From CryptoPotato · By Wayne Jones
With Bitcoin trading at around $78,000 after last week’s $6.3 billion Binance hack, the market is facing new questions about how institutional demand, exchange liquidity, and the movement of stolen funds could affect it going forward.
According to a market watcher, the next phase may depend less on the scale of the breach than on whether these pressures begin to influence wider market conditions.
ETF Outflows and Binance Withdrawals Put Market Liquidity to the Test
CryptosRus identified three areas worth watching in a November 2 post, namely spot Bitcoin and Ethereum ETF flows, exchange withdrawals, and any attempts by the Binance hacker to convert and move the stolen loot.
Institutional demand is already showing signs of weakness, with BTC and ETH ETFs, respectively, recording $202.59 million and $431.53 million in outflows last week, with the Bitcoin funds alone in the red for over $643 million on Friday, their largest one-day outflow since June 25, when almost $700 million left them. Meanwhile, Ethereum saw five straight days of redemption, the biggest, nearly $156 million out, also happening on Friday.
According to CryptosRus, ETF buyers had supplied the structural support for the industry while it absorbed the shock of the Binance attack, but with that support seemingly fading, they believe spot markets must now carry more of that recovery.
“What confirms the risk: continued net redemptions while Bitcoin fails to build on its rebound,” noted the account.
Looking at exchange withdrawals, Binance reopened the services less than 72 hours after falling victim to the biggest crypto theft in history, with users reportedly taking out about $4.65 billion and depositing slightly more than $1 billion, which runs to roughly $3.64 billion in net outflows. However, while the amount is substantial, it comes to just slightly more than 2% of the assets Binance currently holds, and, importantly, the exit has not been disorderly.
“Users moving funds away from an exchange after a record hack is rational risk management,” CryptosRus wrote. “It becomes a systemic problem only if withdrawals accelerate, settlement deteriorates, stablecoin liquidity contracts, or stress spreads to other venues.”
Hacker Transfers and Bitcoin’s Recovery Under Watch
The third concern is what happens when the Binance attacker moves the stolen stash. According to on-chain investigators, the entity responsible for the hack moved about $242 million through THORChain, Relay, Chainflip, and Symbiosis.
Furthermore, a suspected exploit wallet transferred 486,970 SOL, worth another $46.4 million, and swapped it for BTC via Relay, with CryptosRus suggesting that such transactions could create localized pressure, while cross-chain transfers may make recovering the assets that much harder.