The Binance hack may seem an obvious explanation for Bitcoin’s recent decline. But Coinbase Institutional says the evidence points elsewhere.
Coinbase Institutional says changing expectations for Federal Reserve interest rate policy, rather than the breach at the world’s best-known exchange, drove Bitcoin’s latest decline.
The inflation report that moved markets
The turning point was the Consumer Price Index report released on November 10. Headline consumer prices rose 0.4% month over month, while core CPI, which excludes volatile food and energy costs, increased 0.3%.
The figures were high enough to reshape expectations for the Fed’s next move. After the report, market pricing for a 25-basis-point rate hike in December rose above 90%.
The CME FedWatch tool put the probability of that quarter-point hike at roughly 88% to 92%. The odds of a larger move remained substantially lower.
Comments from Fed Governor Christopher Waller contributed to the shift as futures markets weighed both the inflation data and policy signals.
How the selloff unfolded
After the CPI release, Bitcoin fell below $70,000, reaching levels last seen in mid-August. By November 13, it was trading in a range of about $67,770 to $68,500.
Leverage worsened the decline. Liquidations of leveraged long positions totaled around $1.3 billion to $1.6 billion during the November 13 drop, while total liquidations were reported to have exceeded $1.6 billion.
Institutional investors were also pulling back. US spot Bitcoin ETFs recorded roughly $1.44 billion to $1.88 billion in net outflows in early November, adding persistent selling pressure alongside the liquidation of leveraged positions.
Where the Binance hack fits
This does not make the Binance breach a minor event. The October 29 hack drained about $6.3 billion in assets, including 18,270 BTC.
The incident had a brief effect on prices. But in Coinbase Institutional’s assessment, that impact faded, while the broader macroeconomic backdrop played a larger role in Bitcoin’s decline.
Coinbase Institutional’s analysis reflects a growing view that Bitcoin is now more sensitive to interest rates, inflation and the strength of the dollar than to isolated industry incidents.
What this means for investors
ETF outflows merit close attention. Spot Bitcoin ETFs saw net outflows of $1.44 billion to $1.88 billion in early November, suggesting this investor base also responds to higher rates and a stronger dollar.
The liquidation figures also offer a warning: heavy leverage can magnify every macroeconomic surprise, turning a modest repricing into a sharp decline.
The main factors to watch are the next inflation readings, the Fed’s December decision, ETF flow trends and any rebuilding of leverage in derivatives markets. If Coinbase Institutional is right, these factors will reveal more about Bitcoin’s next move than any single exchange incident.
