Bitcoin, Ethereum, and XRP Drop Amid $6.3 Billion Binance Hack

Bitcoin, Ether, XRP, and other major cryptocurrencies suffered significant losses following reports of a $6.3 billion hack on Binance, leading to over $1.5 billion in forced liquidations of leveraged positions in the cryptocurrency market. During the sell-off, the price of Bitcoin fell below $77,000, Ether dropped below $2,200, and XRP, Solana, and other altcoins also experienced substantial losses. Over 24 hours, more than $1.5 billion in leveraged positions were closed, with the majority of losses borne by market participants betting on price increases. The decline began after news of the Binance hack, which temporarily suspended withdrawals and announced it would cover client losses.

Losses and Partial Recovery

Late Thursday evening, Bitcoin was trading around $76,664, down approximately 4.5% over 24 hours. Ether fell by 5.2% to around $2,190, XRP by 7% to $1.21. BNB, the cryptocurrency associated with Binance, dropped by 7.1% to approximately $698.65. Solana fell to $95, and Dogecoin was trading around $0.075. By Friday morning, Bitcoin had returned to around $78,500, and Ether to around $2,240, but both remained below pre-sell-off levels.

Forced Liquidations

According to CoinGlass, approximately 246,482 market participants' positions were closed over 24 hours. Long positions accounted for about $1.34 billion of the $1.55 billion closed during the reporting period. Bitcoin accounted for approximately $499 million in liquidations, Ether for $358 million, Solana for about $82.6 million, XRP for $38.1 million, and Dogecoin for $18.6 million. Binance processed approximately $754.6 million in liquidations, nearly half of the market at that time. It was followed by Hyperliquid with $251.4 million and Bybit with $186.5 million. The largest single liquidation was about $11 million on a long Bitcoin position on Binance. Forced liquidation occurs when a leveraged participant no longer has sufficient collateral to maintain their position; the exchange automatically closes the trade, which can exacerbate sell-offs during falling prices. Later, some participants betting on further declines suffered losses due to recovery: short positions accounted for $57.3 million of the $85 million in liquidations during a single four-hour period on Friday.

Binance Hack Intensified Pressure

Sales intensified after Binance reported a major security breach on Thursday. Binance stated that about $3 billion of affected assets were frozen with the assistance of industry partners while investigations continued. Analytical firms TRM Labs and Elliptic traced the attack to a hacker group. At the time of the initial reports, Binance did not publicly name the attackers. The incident affected not only Bitcoin and Ether; Uniswap and Aave fell by approximately 11% on Thursday as the attacker exchanged stolen assets. The ENA token of the Ethena project came under pressure following transactions linked to the attacker, although it later recovered along with several other cryptocurrencies. Tech stocks were also under pressure during the same period: Nasdaq 100 futures fell by 2.3% following Amazon's capital expenditure forecast increase, and Intel shares declined after a disappointing forecast. The weakness in tech stocks coincided with losses in crypto-related stocks, including Strategy and Robinhood.

Market Reduces Risk

Derivative data showed a 3% decrease in open positions on cryptocurrency futures to approximately $136.3 billion, while trading volume increased by 74% to $346.1 billion. Open positions on Solana decreased by 13.3% as the price fell by 3.3%. For Ether, open positions decreased by 5.8%, and for Bitcoin by 1.4%.