Bitcoin ETFs sink into October outflows with $643M exit after Binance hack

US-listed spot Bitcoin ETFs experienced a sharp reversal on Friday. Investors withdrew $643 million, ending four consecutive days of inflows. The selling pushed the funds’ total October flow below zero, making the month a notable setback for products that had generally attracted money earlier in the year.

BlackRock’s iShares Bitcoin Trust led the withdrawals with $234 million. Fidelity’s Wise Origin Bitcoin Fund followed with $201 million. These two funds accounted for a large share of Friday’s total, according to Farside Investors data. The withdrawals came after Bitcoin fell to $77,000 on Thursday.

October ended with $515 million in net Bitcoin ETF outflows. It was the first negative monthly result since June, according to SoSoValue. Despite that reversal, the funds still recorded approximately $361 million in net inflows for the year through October. The figures show how quickly market volatility can change ETF flows.

The withdrawals were substantial across both crypto ETF categories. US spot Bitcoin ETFs lost $643 million on Friday and finished October with $515 million in net outflows. Ether ETFs lost another $156 million that day, taking their October outflows to a record $1.61 billion.

The year-to-date picture was less negative for Bitcoin products. Through October, they still attracted approximately $361 million in net inflows, despite the monthly reversal. Ether funds had a weaker result. October’s withdrawals erased their earlier 2026 gains and left them with roughly $45 million in net outflows for the year.

These comparisons show different scales and directions. Bitcoin ETFs had a negative month but remained positive year to date. Ether ETFs suffered both a record monthly outflow and a slightly negative year-to-date total. Friday’s withdrawals were only one day, while the October and year-to-date figures accumulated over longer periods.

A spot Bitcoin ETF is an exchange-traded fund designed to hold Bitcoin directly, so its share price generally follows the value of the Bitcoin it owns. Investors purchase shares on a stock exchange rather than buying and storing Bitcoin through a crypto exchange or personal wallet. This creates a familiar investment route for market participants.

The ETF’s manager arranges for Bitcoin to be acquired and held by a custodian. The fund then issues shares representing an interest in those holdings. Investors can trade the shares during market hours, while the fund’s Bitcoin remains under the custodian’s control. The article identifies Coinbase as a major custodian for BlackRock’s IBIT.

This structure matters because investors receive price exposure without directly handling private keys. It does not remove market risk: Bitcoin’s price can fall, as it did to $77,000 before the reported withdrawals. It also makes custody security important, because problems affecting the underlying holdings could threaten confidence in the ETF.

A major crypto hack can damage confidence in the wider digital-asset market. Binance confirmed that hackers stole about $6.3 billion in crypto assets. At the same time, Bitcoin dropped to $77,000 on Thursday. Together, those events gave investors two reasons to reassess risk: a security crisis and a falling asset price.

When investors sell ETF shares, fund managers may need to reduce the underlying Bitcoin holdings to meet that selling pressure. Falling Bitcoin prices can also make ETF shares worth less, encouraging investors to exit before further declines. The reported withdrawals followed the price drop and the hack confirmation, although the article does not prove that every seller acted for the same reason.

The immediate result was $643 million in Bitcoin ETF withdrawals on Friday. Ether ETFs also lost $156 million. These flows show that ETFs remain connected to crypto-market sentiment. Security concerns at an exchange can therefore affect products whose holdings are managed through custodians and whose values depend on cryptocurrency prices.

Binance is described as the world’s largest crypto exchange by trading volume. It confirmed on Friday that hackers had stolen about $6.3 billion in crypto assets. That announcement formed the security backdrop for the ETF withdrawals and added pressure to an already volatile market.

BlackRock manages the iShares Bitcoin Trust, known as IBIT. It led Friday’s Bitcoin ETF outflows with $234 million. Fidelity manages the Wise Origin Bitcoin Fund, or FBTC, which recorded $201 million in withdrawals. These figures identify both firms as major ETF sponsors involved in the day’s selling.

Coinbase is the company used heavily to hold IBIT’s Bitcoin, according to OneKey founder and CEO Yishi. Yishi warned that this reliance could expose IBIT to similar security threats. The article reports that warning, not a confirmed attack on IBIT. Thus, Binance was the hacked exchange, while Coinbase’s role was custody for BlackRock’s fund.

October was unusually weak for both ETF groups, but the records differed. Bitcoin ETFs ended the month with $515 million in net outflows, their first negative monthly result since June. They still had approximately $361 million in net inflows for the year through October, so the monthly reversal did not erase the full year’s gain.

Ether ETFs reached a more severe milestone. Their $1.61 billion in October outflows became a record for one month. The previous monthly high was $1.42 billion, recorded in November 2025. Friday alone contributed $156 million to the Ether funds’ October total.

The withdrawals also changed the year-to-date picture for Ether products. October’s losses erased their net inflows for 2026, leaving roughly $45 million in net outflows. These figures show that Ether ETFs set a new monthly outflow record, while Bitcoin ETFs returned to negative monthly territory after several positive months.

The Bitcoin behind a spot ETF is held by a custodian on behalf of the fund. Custodians protect the private keys that control the assets, typically using access controls, multiple approvals, and a mix of offline and online storage. The article does not specify IBIT’s exact storage procedures, but it says Coinbase holds much of its Bitcoin.

This arrangement separates investors from direct wallet management. An ETF shareholder owns a financial interest in fund shares, not the private keys to specific Bitcoin. The fund manager and custodian handle acquisition, storage, and transfers. If custody systems are compromised, the underlying Bitcoin could be stolen or become inaccessible, threatening the fund’s value and investor confidence.

That is why OneKey founder and CEO Yishi warned that IBIT could face security threats because of its reliance on Coinbase. The article reports no confirmed attack on IBIT. Still, the warning highlights a continuing issue: indirect ownership does not eliminate the security risks surrounding the assets.