Why is Bitcoin dropping today?

Bitcoin fell 4.1% to $78,044 on Friday after reports of a potentially record-breaking security breach at Binance — the world’s largest cryptocurrency exchange — triggered a sharp wave of selling across crypto markets.

Binance confirmed it had temporarily suspended withdrawals across multiple networks following a security incident, with blockchain intelligence firms tracking suspicious outflows from exchange-linked hot wallets that some analysts estimated at up to $5.8 billion in digital assets. In response, stablecoin issuers Tether and Circle moved swiftly to freeze a combined roughly $2.4 billion in USDT and USDC associated with the suspected breach, while the decentralized lending protocol Aave froze its lending markets to prevent the suspected exploiter from borrowing against stolen funds.

The hack-driven panic was amplified by a cascade of leveraged liquidations that had already been building before the breach news broke. The Federal Reserve’s October 28 decision to hold its benchmark rate at 3.75%-4.00% — with two committee members dissenting in favor of an additional hike — had set a hawkish tone that weighed on risk assets overnight, and approximately $356 million in crypto futures positions were liquidated as prices weakened through the key $80,000 support level.

Binance co-founder Changpeng Zhao acknowledged on social media that "it does look like a hack on Binance," while adding that user funds are safe, though Binance itself had not issued a formal confirmation of the breach amount.

The broader market environment offered little shelter, as a continued selldown in tech stocks hurt appetite for risk-driven assets like crypto.