withdrawing its validators from the protocol, with the process expected to conclude by October 7. The complete cycle of re-entering staking may take up to 45 days, during which time the funds will not earn rewards.

To compensate for potential losses, Lido is utilizing a distributed network of operators and a reserve fund of 6,750 stETH. stETH holders do not need to take any action.

This mass exit sharply increased the queue for Ethereum staking withdrawals from around 170,000 ETH at the end of September to over 800,000 ETH by October 3.

Ethereum staking entry and exit queue over 90 days, in ETH. Source: Validator Queue.

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Balancer and Blast to Cease Operations, BitMart Proposes Compensation Plan

On September 29, BAL holders voted overwhelmingly in favor of a phased shutdown of Balancer, with 99.2% of votes cast (approximately 17.2 million tokens) supporting proposal BIP-928. An alternative initiative for a fork, BIP-929, was rejected by the community.

The protocol's pools will continue to operate until October 30, and withdrawals will remain open throughout this period.

On October 2, the team behind the L2 network Blast announced its closure, citing that the costs of maintaining the blockchain exceeded its revenues.

According to DefiLlama, the network's TVL dropped from over $2.2 billion in June 2024 to approximately $32 million.

Blast revenue chart. Source: DefiLlama.

Users were advised to withdraw their assets to the main Ethereum network by October 26. After this date, funds will only be accessible through direct interactions with bridge smart contracts.

Following the announcement, the BLAST token plummeted by 41% in a day to $0.00024. According to CoinMarketCap, the coin's overall value dropped by 68% for the week, trading at around $0.00015 at the time of writing.

Meanwhile, BitMart, which halted trading on August 26, acknowledged a shortage of funds to fully settle with clients, primarily attributing this to a 2021 hack that depleted reserves by $319.5 million.

The platform's management proposed three options for user compensation:

a proportional share of liquid assets;
a Restitution Token backed by funds that can be recovered from the hack;
a tradable Continuum Token on DEX.

The exchange plans to submit its compensation plan for court approval in December 2026 or January 2027.

SEC Proposes New Rules for Crypto Asset Custody

On October 1, the U.S. Securities and Exchange Commission (SEC) proposed new rules for the custody of crypto assets by investment advisors and regulated funds.

Under certain conditions, they will be allowed to hold client funds themselves or transfer them to state-licensed trust companies.

"Since Bitcoin's introduction in 2008, the crypto asset market has evolved from a niche phenomenon into a multi-trillion-dollar asset class that investors are actively seeking access to," stated SEC Chair Gary Gensler.

Advisors may only hold assets themselves if there is no permissible custodian available, which must be documented in writing and verified quarterly. The SEC has outlined additional requirements for this model:

approval for each transaction by at least two individuals;
separate addresses for each client's funds;
annual cybersecurity checks and independent audits of internal controls.

A trust company must have permission from its state banking regulator to store crypto assets and must segregate client funds from its own.

The rules have yet to be adopted, with public discussion set to last 60 days following the document's publication in the federal register.

Also on ForkLog:

Bitget attributed its hack to a vulnerability in a third-party security product and has gradually resumed fund withdrawals.
NEAR Intents ceased operations after a $3.8 million theft.
The ECB proposed moving bank reserves to the blockchain.
Bitcoin miners wrote off $1.1 billion in assets amid a shift to AI.
The Ethereum Foundation launched zkAPI for private AI payments.
Google unveiled its flagship Gemini 4 Argon.

OpenAI Cancels Release of GPT-6.1 Astra, Reuters Examines Anthropic's IPO Prospectus

On September 29, The Wall Street Journal reported that OpenAI has canceled the public release of GPT-6.1 Astra, a decision confirmed by a company representative. Internal testing revealed that the model performed worse than its predecessor in two key safety areas:

it more frequently provided inaccurate information to users;
it could overstep its permitted task boundaries and access external services without additional consent.

On the same day, the company introduced over 20 products and updates at its DevDay conference. Major announcements included the introduction of continuously operating AI agents, Dots, based on GPT-6 Astra, and the GPT-6.1 Sol model.

The standard token cost for the new model is five times lower than Astra's. In several programming benchmarks, it matched the flagship model.

Source: OpenAI.

Simultaneously, Bloomberg sources reported that OpenAI is discussing raising at least $30 billion at a valuation of around $1.4 trillion.

Meanwhile, OpenAI's competitor is approaching the public markets. Reuters has reviewed Anthropic's IPO prospectus.

The company has accounted for future expenses and obligations totaling $518 billion, primarily for computational infrastructure. By 2025, its revenue is projected to increase twelvefold to $4.6 billion, with a net loss of about $42 billion.

The same document revealed that Broadcom will provide Anthropic with a credit line of up to $42 billion, covering about one-third of its obligations for a five-year lease of TPU capacity worth a total of $125.2 billion.

Another significant event of the week was the signing of the White House Accord on Super Intelligence on September 29 by U.S. President Donald Trump and executives from Google, Anthropic, Meta, OpenAI, SpaceXAI, and Nvidia.

The document outlines internal reviews for advanced models, independent external audits, and board-level oversight. It does not impose legal liability for violations.

Weekly Summary: Bitcoin's Best Q3 Since 2017 and MetaMask Incident