The withdrawals marked the largest daily outflow for Bitcoin ETFs during October and reversed four consecutive trading sessions of inflows. The selling occurred during the first full US market session after hackers stole approximately $6.3 billion in cryptocurrencies from Binance, triggering concerns about exchange security and potential further losses.
Data compiled by Farside Investors showed that five major Bitcoin funds experienced redemptions, while seven recorded no net flows. BlackRock’s iShares Bitcoin Trust registered the largest withdrawal at $233.7 million, followed by Fidelity’s Wise Origin Bitcoin Fund with approximately $201 million.
ARK 21Shares Bitcoin ETF recorded outflows of $129.5 million, while Grayscale Bitcoin Trust lost $53.3 million and Bitwise Bitcoin ETF shed $25.7 million. The distribution indicated selling across several prominent investment products rather than withdrawals concentrated in a single fund.
Friday’s redemptions erased approximately $440.8 million accumulated during the preceding four sessions, leaving the funds with net weekly withdrawals of roughly $202.4 million. October ended with approximately $516 million in net outflows, reflecting a reversal in investment demand.
The timing connected the withdrawals with heightened anxiety following the Binance attack, although fund-flow statistics do not establish individual investors’ motivations. Broader weakness in cryptocurrency prices and technology shares also accompanied the selling, making it difficult to isolate the security breach as the sole explanation.
The attack began after US equity markets closed on Thursday, meaning Friday provided the first complete trading session for ETF investors to respond. Thursday’s $17.2 million net inflow had therefore occurred before the full implications of the breach became apparent.
Binance subsequently resumed withdrawals in phases after suspending services while investigating the theft. The exchange said it had replaced approximately 95% of the stolen assets using its own resources and would absorb the financial losses rather than pass them directly to customers.
The company placed the value of stolen cryptocurrencies at approximately $6.3 billion. It said replacement of the remaining assets could take longer because some tokens were comparatively illiquid, complicating efforts to restore affected balances.
Customer withdrawals from Binance also accelerated after the breach. The exchange disclosed net withdrawals of approximately $3.64 billion, representing around 2.1% of its assets, while maintaining that substantial deposits continued and withdrawal activity was stabilising.
The Federal Bureau of Investigation attributed the theft to TraderTraitor, a hacking operation associated with North Korea. Investigators said stolen cryptocurrencies were being converted into ether, raising concerns about attempts to move the proceeds through multiple digital asset transactions.
President Donald Trump, however, expressed uncertainty about North Korea’s involvement, leaving the attribution contested at the political level despite the FBI’s assessment.
Cryptocurrency market losses extended beyond Bitcoin investment products. US spot Ethereum ETFs recorded approximately $155.7 million in net withdrawals on Friday, extending their losing streak to five consecutive sessions.
Ethereum funds registered approximately $431 million in withdrawals over the five-session period, while their October net outflows reached roughly $1.61 billion. The sustained selling suggested that pressure on institutional cryptocurrency investment was not confined to Bitcoin.
Solana investment funds also experienced withdrawals of approximately $10.8 million on Friday, adding to weakness across cryptocurrency-linked exchange-traded products.
Bitcoin traded around $77,000 during the weekend following Friday’s decline, after falling towards $76,000 during the preceding session. The price movements reflected heightened volatility as traders reassessed exposure to digital assets and the implications of the exchange breach.
Market participants also faced substantial liquidations of leveraged cryptocurrency positions. Such liquidations occur when exchanges automatically close trades whose collateral no longer satisfies margin requirements, potentially accelerating price movements during periods of selling.
ETF redemptions nevertheless represent a different mechanism from forced liquidations. Net outflows measure the difference between fund creations and redemptions, rather than the total value of shares traded between investors on stock exchanges.
The distinction matters because heavy secondary-market trading does not necessarily produce equivalent withdrawals from an ETF’s underlying assets.
BlackRock’s Bitcoin fund had attracted approximately $410.6 million during the four positive sessions preceding Friday, accounting for most of the sector’s inflows during that period.
The final session’s reversal left the fund with approximately $176.9 million in net inflows for the week, despite its substantial Friday withdrawals.
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