$643.3 Million Leaves U.S. Bitcoin Funds in Biggest Outflow Since June 25
Key Facts
U.S.-listed spot Bitcoin funds recorded net outflows of $643.3 million on Friday, October 30, their largest daily withdrawal since June 25, according to CoinDesk. The session followed the Binance hack late Thursday, and analysts at Derive attributed the withdrawals to the incident, whose impact was estimated at about $6.3 billion. Reuters said the funds lost $643 million that day, the largest daily outflow in October. Liquidations of leveraged positions also exceeded $1.3 billion, according to Reuters. The moves coincided with a sharp decline in the funds’ annual flows, though they did not turn year-to-date flows negative.
Before Friday’s session, the funds had year-to-date net inflows of just over $1 billion, according to CoinDesk. Friday’s outflow cut that total by 63.6%, but left it slightly positive. The comparison shows that the daily withdrawal was large enough to erase most of the cumulative annual gains through October 29, but not all of them. BlackRock’s IBIT recorded the largest outflow among the products, at $233.70 million. Fidelity’s FBTC followed, with outflows of $201.4 million, according to CoinDesk.
Friday was the first trading session after the Binance hack, which the Associated Press said an initial investigation linked to a possible breach of a DevOps engineer’s laptop. The laptop may have been used to access a service container and send unauthorized withdrawal transactions, the news agency said. Binance said it had found no evidence that private wallet keys were leaked. The company estimated the incident’s total impact at about $6.3 billion and said it had worked with network partners to freeze assets linked to it. About $3 billion in affected assets had been frozen on-chain, according to an update cited by the news agency on October 30.
The incident also affected Bitcoin trading, with the cryptocurrency falling 3.2% late Thursday to below $79,000, according to the Associated Press. It hit a six-week low on Friday, then recovered slightly over the weekend to trade above $78,000 on Monday, November 2, according to Reuters. EL7 data show BTCUSD closed at $77,368.77 on October 30 and at $77,537.95 on November 2. In Friday’s session, the price pressure coincided with fund outflows and leveraged-position liquidations. Ari Redbord of TRM Labs described the incident as concerning for conservative institutional investors, saying: "I understand why this is concerning to conservative institutional investors."
Binance customers withdrew $3.64 billion, equivalent to 2.1% of the platform’s assets, as service resumed after the hack, Reuters reported. The platform said net flows count what customers withdrew and deposited after the incident. These figures show the scale of recorded movements after the incident as Binance continues restoring withdrawals in stages.
Binance said the first phase of withdrawal resumption began on Sunday, November 1, between 06:00 and 09:00 UTC, with processing potentially delayed temporarily by network congestion. The company said it had covered about 95% of the affected amount, up from 90% in its previous update. It added that the remaining 5% comprised less liquid tokens outside the top 10, making them take longer to purchase. In an update published on November 2, Binance said the full proof of reserves for the snapshot dated October 31 had been completed. The company plans to take another snapshot, covering additional tokens, on November 4, then generate an updated zero-knowledge proof, estimated to take 40 to 50 hours.