Coinbase's bitcoin discount widened to the biggest level of the year, but the price gap is being interpreted as a technical distortion driven by Binance suspending deposits and withdrawals rather than large-scale investor selling.

On Nov. 1 (local time), blockchain media outlet U.Today reported that the Coinbase premium index fell to about minus 0.06 percent, with Coinbase's bitcoin price forming below Binance's.

A sharp drop in the Coinbase premium index is typically taken as a signal that large U.S. funds are aggressively selling cryptocurrencies. When the index turns deeply negative, it is read as meaning stronger selling pressure emerged on Coinbase, a U.S. exchange.

This time, the situation was different. The point at which the price gap widened coincided with the period right after a Binance hacking incident. On Oct. 29 to 30, hackers attacked Binance's hot wallet and stole $6.3 billion (about 8.42 trillion won). Binance quickly froze about half of the stolen funds. The company said it would fully cover the remaining losses using its SAFU reserves.

Binance temporarily suspended deposits and withdrawals to resolve the issue, effectively paralysing arbitrage between exchanges. Under normal conditions, large investors could buy cheaper bitcoin on Coinbase, move it to Binance and narrow the price gap. With transfers blocked, that adjustment mechanism did not function. As a result, liquidity was trapped inside each exchange, and the Coinbase discount was inflated beyond actual supply and demand.

Alex Thorn (알렉스 손), head of research at Galaxy Research, pointed out that the Coinbase discount did not function for a time as a signal of weakening U.S. demand because trading was blocked. That means the index drop cannot be explained by market sentiment alone.

The market shock was reflected in prices. As fear spread, bitcoin slid to $77,000 to $78,000. The decline emerged amid market anxiety created by the hack and trading restrictions at the same time, rather than from the Coinbase premium drop itself.

The market's next focus is how quickly arbitrage traders narrow the price gap within a few days. If the gap between Coinbase and Binance quickly narrows after Binance resumes withdrawals, this year's biggest discount is likely to be seen as a temporary anomaly created by trading restrictions.

If the negative spread remains entrenched, the interpretation could change. In that case, it could become a signal that an actual slowdown in demand from U.S. funds is being confirmed belatedly. Ultimately, the widening Coinbase discount has remained an example of how easily market signals can be distorted when exchange infrastructure stops after a hack, rather than being a simple price indicator.