Crypto markets have lost an average of approximately 24 basis points of market capitalization per year to hacking incidents since 2018, according to DefiLlama data cited by ARK Invest crypto analyst Lorenzo Valente. This represents a loss rate roughly 14 times higher than the U.S. banking system, which loses about 1.7 basis points of deposits annually to fraud. Valente described hacking as a "hidden tax" on trading and storing value in cryptocurrency, comparing it to shoplifting where costs are ultimately priced in and borne by users. The analyst emphasized that every security breach weakens the competitiveness of crypto networks relative to traditional financial systems.