A Bitcoin Sidechain Lost 95% of its Reserves In Minutes

Hey Lantern Community,

A fresh oil shock from renewed US-Iran fighting and Bitcoin held its ground anyway. We also cover another DeFi hack that targeted a Bitcoin sidechain. Let's get into it.

Oil soars above $108

Over the weekend, US and Iranian forces exchanged strikes around the Strait of Hormuz, the first direct action between them since July. Iran-backed Houthi forces also hit the 400,000 barrel per day Jazan refinery.

Brent crude jumped to about $99.46 on Monday. Bitcoin took it in stride. It opened Tuesday near $79,100, dipped toward $78,400, and ended the week close to flat in a $76,600 to $81,700 range. The pattern from past shocks holds: crypto wobbles on the headline, then trades the macro that follows.

ETF money came back

Spot Bitcoin ETFs took in $987 million for the week ending September 5, a third straight week of inflows. The three-week run now totals $3.8 billion, the strongest stretch of 2026. ETF assets sit near $101 billion, though the year is still about $1 billion in the red.

Meanwhile, Ripple's RLUSD passed $2.3 billion in supply, and for the first time more of it lives on the XRP Ledger than on Ethereum (~51.7% vs 48.3%), reversing a ~$300M Ethereum lead a month ago.

A Bitcoin sidechain lost 95% of its reserves in minutes

On September 7, Blockstream's Liquid Network was drained of roughly 4,000 of the 4,200 Bitcoin held in its federation wallet, about $320 million. A bug in the sidechain's software let the attacker approve a withdrawal using invalid tokens. The attacker called it a white-hat move and started sending coins back within the hour. Blockstream paused the network and patched it.

Liquid is a bridge between chains, held together by a group of operators and one shared wallet. A loan at Lantern works nothing like that. Your collateral never touches a smart contract or a bridge. It sits in BitGo's insured cold storage, and if your loan goes underwater you get a 72-hour grace period and pay 0% liquidation fees.

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See if your bank is eligible: https://www.theclearinghouse.org/payment-systems/rtp/RTP-Participating-Financial-Institutions

Link an eligible account at payout and your approved funds arrive almost immediately. If your bank isn't on RTP yet, we fall back to standard ACH.

Next week brings FOMC, the CLARITY vote and the Fed decision inside five days. Against all of it, ETF demand is back and Bitcoin held up through a week that had plenty of reasons to drop.

If you are holding through it and want cash without selling, Bitcoin-backed loans at Lantern start at 8%, funded same-day including weekends.

Borrow against your crypto here: https://lantern.finance/borrow

Until next week,

The Lantern Team