U.S. Spot Bitcoin ETFs Suffer $1.04 Billion of Outflows in Two Days on Binance Hack, Midterm Uncertainty
More than $1 billion was pulled from U.S. spot Bitcoin exchange-traded funds over two days.Bloomberg reported on Nov. 3 that U.S.-listed spot Bitcoin ETFs recorded net outflows of $1.04 billion over two trading sessions on Oct. 30 and Nov. 2. On Nov. 2 alone, BlackRock's iShares Bitcoin Trust saw about $405 million exit the fund.The heavy withdrawals were attributed to the Binance hack and uncertainty surrounding the U.S. midterm elections. Investor sentiment weakened after about $6.3 billion of crypto assets was stolen from Binance on Oct. 29. Concerns over possible policy shifts depending on the election outcome added to selling pressure.Bitcoin traded around $77,000 that day, hovering near its 100-day moving average. Derivatives markets also showed rising demand for downside protection. On Deribit, the crypto options exchange, the put-to-call ratio over the past 24 hours was about 1.2, signaling relatively stronger demand for put options to hedge against price declines.Alice Liu, head of research at CoinMarketCap, said aggressive net selling in Bitcoin futures totaled $2.7 billion over the past seven trading days, while spot markets still showed net buying. That suggests leveraged positions are being reduced even as spot holdings are being maintained. Alex Kuptsikevich, an analyst at FxPro, said Bitcoin could test a key support level formed over the past several months unless a fresh bullish catalyst emerges.The U.S. midterm election result is another key variable. The Trump administration has pursued crypto-friendly policies including a strategic Bitcoin reserve and a regulatory framework for stablecoins. But the CLARITY Act, which addresses market-structure regulation, failed to make progress in the Senate in September. If Democrats win control of both chambers of Congress, the focus could shift from legislation to oversight and investigations.Russell Thompson, chief investment officer at Hilbert Group, said he does not believe a sweeping Democratic victory has been fully priced into Bitcoin. By contrast, Re7 Research said risk appetite for digital assets could recover after the election removes a major source of uncertainty.The market is also watching Binance's response to the hack. Binance said North Korea was behind the attack and that it involved fake job interviews and malicious software. North Korea has denied the allegations. Binance said it is gradually resuming withdrawals and has recovered about 95% of the affected assets, but the market continues to monitor whether withdrawal restrictions and tighter liquidity will persist.