Bitcoin Drops on Binance Security Breach

Bitcoin fell to as low as $76,000 on Friday, hitting its lowest level since mid-September, as news of a major security breach at Binance, the world’s largest cryptocurrency exchange, intensified selling pressure. The exchange estimated the financial impact of the incident at around $6.3 billion, with approximately $3 billion in affected assets frozen on-chain through coordination with blockchain partners. Other digital assets, including Ether, Solana and XRP, also weakened. Broader risk aversion, fueled by concerns over AI-related spending and disappointing technology earnings, further weighed on sentiment. Meanwhile, around $1.3 billion in bullish crypto positions were liquidated over 24 hours, ahead of an $11 billion options expiry on Deribit. However, US-listed spot Bitcoin ETFs recorded $423.7 million in net inflows from Monday to Wednesday, pointing to renewed institutional demand.

Bitcoin fell to around $79,000 on Monday, hitting its lowest level since mid-September after a weekend sell-off intensified pressure on the cryptocurrency. The decline was fueled by weakening institutional demand, with US spot Bitcoin ETFs recording $635.6 million in net outflows on October 22, their largest single-day withdrawal since June, while roughly $815 million in leveraged crypto positions were liquidated over 24 hours, mostly long positions. Rising geopolitical tensions, elevated crude oil prices, and a broader risk-off mood fueled by concerns over AI-related spending also weighed on sentiment, while persistent inflation and uncertainty over the monetary policy outlook added to market caution. Investors are now turning their attention to the Federal Reserve’s October 27–28 meeting and the US September PCE inflation report due October 29, both of which could shape interest rate expectations and the outlook for risk assets.

Bitcoin held above $85,000 on Tuesday, hovering near its highest level since January while keeping its 7% gain over the past five days and about 35% increase over the past three months. Recent gains were partly supported by softer crude prices and renewed institutional demand, with US spot Bitcoin ETFs recording $433 million in net inflows on September 18, while corporate buying also increased as Strategy resumed Bitcoin purchases after a three-week pause. Regulatory developments also offered support, with the US SEC granting a five-year exemption to platforms using blockchain infrastructure to facilitate trading in tokenized stocks and other securities. The move came even as the US Senate last week halted further progress on the Clarity Act, which aims to establish clearer rules for digital assets. Meanwhile, traders are watching this week’s US-China summit for signs of progress toward easing trade tensions, which could further influence broader risk sentiment.