- Analysts see a buying opportunity. In notes on Friday, Cantor Fitzgerald, TD Cowen and Compass Point argued that the $6.3 billion theft is a serious blow to the world’s largest crypto exchange but shows little sign so far of threatening the wider market. Cantor’s Ramsey El-Assal said he expects Coinbase, Robinhood and Strategy to recover once the panic fades: “We would be buyers on weakness.”
- The selloff was steep. Coinbase and Strategy plunged 12% on Friday and Robinhood fell about 9%, while Circle dropped 9.5%, Bullish 8.3% and Galaxy 6.8% shortly after the open, as the hack combined with a tech rout that pushed the Nasdaq down more than 2%.
- The industry moved fast to freeze funds. Tether froze more than $1.5 billion of the stolen assets, Circle blocked another $800 million and Ripple froze about $200 million, and Binance says about $3 billion has been frozen in total, though frozen funds have not yet been recovered. Binance said it has set aside more than $6.34 billion of its own resources, with $5 billion already held in the exact tokens that were affected.
- Compass Point thinks Binance can cover the hole. Analysts Ed Engel and Michael Donovan pointed to about $1.2 billion in excess USDT reserves, roughly $1.2 billion in bitcoin reserves and more than $1.5 billion in USDC treasury assets, or at least $3.9 billion combined, and wrote that the exchange “has more than enough liquidity to cover the hole.”
What Happened?
Late Thursday, attackers drained an estimated $6.3 billion from Binance’s hot wallets across several blockchains, most of it in a burst lasting about 20 minutes, in what is likely the largest crypto theft in history. Blockchain analysis firms Chainalysis and TRM Labs linked the attack with high confidence to North Korean hackers. Binance paused withdrawals and pledged to restore customer balances one-for-one with its own funds, and bitcoin fell to about $76,800 on Friday, according to CoinDesk.
Why It Matters?
The analysts’ key point is that the attack hit Binance’s own systems, not the Bitcoin network or crypto as a whole. TD Cowen’s Lance Vitanza wrote that the hack exposed weaknesses in Binance’s security rather than in bitcoin’s technology, comparing it to a bank robbery that does not mean the dollar is broken. Compass Point added that rivals including Coinbase, Bullish and decentralized exchanges such as Hyperliquid could win business from Binance, and Hyperliquid’s HYPE token jumped 9.7% to $89.08 even as most of the market fell.
What’s Next?
Compass Point expects pressure on stablecoin supply as Binance reimburses customers and said withdrawals from DeFi lending platforms could pick up; lending protocol Aave has already reopened its markets after a precautionary freeze. Binance has said withdrawals could resume in roughly 45 to 48 hours. Compass Point is also watching bitcoin’s $75,000 to $77,000 range, where a break lower could put the recent rally at risk. As El-Assal put it, “this is painful, but it is not 2022.”
Affected Tickers and Coins: COIN, HOOD, MSTR, CRCL, BLSH, BTC, HYPE
