U.S. Bitcoin ETFs lost $643.2 million following the Binance hack, marking a significant outflow as investors reacted to the incident.
Significant Outflows Mark Bitcoin ETF Response to Hack
In the wake of the recent $6.4 billion hack of Binance, U.S. spot Bitcoin ETFs faced a notable decline, shedding $643.2 million on Friday. This drop marks the largest single-day outflow for October and comes after the incident, which occurred after market hours on Thursday.
The previous day had seen a modest inflow of $17.2 million, but the hack prompted a swift change in sentiment, erasing a four-day inflow streak totaling $441 million. Overall, Bitcoin ETFs are down approximately $202 million for the week and $516 million for the month of October, with total net assets now at $103.2 billion.
Ethereum ETFs also struggled, losing $155.7 million on Friday and extending their outflow streak to five days, which totals around $431 million. The overall losses for Ethereum funds in October have reached approximately $1.61 billion. Meanwhile, Solana ETFs reported losses of $10.8 million, marking their fifth consecutive day of outflows and totaling about $72 million for the week.
Despite the scale of the Binance hack, the crypto markets initially appeared resilient. Bitcoin's price fell about 4% to around $76,400, with over $1.3 billion in leveraged positions liquidated. However, this decline is less severe compared to the nearly 11% drop following a failed attack on Binance in 2018. By Saturday, Bitcoin had rebounded slightly to approximately $77,520.
Binance has committed to covering all losses from the hack through its reserves, while Tether and Circle have frozen over $2.3 billion in stolen stablecoins. Market analysts suggest that some Wall Street firms are advising clients to consider buying crypto-related stocks due to potential market weaknesses.
Looking ahead, macroeconomic factors continue to influence market sentiment. The Federal Reserve maintained its interest rates between 3.75% and 4% but indicated a potential hike could be on the horizon, with traders pricing in over a 70% chance for an increase in December. Additionally, predictions regarding Ethereum and Solana have turned bearish, with analysts projecting a greater likelihood of further declines for both cryptocurrencies.
