Binance Hack: Why Bitcoin Didn't Crash Like It Did in 2018
In brief
- Bitcoin dipped to about $76,400 on Friday, roughly 6% below its post-Fed level, after Binance's record $6.4 billion hack, versus a fall from $10,740 to $9,690 in minutes in March 2018 over an attack that Binance said stole nothing.
- Crypto's market value has grown from more than $400 billion in March 2018 to roughly $2.6 trillion, and U.S. spot Bitcoin ETFs now hold roughly 1.3 million coins.
- Binance says it has set aside more than $6.34 billion to cover losses, about $3 billion is frozen, and withdrawals should resume in 45 hours.
Bitcoin is down about 4% a day after the biggest crypto hack on record. In March 2018, a failed attack on the same exchange knocked nearly 11% off its price in minutes, and Binance said at the time that no funds had been stolen.
Binance has confirmed yesterday's attack, and Chainalysis and TRM Labs put the theft at roughly $6.4 billion, more than four times the previous record hack: the $1.5 billion Bybit heist of February 2025. Bitcoin dipped to about $76,400 on Friday, around 6% below where it traded after Wednesday’s Federal Reserve decision.
More than $1.3 billion in leveraged bets was liquidated, meaning trades placed with borrowed money that exchanges close automatically when prices move against them. And yet Bitcoin is holding relatively steady, all things considered.
The 2018 incident was a phishing and theft attempt: attackers took over accounts, created API keys (credentials that let trading bots act on an account) and used them to pump the obscure coin Viacoin while 31 accounts that had pre-deposited the coin sold it. Bitcoin fell from $10,740 to $9,690 within minutes and kept dropping to about $6,600 by April 5, though the market was already in a bear run after peaking near $20,000 in December 2017.
To have a grasp of the situation, the entire crypto market was worth just over $400 billion in March 2018 and is worth roughly $2.6 trillion now.
A big reason for that, and why panic doesn't hit markets the same way anymore, is U.S. spot Bitcoin ETFs. Funds like BlackRock’s iShares Bitcoin Trust let people buy Bitcoin through an ordinary brokerage account, and they now hold roughly 1.3 million BTC, about 6% of the supply.
→Their shareholders don’t keep coins on Binance, and sovereign wealth funds such as Mubadala and the Abu Dhabi Investment Council have been buying. BlackRock’s fund alone took in $136 million on Wednesday, per Farside Investors data.
These funds don’t tend to panic sell so easily, and those funds remain locked for long periods of time.
The theft began at 4:05 p.m. ET Thursday, after U.S. markets closed, so Thursday’s preliminary $17 million of ETF inflows predate it and Friday’s flow figures are the first real read on whether those holders are selling.
The attacker still holds more than 420,000 ETH and 18,270 BTC, about $2.4 billion that no stablecoin issuer can freeze. The amount doesn’t account for other tokens, which would increase the holdings to more than $3 billion.
TRM and Chainalysis tie the attack to the North Korean group behind Bybit, which after that heist converted about 84% of the stolen Ethereum into Bitcoin through Thorchain, a cross-chain swap network.
Binance says it has set aside more than $6.34 billion of company funds to cover every loss, and it is buying the missing tokens on the open market and over the counter, meaning in private deals off the exchange. About $3 billion is frozen, deposits are operating normally, and withdrawals are on track to resume in 45 hours.
Market sentiment was already soft before the theft and slid further: CoinMarketCap’s Fear and Greed index, a 0-to-100 gauge of market mood, dropped to 36 points from 43 (now in “fear” territory after being “neutral” yesterday), and Bitcoin sits about 38% below its $126,080 record. Back in 2018, the market was well in “extreme fear” territory at 12 points on the scale when the incident happened. Traders were already in panic mode, and the attack just worsened an already ugly situation.
Glassnode data show long-term holders underwater on about 4 million coins bought between $85,000 and $118,000, and HashKey analyst Tim Sun said before the hack that the market’s problem “is not panic selling, but rather insufficient new buying interest.”
So, taken all together, what it all boils down to is this: A more optimistic market, much more liquidity, active long-term investors, a clearer regulatory framework, a sense of safety thanks to that regulatory clarity, quick action by stablecoin providers, and a price trend in recovery likely all played a role in keeping Bitcoin safe from a global panic despite the record-breaking hack.
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