When I signed up for Binance in 2019, it was like Coinbase, Kraken, or Gemini. In other words, Binance seemed to be an exchange like any other exchange.
Well, this has changed dramatically over time and Binance has become the biggest player among cryptocurrency exchanges by far. With the collapse of FTX, Binance has made another important move. Binance launched directly after the collapse of FTX a digital assets solutions platform for institutions.
You can say Binance has become the Central Bank of Cryptocurrencies. Here is how they did it.
Not everybody has suffered from the FTX crash. Some players like Binance were able to use the chaos to grow even bigger.
How did they do it? Here is the timeline.
It all started with an article on Coindesk revealing the current struggles of FTX. The Binance team read that article and informed CZ that Binance is still holding a lot of FTT tokens. It makes sense that Binance wanted to get rid of the rotten apples. So they could just go and sell them at the current market prices but this is not what happened.
On the 6th of November, CZ Binance tweeted that Binance will liquidate any FTT tokens due to the recent revelations that have come to light. In other words, they announced publicly that they will dump millions of tokens on the market.
This is something that you normally don't do because this is an announcement that will cause a huge sell-off even before you sell and this is exactly what happened.
In the end, users were not only selling their FTT tokens but also began withdrawing their funds from FTX. Economically, it makes no sense to bring the price of an asset down before you sell it.
To be very clear this announcement over Twitter is not an act of transparency, it was market manipulation.
CZ Binance knew exactly that this massive sell-off, not only from him but also from FTX customers would bring FTX into serious trouble, especially combined with a classic bank run.
On the other hand, I do not believe that CZ really knew how bad things at FTX really were. He probably thought that he can bail FTX out and did not know all the mess behind the scene. Well, noone did, to be honest.
The market manipulation from Binance is one thing and the misusing of user funds on the side of FTX is a different story. However, in the end, you should know that you better trust no one in this space. It is now obvious that SBF was a fraudster but CZ is also not the angel or savior of crypto. He is a damn good businessman and he is probably becoming the richest man in the world if he already isn't.
However, even if it worked out for FTX, Binance announced forming an industry recovery fund, to help projects who are otherwise strong but in a liquidity crisis. Of course, it is a good thing for the whole cryptocurrency space.
Now you can find a new tab on Binance for digital asset management solutions for institutional players.
These industrial players can be Asset Managers, Brokers, Hedge Funds, Family Offices, Proprietary Trading Firms, Liquidity Providers, HNWIs, Mining Companies, or other exchanges.
I can't believe that they made all this in a few das. It looks well prepared and it was published at the best possible time when Binance had all the attention of the industry.
Binance has basically become the Central Bank of the cryptocurrency space. For the cryptocurrency space, Binance has become too big to fail.
Traditional Banks that have liquidity issues can ask the Central Bank for help, cryptocurrency exchanges can go to Binance.
My Final Words
Will I continue using Binance? Of course! I made good business with Binance in the past and I still do. Binance Coin had one of my best investments in the past and I am still holding a bag. I consider Binance to be one of the safest exchanges with the highest liquidity. I would be stupid if I would stop using Binance simply because it became too big. Makes no sense to me but what do you think? It would be awesome if you let me know your opinion in the comments.
Now here is the thing. I am not only using Binance. I am also using other crypto exchanges frequently, not only centralized ones but also decentralized ones. It is important to have competition in the market and different exchanges have different advantages.
Oh, and if you for some crazy reason don't have a Binance account yet, please consider using my invitation link with the invitation code E3PGAJCE for signing up. This will save you trading fees each time you perform a trade on Binance.
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