Shares of ProShares Bitcoin ETF slid to $10.38, down 3.6%, as Bitcoin buckled under a one-two punch: a reported $6.3 billion security breach at Binance and a Federal Reserve that just signaled it may raise rates in December. For BITO holders — who own a fund that tracks Bitcoin through futures contracts rather than holding the coin directly — the question is whether these threats are a temporary scare or the start of a deeper unwind.
• A Massive Exchange Hack Triggered Panic Selling Across Crypto
The primary catalyst was a reported security breach at Binance on October 29, 2026, involving the theft of an estimated $6.3 billion in digital assets, sending shockwaves through trading desks and triggering swift institutional selling.
Analysts noted the incident led to about $1.54 billion in total crypto liquidations, with forced selling accelerating Bitcoin's decline below $77,000.
Binance plans to begin restoring withdrawals in stages on November 1, subject to security verification tests — meaning uncertainty could persist for days. Every hour withdrawals stay frozen, confidence erodes further, and BITO's underlying futures lose value.
• The Fed Is No Longer a Neutral Bystander
The Fed held its benchmark rate at 3.75% to 4% on October 28, but the vote was split 10–2, with two officials wanting a hike.
The CME FedWatch tool now shows the likelihood of a quarter-percent rate hike in December at 81.6 percent. Higher rates make risk-free savings more attractive and speculative bets like crypto less appealing. For a fund like BITO, which already carries a 0.95% expense ratio, a tighter Fed makes the cost of holding Bitcoin exposure even steeper relative to alternatives.
• Institutional Money Bolted for the Exit
U.S. spot Bitcoin ETFs recorded $643.2 million in net outflows on October 30, their largest daily withdrawal since June, wiping out four consecutive sessions of inflows.
Bitcoin ETFs had posted a net gain of $111.2 million from October 1 to 28, but the last two sessions turned October into a net loss of $515 million. That institutional retreat pressures the same futures BITO holds, dragging its price down in lockstep.
• BITO's Structure Adds a Layer of Risk
BITO invests in futures and swaps and does not invest in bitcoin directly. That means roll costs — fees incurred when expiring contracts are replaced with new ones — quietly eat into returns, especially during volatile stretches. BITO had a total return of -29.46% in the past year, including dividends , a reminder that the fund's generous-looking ~22% yield does not offset sustained Bitcoin weakness. Until Binance restores full operations and the Fed softens its tone, BITO shareholders face a market stacked against them on every front.