Binance CEO Changpeng Zhao predicts challenging period after rumors of FTX-like collapse


Share:
  • Binance exchange is consistently making headlines for massive user withdrawals and fear of an FTX-style collapse. 
  • Changpeng Zhao shrugged off user concerns and said the platform can survive any crypto winter and will get past this challenging period. 
  • BNB, the native token of the exchange, yielded 12% losses for holders over the last two weeks as they struggled with FUD on crypto Twitter. 

Binance, the world’s largest exchange by trade volume, is the target of speculation on crypto Twitter as users raise concerns over similarities with doomed crypto broker FTX. CEO Changpeng Zhao tried to assuage employee concerns in a recent memo. The exchange’s native token BNB is bleeding in response to the fear, uncertainty and doubt (FUD).

Also read: Binance CEO Changpeng Zhao fights crypto jitters, exchange processes $1.4 billion in withdrawals in 24 hours

Binance in the spotlight after Changpeng Zhao’s memo to employees

Binance International witnessed a total of $12.4 billion in cryptocurrency withdrawals over the past week according to crypto intelligence tracker Nansen data. This is higher than the weekly withdrawals of eleven cryptocurrency exchanges combined. 

Token flow value by exchange sourced from Nansen

Token flow value by exchange sourced from Nansen

The top crypto exchange’s withdrawals have raised concerns among traders and investors on crypto Twitter. Following the collapse of FTX exchange, CZ’s exchange published a proof-of-reserves report created by leading accountancy firm Mazars. However, instead of alleviating user concerns it raised several questions about the largest exchange by volume’s solvency, how collateralized the platform is, and what internal accounting controls and processes it has in place to safeguard user’s deposits. 

Changpeng Zhao, the CEO of Binance addressed staff concerns in a recent memo circulated among the exchange’s employees. CZ wrote that the exchange expects the next several months to be bumpy but that the business will get past this challenging period. 

The co-founder of the world’s largest exchange commented on FTX exchange’s collapse and said,

With all that is going on, we know that we are at a historic moment in crypto. Rest assured, this organization was built to last.

Is Binance the next FTX?

FTX exchange collapsed relatively quickly in early November after an outflow of a few billion in withdrawals. Samuel Bankman-Fried’s exchange then froze withdrawals and filed for bankruptcy shortly after. Massive exchange outflow is now seen as a red flag among platform users. 

CZ shrugged off the issues, however, and assured traders that the exchange can survive any crypto winter and was built to last.

BNB is bleeding in response to speculation

Binance’s native token BNB yielded 12% losses over the last two weeks as speculation regarding the platform’s insolvency started doing the rounds. BNB is used to pay transaction fees and distribute rewards among users. BNB price nosedived from $301.33 to $264.81 within fourteen days. 

BNB/USD price chart

BNB/USD price chart 

BNB price is currently in a descending channel. BNB price trend changed in week four of November, then in the first week of December, the 200-day Exponential Moving Average (EMA) crossed over the 50-day EMA resulting in a bearish death cross signal. If BNB extends its losses, the 61.8% Fibonacci extension at $244.4 is the downside target. 

The Relative Strength Index (RSI), a momentum indicator, reads 33.99 at $265.71. RSI is close to 30. If it breaks below it will indicate that BNB is oversold. 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

Shiba Inu inspired meme coin BONE notes first rise following the 55% crash in two months

Shiba Inu inspired meme coin BONE notes first rise following the 55% crash in two months

Bone ShibaSwap, also known as BONE, is one of the few meme coins that had a positive run on Monday. The meme coin is best known for being a token of the Shiba Inu ecosystem but is slowly emerging into an entity of its own, provided it can attract enough users to fuel its long overdue recovery. 

More Bone News

Binance reopens Belgium operations after three months of suspension by FSMA

Binance reopens Belgium operations after three months of suspension by FSMA

Binance has resumed operations in Belgium, around three months after suspension. An earlier report indicated that the Belgian regulatory body, Financial Services and Markets Authority (FSMA), instructed Binance to halt operations in the country beginning June 23 for violating laws.

More Cryptocurrencies News

Optimism, YGG, AGIX prices ready for impact with almost $40 million worth in cliff token unlocks this week

Optimism, YGG, AGIX prices ready for impact with almost $40 million worth in cliff token unlocks this week

Optimism, Yield Guild Games, and SingularityNET ecosystems have massive token unlocks slated for later this week. Up to 12.42 million YGG tokens will be unlocked on September 27, a day before 9.68 million AGIX tokens are unleashed to the market.

More Cryptocurrencies News

Bitcoin and other crypto asset funds could grow by 1,200% by 2028: Bernstein Research

Bitcoin and other crypto asset funds could grow by 1,200% by 2028: Bernstein Research

Investments in crypto assets have been a dicey move, especially considering the recent market conditions. However, the optimism surrounding their future has been considerably supported by many individuals. Losing this opportunity could also scale your efforts back by over five years.

More Bitcoin news

Bitcoin: BTC downside likely after 20-week EMA culls bulls

Bitcoin: BTC downside likely after 20-week EMA culls bulls

Bitcoin (BTC) bearish price fractal, as discussed in a previous article, is underway, but the lack of volatility is causing ambiguity and doubt. Regardless, BTC might see a bit of an upside before the long-term bearish scenario plays out.

Read full analysis

BTC

ETH

XRP