TLDR
- Crypto stocks fell on Oct. 30 after a $6.3 billion security breach at Binance, with Coinbase down as much as 12.54%.
- Binance reserved more than $6.34 billion of company funds and says about $3 billion of the stolen assets are frozen.
- Analysts at Cantor Fitzgerald, TD Cowen and Compass Point said the hack is unlikely to derail the crypto market.
- Coinbase reported third-quarter transaction revenue of $590.2 million, down 44% from a year earlier.
- Bitcoin traded near $77,454, down about 5% on the day.
Crypto stocks fell sharply on Oct. 30 after a $6.3 billion security breach at Binance. Coinbase lost as much as 12.54% during the session.
Riot Platforms, Hut 8 and Robinhood each lost more than 8%. Robinhood traded at $84.17 after touching a low of $82.37.
Coinbase shares traded at $140.46, down $20.13 from the previous close. The stock opened at $147.43 and touched a low of $136.93.
Strategy fell to $124.34 before recovering to $132.80, a drop of 6.23% on the day. Mining companies IREN, MARA and CleanSpark also lost ground.
US stock funds fell too. The Invesco QQQ Trust lost 2.83%, and the SPDR S&P 500 ETF Trust was down 1.36%.
What Binance Said About the Hack
The breach happened on Oct. 29, according to Binance. The exchange pledged to cover customer losses.
In its Oct. 30 update, Binance said it had reserved more than $6.34 billion of company funds. That includes $5 billion already held in the affected cryptocurrencies.
About $3 billion of the stolen funds have been frozen, Binance said. Tether froze more than $1.5 billion, Circle blocked $800 million and Ripple froze about $200 million. Frozen funds have not been recovered.
Binance has started buying back stolen altcoins on exchanges and over-the-counter desks. Co-founder Yi He said its holdings include Bitcoin and Ethereum. Some purchases could take longer because of limited token liquidity.
Analyst Views and Company Filings
Analysts at Cantor Fitzgerald, TD Cowen and Compass Point said the hack is unlikely to derail the crypto market. Cantor analyst Ramsey El-Assal said, “We would be buyers on weakness.”
TD Cowen’s Lance Vitanza said the attack exposed weaknesses at Binance, not in Bitcoin technology. The attack appears to have targeted Binance’s transaction-signing infrastructure.
Compass Point analysts said Binance has enough liquidity to cover the loss. They pointed to $1.2 billion in excess USDT reserves, about $1.2 billion in bitcoin and more than $1.5 billion in USDC.
Compass Point also expects pressure on stablecoin supply as Binance repays customers. It is watching Bitcoin’s $75,000 to $77,000 range.
Coinbase reported third-quarter results on the same day. Transaction revenue was $590.2 million, and net income was $718.7 million, compared with a $359.5 million loss in the second quarter.
Strategy’s Oct. 26 filing showed it holds 848,517 bitcoin acquired for $64.02 billion. It made no Bitcoin purchases or sales that week.
In a later market snapshot on Oct. 30, Bitcoin traded near $77,454, down about 5% on the day. Its session low was $76,460.
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