What really happens to Bitcoin if Binance goes under?

What really happens to Bitcoin if Binance goes under?

Click Here To See The Best Crypto Presales That Could Increase 10X This Year!

Binance’s controversial Proof of Reserves report, intended to reassure investors, only fueled speculation about the company’s finances.

Buy BTC at eToro now

After a spectacular fall on the US FTX cryptocurrency exchange, investor confidence in the cryptocurrency ecosystem is low. Therefore, the ongoing media reports and rumors on social media about an unusually high outflow from the world’s largest crypto exchange, Binance, are ringing alarm bells among crypto investors and the wider investment community.


Trouble at Binance?

Binance’s controversial Evidence of Reserves Report, which should reassure investors, continues to fuel speculation about the company’s finances. The release of the report fueled speculation that Binance is not 100% collateralized, raising significant concerns about the exchange’s liquidity.

Bitcoin, which experienced a meteoric rise of approximately 73,000% from 2012 to December 2022, is once again facing the negative effects of bad actors within the cryptocurrency ecosystem – albeit completely independent and independent from Bitcoin itself. go down?

Binance audit controversy

Led by Changpeng Zhao, commonly referred to as “CZ”, the crypto exchange hired Mazars – an audit firm used by former US President Donald Trump – to produce an audit report.

The exchange’s assets held in custody by its users were targeted. Binance has claimed many times including on December 13th that it has more than enough funds to cover all client funds.

However, the Mazars report was not well received by the public. On Twitter, many people call it fake – so Binance is only 97% secure.

John Reed Stark, former head of internet enforcement at the US Securities and Exchange Commission (SEC), said:

Binance’s “Proof of Reserve” report does not address the effectiveness of internal financial controls, does not make any opinion or representation, and does not confirm the numbers. I have worked with CSS for over 18 years. This is how I define an alarm signal.”

Stark also criticized Binance for hiring Mazars to produce its backup evidence reports – rather than enlisting the services of one of the Big Four accounting firms.

Investors withdraw their coins

Fears about Binance’s collateral prompted massive withdrawals from the exchange, according to blockchain information platform Nansen. In just two days, investors withdrew more than $2 billion. This number represents Binance’s highest net outflows since FTX entered.

Binance then temporarily paused stable USDC withdrawals. However, the exchange emphasizes that it has ended withdrawals while doing token swaps – exchanging one cryptocurrency for another without using fiat currency.

However, the large withdrawals could indicate that investors are trying to transfer their assets to another platform or keep them themselves after the report on proof of reserves that the market participants were not exactly at ease. In addition, Reuters reports that the exchange and its founder, CZ, are facing a possible lawsuit from the US Department of Justice (DoJ) regarding possible money laundering and violations of criminal sanctions. Just rumours?

Other crypto exchanges have also seen significant outflows since the collapse of FTX, one of the largest crypto exchanges at the time. As FTX’s situation continues to deteriorate, founder and former CEO Sam Bankman-Fried has been arrested in the Bahamas and charged by US authorities with fraud.

What happens to Bitcoin if Binance fails?

Meanwhile, the outlook for risky assets has improved after the latest Consumer Price Index (CPI) confirmed that US inflation is slowing. This raises hopes for more cautious monetary policy from the Federal Reserve.

However, this does not necessarily apply to Bitcoin and other digital assets as crypto-specific news continues to undermine investor confidence. Broken trust and potential troubles at Binance could seriously damage the crypto ecosystem.

Bitcoin fell over 20% in early November due to the fall of FTX, wiping out about $250 million of the total crypto market cap in response to the fall of FTX. Many fear that the crash could be much worse after the possible collapse of Binance, with serious and long-term consequences for the entire ecosystem around Bitcoin.

First of all, the overall risk perception towards bitcoin and cryptocurrencies is much worse than before the fall of FTX. Second, while FTX is primarily focused on the US, Binance is a global crypto exchange. Any major disruption to Binance could snowball and start a new round of extreme withdrawals – withdrawals that ultimately lead to more bankruptcies.

This week, investment titan VanEck predicted that the price of bitcoin could remain under pressure into early 2023 as several major mining firms teeter on the brink of collapse.

VanEck emphasizes: Bitcoin could drop as low as $10,000 in the first quarter of 2023 before recovering to $30,000 later in the year. A Q123 selloff would “mark the bottom of crypto winter,” according to Matthew Sigel, head of digital asset research at VanEck.

However, the recovery can only happen without any crypto-specific negative news like FTX or Binance.

Bitcoin & Binance – the conclusion

Despite the numerous reassurances from Binance and its founder Changpeng Zhao, the crypto community is still getting nervous about the financial health of the world’s largest digital asset exchange.

The fall of Binance, although unlikely, could have a much larger negative impact on the entire crypto community given the company’s global footprint and importance.

Potential problems at Binance, and this just over a month after the drop in FTX, could trigger another Bitcoin selloff. While a fresh correction would be disastrous for many, many long-term Bitcoin investors see this as an attractive buying opportunity.

Buy BTC at eToro now

Text credit: Cryptoslate

For the best fight presale ever

  • Fightout is the best Move2Earn cryptocurrency with many possibilities
  • The spectacular start of the pre-sale marks a record pre-sale
  • Measures combat and reward each exercise activity of its users

Buy Dash 2 Trade cheap in presale now!

  • Dash 2 Trade offers cutting-edge crypto analysis tools and many features
  • Currently, D2T tokens can be purchased in advance at a discounted price
  • The value of the new cryptocurrency Dash 2 Trade could soon explode

Don’t miss out: RobotEra is still available for free!

  • A trendy metaverse project based on NFT
  • Features sandbox style play and earnings
  • Get in now for free through the presale

Buy Calvaria now in the Presale!

  • Calavria: Duels of Eternity is the hottest GameFi game right now
  • Interesting for fun 2 gamers to earn and one-coiners alike
  • Get to know Calvary now and get eRIA tokens in the presale

Buy IMPT now in the Presale!

  • The sustainable IMPT token is still in pre-sale.
  • Buy IMPT and support the transformation to a greener crypto future.
  • green cryptocurrency with huge potential.

Cryptocurrencies are a highly volatile, unregulated investment product. Your capital is at risk.

Bitcoin and Ethereum fall with stocks - Dogecoin crashes 20%

Bitcoin and Ethereum fall with stocks – Dogecoin crashes 20%

Visa propose des paiements automatiques pour les comptes Ethereum

Visa offers automatic payments for Ethereum accounts