In a review covering the 10 largest crypto hacks, Bitwise investment manager Matt Hougan found that Bitcoin rose five times and fell five times in the 30 days following the incidents.
In an assessment reported by The Block, Matt Hougan compared Bitcoin’s relatively limited loss after the Binance hack with historical examples. According to Hougan, the results show no consistent relationship between major security incidents and Bitcoin’s subsequent price direction.
The review looked at 30-day price performance after each hack. The equal number of periods with gains and losses does not support the idea that prices necessarily move in the same direction after news of an attack; Hougan’s assessment does not guarantee future price movements.
How should the decline after the Binance hack be interpreted?
Hougan said Bitcoin’s roughly 4% loss following the Binance hack was largely in line with the decline across the broader risk-asset group. He stressed that the attack targeted assets held in the exchange’s online hot wallets, not the Bitcoin network.
According to Hougan, the market’s response was also influenced by investors having different options for storing crypto assets. Citing institutional custody services, offline cold storage, and spot Bitcoin ETFs as examples, the investment manager highlighted the cold storage and multiple withdrawal approvals used by ETFs.
Leverage did not grow as quickly as prices recovered
Bitcoin climbed back above $80,000 on November 4. In the Wednesday afternoon data cited in the article, BTC was at around $80,500, while Ethereum was at around $2,433; daily gains were close to 3.5% and 6%, respectively.
Nexo analysts pointed to a 27% increase in crypto futures trading volume, compared with just 3% growth in open interest. According to the analysts, this gap suggests that investors are adjusting existing positions rather than taking on new leveraged risk. They also noted that market orders had shifted from the previous day’s selling bias to a slight net buying trend.
Which levels are being watched in November?
Matt Mena, research strategist at 21Shares, viewed the market’s resilience in the face of the attack positively. Mena is watching whether Bitcoin can hold the $76,000–$78,000 range and sustain its return above the $80,000–$82,000 range.
Other factors the strategist is monitoring include Binance’s progress in completing withdrawals and proving its reserves, whether ETF inflows will return, credit risk premiums, oil prices, and long-term U.S. Treasury yields.
Not investment advice.