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Bitcoin ETFs Shed US$643 Million Amid Binance Hack Fallout
- US spot Bitcoin ETFs recorded US$643.2 million in Friday outflows, their largest daily withdrawals in over four months, reversing earlier weekly inflows.
- Bitcoin ETFs ended the week with US$202.4 million in net outflows, although Friday’s withdrawals represented less than 1% of total ETF assets.
- Ethereum ETFs recorded US$431.4 million in weekly net outflows, extending a five-day losing streak and bringing October withdrawals to US$1.61 billion.
- Crypto market sentiment shifted towards fear, with Bitcoin trading around US$78,398 as Binance resumed withdrawals following a US$6.3 billion hack.
US spot Bitcoin ETF investors ran for the exits last Friday following the largest-ever recorded crypto exchange hack. It marked the largest single-day outflow from US spot Bitcoin ETFs in more than four months.
Friday’s US$643.2 million (AU$916.3 million) in net outflows followed a similarly large US$635.6 million (AU$905.4 million) outflow on 22 October.
Several major funds recorded outflows, with BlackRock’s IBIT leading with US$233.7 million (AU$332.9 million). This reversed the US$440.8 million (AU$627.8 million) in net inflows recorded from Monday to Thursday. It leaves the US spot Bitcoin ETFs with combined weekly net outflows of US$202.4 million (AU$288.3 million) and US$239.9 million (AU$341.7 million) in net outflows since 14 October.
Despite the sell-off, Friday’s outflows accounted for less than 1% of the US$98.1 billion (AU$139.7 billion) held by spot Bitcoin ETFs. The funds also have no direct exposure to Binance, with their underlying Bitcoin held by separate custodians.
Read more: DTCC Launches Blockchain Service Covering Securities Worth US$30 Trillion
The US spot Ethereum ETFs have fared much worse. Friday’s US$155.7 million (AU$221.8 million) in net outflows extends a five-day streak and closes the week in the red, with US$431.4 million (AU$614.4 million) in net outflows.
Since 14 October, only two days saw net inflows, totalling US$19.3 million (AU$27.5 million), with a combined net outflow of US$911.6 million (AU$1.3 billion) over the period.
For October as a whole, Bitcoin ETFs recorded approximately US$516 million (AU$734.9 million) in net outflows, while Ethereum ETFs lost around US$1.6 billion (AU$2.3 billion).
Fear is Back
The outflows reflect broader market sentiment, with fear returning to the crypto market as the Fear and Greed Index stood at 37.
Bitcoin fell sharply following news of the Binance hack but has recovered somewhat since then. At the time of writing, BTC trades at US$78,398 (AU$111,660), while Ethereum changes hands for US$2,300 (AU$3,275).
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Following the US$6.3 billion (AU$8.9 billion) hack, Binance started allowing withdrawals in phases over the weekend.
Analytics firm Chainalysis and the FBI said North Korean hacker group TraderTraitor was likely behind the attack.
Read also: Australia’s Crypto Tax Reporting Consultation Closes
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.
