Why Coinbase Bitcoin Discount Just Hit a Yearly High

Classic crypto market metrics have suddenly stopped reflecting reality. Bitcoin’s discount on the U.S. exchange Coinbase relative to the international Binance has hit a yearly high, with the Coinbase Premium Index collapsing to around −0.06%. In normal times, such a chart gives traders a cold sweat: the index going deep into the red zone means that large funds in the U.S. have started massively dumping crypto. However, the current collapse of the indicator turned out to be a technical illusion. It was provoked by the emergency freeze of operations on Binance immediately after a large-scale hack of the exchange, which completely blocked classic cross-exchange arbitrage. The anomalous price gap coincided with the largest incident in the industry’s history: on October 29–30, hackers attacked Binance’s hot wallets, withdrawing about $6.3 billion.

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