Bitcoin ETF Investors Head for the Exits After Record Binance Hack

The first real test of how ETF investors would react to the largest crypto hack in history came back red.

U.S. spot Bitcoin ETFs shed $643.2 million on Friday, according to Decrypt’s ETF tracker, their biggest single-day outflow of October. It was the funds’ first full session since attackers began draining roughly $6.4 billion from Binance at 4:05 p.m. ET Thursday, after U.S. markets had closed. Thursday’s $17.2 million in inflows predated the theft.

The selling erased a four-day, $441 million inflow run, leaving the funds down about $202 million for the week and roughly $516 million for October. Cumulative net inflows since launch slipped to $57.4 billion, with total net assets at $103.2 billion.

Ethereum and Solana ETFs fared worse relative to their size. Ethereum funds lost $155.7 million on Friday, extending a five-day outflow streak to about $431 million and pushing October losses to roughly $1.61 billion. Solana ETFs shed $10.8 million, their fifth straight day of outflows, totaling about $72 million for the week. They logged net inflows on just two days all month.

Spot crypto ETFs hold the underlying asset, such as Bitcoin or Ethereum, and trade on stock exchanges like ordinary shares, giving investors exposure through a regular brokerage account.

Bitcoin funds have drawn $57.4 billion in net inflows since debuting in January 2024, and Ethereum funds have taken in $12.2 billion since launching that July. Because issuers report flows daily and much of the money comes from institutions and financial advisers, the figures have become a closely watched gauge of investor sentiment.

Crypto markets initially appeared to take the Binance hack largely in stride, considering the scale of the theft. Bitcoin fell about 4% to roughly $76,400 on Friday, and more than $1.3 billion in leveraged positions were liquidated. It’s a sharp drop, but a far smaller one than the nearly 11% plunge after a failed attack on Binance in 2018.

Binance has pledged to cover all losses with company funds and an emergency reserve, while Tether and Circle froze more than $2.3 billion in stolen stablecoins. Some Wall Street firms even urged clients to buy crypto-linked stocks on the potential weakness in markets.

By Saturday, Bitcoin had steadied at about $77,520, up 0.5% over 24 hours but down 3.3% on the week. Ethereum traded near $2,251, down 3.9% for the week, and Solana near $96, down 4.5%. Total crypto market cap held at about $2.7 trillion.

Macro headwinds remain in play. The Federal Reserve held rates at 3.75% to 4% on Wednesday, but two officials voted for a hike, and traders had priced odds above 70% for an increase in December.