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Bitcoin Briefly Dips Below US$77K as Binance Hack Rattles Markets
- Bitcoin fell from US$81,771 to US$76,418 within hours before recovering to US$78,488, while the broader crypto market lost 2.8%.
- Chainalysis estimated at least US$5.9 billion was stolen in the Binance hack, although the exchange maintained that user funds were safe.
- Analysts warned that disrupted exchange transfers, wider trading spreads and macroeconomic uncertainty could prolong the crypto sell-off.
- US spot Bitcoin ETFs recorded US$440.8 million in net inflows over four consecutive days, led by BlackRock’s IBIT with US$410.6 million.
Following yesterday’s dip below US$80K (AU$113.7K), Bitcoin rallied in the early hours of Friday to US$81,771 (AU$116,227), but the gains didn’t last. Within hours, BTC dropped a whopping 6.55% to US$76,418 (AU$108,618) by lunchtime Australian time. At the time of writing, it had somewhat recovered to US$78,488 (AU$111,565).
The wider crypto market was affected, with a market cap drop of 2.8% to just US$2.59 trillion (AU$3.68 trillion). Ethereum (-3.56%), BNB (-5.11%) and XRP (-3.2%) were also down.
Interestingly, Hyperliquid bucked the wider market trend and even gained 17% on the daily chart. HYPE’s catalyst seems to be Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, which has announced a partnership with TradeXYZ to develop US-regulated perpetual futures markets using Hyperliquid infrastructure.
Related: VanEck Launches Diversified ETF With Bitcoin Allocation of Up to 5%
Meanwhile, the broader market sell-off has been fuelled by a large-scale Binance hack – widely described as the largest in crypto history – which is still being investigated. According to Chainalysis, at least US$5.9 billion (AU$8.4 billion) in digital assets were stolen, but the exchange said user funds are safe.
Analysts Warn of Further Downside
Tim Sun, senior researcher at HashKey Group, warned that disruptions to Binance’s deposit and withdrawal services could make it harder for market makers to move funds between exchanges. GSR’s Aravind Srinivasan also said Bitcoin trading spreads on Binance had briefly widened to five times their usual level.
Geoffrey Kendrick, Global Head of Digital Assets Research at Standard Chartered, warned in an email that the crypto sell-off could continue.
I suspect the negative price action still has some way to go. Only after assets are unfrozen and more detail of the hack emerges will we find a new base.
Geoffrey Kendrick, Global Head of Digital Assets Research at Standard Chartered Zooming out, the larger picture still looks rather grim. The US-Iran conflict remains on investors’ minds, and a hawkish Fed could raise rates once more this year. Meanwhile, tech stocks have been spooking markets after Alphabet reported disappointing earnings and Samsung shares fell despite record profits.
On the ETF front, it’s promising news though. The US spot Bitcoin ETFs have recorded four consecutive days of net inflows with a total of US$440.8 million (AU$626.7 million). BlackRock’s IBIT alone took in US$410.6 million (AU$583.7 million), while Fidelity’s FBTC took in US$35 million (AU$49.8 million) over that time and Bitwise’s BITB US$10.1 million (AU$14.36 million).
Read also: US Treasury Secretary Puts Crypto Alongside AI and Chips in Competition With China
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Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
