Bitcoin Slides to Two Month Low Amid Liquidations, ETF Outflows, and Binance Fallout

Bitcoin and the broader crypto market opened Monday deep in the red as a cascade of selling pressure, rooted in a tech-stock rout, wiped out recent gains. Only five of the 100 largest cryptocurrencies gained at least 1% over 24 hours, while bitcoin, ether, XRP, and Solana all declined, according to CoinDesk. Cryptocurrency futures trading volume surged more than 200% to $180 billion, liquidations hit $1.1 billion, and bitcoin's one-week implied volatility jumped to about 43% from about 33% on Thursday.

Bitcoin briefly touched $73,708, its lowest price since August, before recovering to hover near $74,459. U.S. spot BTC ETFs recorded approximately $412 million in net outflows on Friday, pushing the weekly total to roughly $1.28 billion, the largest four-month outflow stretch on record. Options markets signaled rising demand for downside protection, with four of bitcoin's six most active contracts being puts at strike prices between $70,000 and $72,000.

FinCEN Withdraws Proposed Crypto Reporting Rules

In a separate regulatory development, the Treasury Department's Financial Crimes Enforcement Network and the Federal Reserve Board of Governors announced Friday they were rescinding the proposed Travel Rule and Recordkeeping Rule, which would have required financial institutions to collect data on transactions of $250 or more, down from the existing threshold of $3,000. FinCEN cited the broad range of objections it had received since the rules were first proposed in 2020. The withdrawal marks a significant policy retreat as regulators weigh oversight obligations against industry compliance costs.

The regulatory pullback arrived against the backdrop of the $6.3 billion Binance hack, the largest digital-asset heist in history. North Korean hackers used LinkedIn social engineering and malicious software to compromise a Binance engineer's laptop, ultimately draining wallets across the exchange. Blockchain analytics firm Elliptic reported that stolen funds were routed through roughly 12,000 wallets and 40,000 transactions spanning 11 blockchains, with about $2.85 billion frozen or seized. Binance said it has since re-enabled withdrawals and replenished 98% of the stolen coins from reserve funds and other sources.