Bitcoin ETFs Lose $643 Million as Binance Hack Triggers Investor Withdrawals

U.S. spot Bitcoin exchange-traded funds recorded $643.3 million in net outflows as investors reacted to Binance’s $6.3 billion security breach. According to SoSoValue data, Friday’s withdrawals marked the largest single-day outflow since June 25, ending four months without comparable losses.

The withdrawals followed a major attack on Binance, where hackers reportedly stole approximately $6.3 billion from the exchange’s cryptocurrency wallets. Bitcoin ETFs subsequently ended the week with $202.6 million in net outflows, reflecting weaker investor sentiment following the incident.

Ethereum investment products also experienced substantial selling pressure, with spot Ether ETFs recording $155.9 million in withdrawals during Friday’s session. Their weekly net outflows reached $431.5 million, indicating that investors reduced exposure across both major cryptocurrency investment products.

The security breach also prompted significant customer withdrawals from Binance as the exchange restored access to affected cryptocurrency networks. These developments placed additional pressure on market confidence while investors assessed the consequences of the reported attack.

Also Read: Alert: Binance Hacker Moves 80 Million XRP Worth $101M to Mystery Wallets

Binance Restores Bitcoin, XRP, and Ethereum Withdrawals Following $6.3 Billion Hack

Binance has restored cryptocurrency withdrawals across 15 blockchain networks following the $6.3 billion security breach that unsettled cryptocurrency investors. The supported networks include Bitcoin, Ethereum, XRP Ledger, Solana, BNB Smart Chain, Tron, and Dogecoin, alongside other major blockchains.

Additionally, the exchange has resumed withdrawals across Avalanche, Sui, Polygon, Arbitrum, and Zcash, including major stablecoins on supported networks. Binance prioritized cryptocurrencies with substantial customer demand while conducting security checks before reopening withdrawal services.

The exchange also reported recovering or restoring approximately 95% of affected assets, improving from its earlier 90% coverage estimate. Binance committed more than $6.34 billion in company funds to cover losses and maintain customer asset backing.

Meanwhile, customers have resumed withdrawing funds, with Binance recording approximately $3.64 billion in net outflows within nine and a half hours. The substantial exchange withdrawals followed the security breach, which also coincided with $643.3 million in Bitcoin ETF outflows.

Bitcoin Price Recovers Despite ETF Outflows as Analysts Assess Market Confidence

Bitcoin showed signs of recovery despite substantial institutional withdrawals, gaining approximately 1% to trade at $78,491 late Sunday. Ethereum also increased 1.3% to $2,296, suggesting that cryptocurrency prices had stabilized following the initial market disruption.

According to Laevitas head of markets Rick Maeda, the Bitcoin ETF withdrawals represented less than 1% of total fund assets. U.S. spot Bitcoin ETFs held approximately $98.14 billion in net assets, placing Friday’s withdrawals within a broader institutional context.

Maeda attributed the withdrawals to investors reducing exposure rather than abandoning cryptocurrency investment products following the Binance security incident. The analyst also expects moderate withdrawals or stabilization while investors assess the exchange’s recovery progress.

Similarly, Zeus Research analyst Dominick John identified improved market stability and restored liquidity as important conditions for recovering ETF demand. The Crypto Fear and Greed Index registered 37 on Sunday, reflecting cautious sentiment across the cryptocurrency market.

ViaBTC chief analyst Jeff Ko also identified the upcoming U.S. midterm elections as another factor influencing cryptocurrency market expectations. Potential changes in congressional leadership could affect the progress of cryptocurrency market structure legislation. Bitcoin ETF withdrawals remain a significant indicator of institutional caution following Binance’s security breach, despite the subsequent recovery in cryptocurrency prices.