The pressure on the world’s largest crypto exchange continues to mount, which can be visualized through the performance of its native asset, Binance Coin (BNB). The continued decline of BNB has some speculating that a larger liquidation could be on the horizon.
Crypto social media is reacting to the continued decline in BNB prices, theorizing that the exchange may start to liquidate its BTC holdings to keep it afloat.
Binance’s BNB Retreating Again
The news for Binance is rarely good these days. On Aug. 21, the exchange announced that it was limiting fiat withdrawals in Europe, citing issues related to Single Euro Payments Area (SEPA) transfers.
As a result, the value of its BNB token has tanked even further.
BNB, which is still the fourth largest crypto asset by market capitalization, has slid a further 3% on the day. The decline has dropped the asset below $210 for the first time since June 2022. Moreover, BNB has now lost 32% since the SEC sued Binance and its CEO in June.
Crypto industry analysts fear a repeat of the FTX FTT token collapse in November that caused a cascade of catastrophes across the industry.
Crypto analyst ‘@sunnydecree’ told their 71,000 X followers that the $32 billion BNB market cap is equivalent to roughly 1.2 million BTC:
“If BNB’s value drops, Binance might liquidate Bitcoin to support BNB’s price. This strategy is sustainable until it’s not. If it fails, we could see a situation reminiscent of FTX but magnified.”
Investor Mike Alfred echoed the concerns stating, “As BNB goes, so goes Binance. And BNB looks sick. BUSD is already dead in the water. If BNB breaks under $200, it could quickly collapse.”
CEHV partner Adam Cochran, who has been stoking and spreading a lot of exchange fear, uncertainty, and doubt (FUD) recently, said:
“So far it looks like Binance is trying to liquidate this in really small chunks to stave off large liquidation, but people keep pushing BNB to test it further.”
FTX Fears Still Fresh
At the moment, it appears to be a lot of FUD, but the memory of FTX is still fresh for many. To put things into perspective, BNB was trading at just $22 this time three years ago.
Furthermore, the asset has retreated less than 70% from its all-time high. Comparatively, most of the DeFi tokens remain down more than 90% from their peak prices.
However, the issue remains that BNB is heavily intertwined with Binance and most of its DeFi products, so keeping an eye on it might not be a bad idea.
Additionally, Binance is still public enemy number one for global regulators as the lawsuits pile up.
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