Bitcoin sank below $77,000 for the first time in more than a month, deepening a selloff after Binance Holdings revealed a record hack that rattled the crypto industry and renewed questions about the security of customer assets — even at the world’s largest digital-asset exchange.
The original cryptocurrency declined as much as 3.1% on Friday to fall as low as $76,300, though it slightly recovered in mid-afternoon trading in New York. Other tokens, including some that were impacted by the security breach, also fell. Binance’s BNB token has declined about 7% since Wednesday to around $700.
“The broader crypto market was already leaning bearish, which is why the selloff spread so quickly across the board,” said Jeff Ko, chief analyst at ViaBTC. He added that Binance can absorb the losses.
The breach — in which attackers attempted to siphon off over $6 billion — is the largest crypto theft on record, and delivers another blow to an industry that has spent years trying to shed its reputation for hacks, scams and exchange failures. It’s also putting Binance’s own defenses under scrutiny by raising questions about how an exchange of its size — with more than $135 billion of assets on its platform — could have succumbed to a breach of such magnitude.
Binance on Friday said that it has reserved $6.34 billion of company funds in the wake of the incident. Meanwhile, the Federal Bureau of Investigation told Bloomberg News on Friday that it was aware of the Binance incident and that it is coordinating with its partners “to understand the scope of the activity, evaluate potential impacts, and coordinate appropriate investigative steps.” Secret Service investigators are also “working around the clock” with the private sector to recover stolen funds, a spokesperson said.
Also Read: Binance confirms crypto heist, biggest in history, but no one’s sure what broke.
“Crypto is a target, no doubt, for bad actors, and cybersecurity everywhere is being tested,” said Haseeb Qureshi, managing partner at venture fund Dragonfly. “It’s staggering to see the impact of that at the largest exchange in the world.”
Bitcoin and other tokens were already under pressure this week with broader macro forces weighing on the market. The S&P 500 was down roughly 2% in mid-afternoon trading in New York following disappointing earnings reports from the likes of Amazon.com Inc. and Intel Corp. The tech-heavy Nasdaq 100 fell nearly 4%.
Binance moved quickly to suspend withdrawals after discovering the exploit and pledged to cover any losses, which could be substantial in what is shaping up as the largest crypto hack on record.
Meanwhile, shortly after news of the hack broke, the two biggest stablecoin issuers said they took steps to freeze missing currency. Paolo Ardoino, the chief executive officer of Tether, said in an X post that it froze more than $1.5 billion of the stablecoin “related to a potential Binance exchange hack.” Jeremy Allaire, who runs Circle Internet Group Inc., said $800 million of its coin had been frozen amid “reports of a potential exploit involving Binance.”
The speed with which stablecoin issuers and other firms moved to freeze assets was “a pretty impressive feat given that the pace with which this whole event unfolded,” said Eric Jardine, head of research at Chainalysis.
For Will Tamplin, senior analyst at Fairlead Strategies, Bitcoin could retreat further in the coming days “as it digests this event”, though this week represents “an opportunity to add exposure.”
Yet Matt Maley, chief market strategist at Miller Tabak Co., sees it differently: “The scenario that raises the biggest concerns is that this episode could cause institutional investors to step back from the asset class,” he said. “Their future demand is key for the future of crypto — but if there are concerns about operational security or counterparty risk, they are likely to back off.”
Bitcoin had hovered around $80,000 for much of the week. However, a Friday expiry of $11 billion worth of options on the platform Deribit loomed over the market, adding to the broader risk-off mood. About $1.3 billion worth of bullish positions on cryptocurrencies were wiped out in a 24-hour period, according to Coinglass data.
“The downside is the series of body blows to crypto infrastructure over recent months could dissuade market entrants,” said Noelle Acheson, who writes the Crypto is Macro Now newsletter. “We’ve seen that self-custody isn’t safe, exchange custody isn’t safe, and the swarm of AI bot attacks on security in all online applications is going to make everyone even more nervous.”
The upside, however, is that “every new security breach does make security stronger,” she added.