Bitcoin Holds Up After Binance’s $6.3 Billion Hack, but Market Unease Persists
Summary
- The world’s largest exchange, Binance, was hit by a hack worth $6.3 billion, but Bitcoin remained relatively stable, falling only about 4%.
- Market participants said Binance’s pledge to provide full reimbursement for users and its Bitcoin purchases helped support prices.
- Still, demand for short-term downside protection is rising and concern over further hacks is building, with Bitcoin having fallen about 14% over a week after the earlier Bybit hack.
Forecast Trend Report by Period
Bitcoin is holding relatively steady even after Binance, the world’s largest cryptocurrency exchange, was hit by a $6.3 billion hack. Even so, concern is building in the market over the risk of further breaches.
Bitcoin traded at around $78,300 as of 1 p.m. Singapore time on Nov. 2, Bloomberg reported. That left the token down only about 4% from its peak last week, just before Binance disclosed the hack.
Market participants say Binance’s swift response helped limit Bitcoin’s decline. The exchange said it would fully reimburse users for any losses tied to the breach. “The fact that Bitcoin held up over the weekend shows the market trusts Binance’s announcement,” Caroline Mauron, co-founder of Orbit Markets, said. The market appears confident that Binance has enough funds to cover the losses, she added.
Binance’s Bitcoin purchases to compensate users are also helping support prices, according to Sean McNulty, a derivatives trader at market maker AQC Tech. Still, traders see the incident as only part of a broader threat, especially given the growing use of artificial intelligence in cyberattacks. “If Binance, the world’s largest exchange, can be hacked, then nobody is safe,” he said.
Demand for short-term downside protection is also rising. According to options data from crypto derivatives platform Deribit, the one-day 25-delta put skew — a gauge of how much more expensive downside protection is than bullish bets — rose about 1 percentage point in 24 hours to 6.37.
“The market is treating this as an operational shock rather than a systemic one,” Kelly Ye, head of research at trading firm Talos, said. Binance order-book depth fell 25% to 30%, but buying interest returned within hours. “It looks nothing like 2022, when confidence across the broader market collapsed.”
When FTX imploded in 2022, Bitcoin plunged 19% in three days.
The FBI has blamed both the Binance hack and last year’s Bybit hack, which caused about $1.5 billion in losses, on North Korean hacking group TraderTraitor. Bitcoin’s initial reaction to the Bybit breach was also limited, but the token went on to fall about 14% over the following week.
