Bitcoin ETFs Lose $1 Billion as Midterms, Binance Hack Weigh on Sentiment

(Bloomberg) -- Investors pulled over $1 billion from US-listed Bitcoin funds over two trading sessions, as the record Binance hack and uncertainty around the US midterm elections remain an overhang on sentiment.

Most Read from Bloomberg

• Disney Plans Thousands of Layoffs, Targeting 20% Cost Savings

• Outback Steakhouse Franchisee Files Bankruptcy After Costs Swell

• When Will We Know Who's Won the Midterm Elections?

• Khamenei Empowers Talks as Trump Says Iran Deal Could Happen

• Anthropic Commits to $895 Billion in Spending as Mega-IPO Nears

The funds posted $1.04 billion in net outflows over Friday and Monday, according to data compiled by Bloomberg. BlackRock's iShares Bitcoin Trust accounted for $405 million of Monday's withdrawals.

Binance said Tuesday that the hackers behind the $6.3 billion heist used social engineering techniques including fake job interviews, as well as malicious software. The company, which attributed the Oct. 29 hack to North Korea, said the breach involved a "sophisticated, multi-stage campaign." Pyongyang has denied any involvement.

Bitcoin traded just above $77,000 on Tuesday, hovering around its 100-day moving average after slipping below the technical level earlier in the day. The token has struggled to mount a sustained rebound after last week's selloff, leaving traders focused on whether support holds as US voters head to the polls.

Derivatives positioning is also signaling caution. Deribit's put-call ratio over the past 24 hours stood at about 1.2, indicating stronger demand for downside protection.

"Over the past seven sessions, Bitcoin futures saw $2.7 billion of net aggressive selling while spot saw net buying," said Alice Liu, head of research at CoinMarketCap. "The leverage is leaving through the front door; the coins are staying."

Alex Kuptsikevich, analyst at FxPro, said the market "looks bleak enough to test the most important support levels of recent months," with little prospect of a sharp reversal without a catalyst.

The election adds another source of uncertainty. Donald Trump campaigned as a pro-crypto president with promises of creating a Strategic Bitcoin Reserve, and got the GENIUS Act passed last year establishing a federal framework for stablecoins. But the industry's next major priority, the Clarity Act, failed to advance in the Senate in September.

A Democratic sweep of both chambers could shift congressional attention away from industry-backed market-structure legislation and toward tougher oversight and investigations, potentially cooling sentiment around an asset class that has benefited from Washington's policy turn under Trump. Such an outcome could narrow the path for further crypto-friendly laws.