Binance’s $6.4B Heist Sends ETF Money Sprinting for the Exit

U.S. spot Bitcoin ETFs recorded $643.2 million in outflows on Friday, their largest single-day decline in October, after attackers began draining roughly $6.4 billion from Binance at 4:05 p.m. ET Thursday. The session marked the first full trading day for ETF investors following the theft, which occurred after U.S. markets had closed. Thursday’s $17.2 million in inflows predated the breach and were erased by Friday’s selling, which reversed a four-day, $441 million inflow streak. Bitcoin ETFs ended the week down about $202 million and October down roughly $516 million, while cumulative net inflows since launch slipped to $57.4 billion and total net assets stood at $103.2 billion.

Ethereum and Solana ETFs also saw redemptions. Ethereum funds lost $155.7 million on Friday, extending a five-day outflow streak to about $431 million and pushing their October losses to roughly $1.61 billion. Solana ETFs shed $10.8 million on their fifth consecutive day of outflows, totaling about $72 million for the week; they recorded net inflows on only two days during October. Spot crypto ETFs hold underlying assets and trade on stock exchanges like ordinary shares, giving investors exposure through a regular brokerage account. Bitcoin funds have attracted $57.4 billion in net inflows since debuting in January 2024, while Ethereum funds have received $12.2 billion since launching that July. Daily issuer reports have made ETF flows a closely watched measure of investor sentiment.

Crypto markets initially absorbed the Binance breach with comparatively limited volatility. Bitcoin ($BTC) fell about 4% to roughly $76,400 on Friday as more than $1.3 billion in leveraged positions were liquidated. That decline was smaller than the nearly 11% plunge following a failed attack on Binance in 2018. Binance has pledged to cover all losses using company funds and an emergency reserve, while Tether and Circle froze more than $2.3 billion in stolen stablecoins. Some Wall Street firms encouraged clients to buy crypto-linked stocks on the weakness in markets.

By Saturday, Bitcoin had stabilized at about $77,520, up 0.5% over 24 hours but down 3.3% for the week. Ethereum ($ETH) traded near $2,251, down 3.9% for the week, while Solana traded near $96, down 4.5%. Total crypto market capitalization held at about $2.7 trillion as the breach triggered a cross-border law-enforcement investigation, additional stablecoin freezes and scrutiny of the world’s largest cryptocurrency exchange.