Fitch says limited impact of USD 6.3 billion Binance hack highlights Bitcoin market resilience - The Tribune

The attack began on October 29, with approximately USD 6.3 billion in digital assets stolen from Binance across multiple blockchains, potentially marking the largest cryptocurrency theft to date. The stolen assets reportedly included around 18,270 bitcoins, valued at approximately USD 1.5 billion at the time.

Binance temporarily halted trading and withdrawals following the attack before beginning to restore withdrawal services on November 1.

Limited Price Impact

Bitcoin fell around 6 per cent in the 10 hours after initial reports of the hack. However, its daily trading volume increased 67 per cent to around USD 40.9 billion, compared with an average of USD 27 billion over the preceding 30 days, according to CoinMarketCap data cited by Fitch.

The price movement was fairly contained, in our view, and was well below bitcoin's most severe declines.

Market Comparison

Fitch compared the reaction with earlier market shocks, including a 35 per cent fall during the Covid crisis in March 2020, a 14 per cent decline following the collapse of FTX in 2022 and a 21 per cent drop during the Bitstamp exchange hack in 2015.

The agency attributed the relatively limited disruption to a deeper and more diversified cryptocurrency trading ecosystem, which has reduced dependence on individual exchanges and helped maintain liquidity even when a major platform faces operational problems.

Implications for Securities

The development is significant for bitcoin-backed securities, where the ability to sell pledged assets quickly during price declines is important for limiting losses. Fitch said such products require adequate collateral coverage, short liquidation periods and the ability to execute transactions across multiple trading platforms.

The agency cautioned that the Binance attack also highlighted cybersecurity as an operational risk, as successful attacks can restrict access to assets and delay the liquidation of collateral. Fitch said the incident did not change its existing assessment of bitcoin-backed securities, but could provide further evidence of improving market resilience.