Their worst session in 6 months: with more than 650 million capital outflows on Wall Street, bitcoin spot ETFs suffer after the Binance hack

Beyond the macroeconomic context, the massive hack of the crypto giant Binance also has an impact on the cryptocurrency market. A few hours after the incident, bitcoin, the first crypto on the market, fell below $80,000.

It brought down the market, in particular ether and BNB, the native cryptocurrency of the Binance blockchain. As a reminder, last Thursday, the world's leading crypto exchange suffered a major cyberattack, with losses of more than $6.3 billion. To date, $3 billion has been frozen by several stablecoin issuers, including Tether (for $1.6 billion) and Circle (for $823 million).

These cryptos can thus be easily returned to Binance in order to reimburse its customers. However, there remains $3.3 billion in crypto still in the hands of hackers, to be recovered. No “capitulation” A context which has seriously cooled investors on Wall Street.

In fact, spot bitcoin ETFs saw net outflows of $643 million on Thursday after the hack, the highest since late June. Negative flows from these products have a downward impact on the price of bitcoin. At 10:30 a.m. this Tuesday, November 3, bitcoin is trading around 76.

490 dollars on CoinMarketCap, down 4% over one week. “In terms of scale, the $643 million capital outflow still represents less than 1% of spot bitcoin ETF assets. So this was simply a de-risking day, not a capitulation or loss of institutional confidence,” Rick Maeda, head of markets at Laevitas, told The Block.

As a reminder, on January 10, 2024, the American stock market watchdog (the SEC) authorized 11 spot bitcoin ETFs on Wall Street. An ETF (or Exchange Traded Funds) is an index fund trading on a stock exchange which follows the evolution of a stock market index (or one or more financial or physical assets, such as gold) by replicating the rise or fall in the price of this index (or these assets). This type of product allows American investors to gain exposure to the queen of cryptocurrencies without going through traditional crypto trading platforms.

To date, spot bitcoin ETFs are worth more than $98 billion. The cooling of investors was also illustrated by spot ether ETFs, which recorded net outflows of $156 million, the highest since the beginning of October.

Machine-translated from French