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A significant portion of cryptocurrency investors entered the market in 2017, and Binance was a familiar face for them. The rapid global adoption was greatly influenced by Binance’s ability to freely operate in the gray area. A exchange that provided seamless service to citizens of more than 100 countries was exactly what the crypto needed at that time.
Will Binance Close?
No, but it is uncertain whether CZ’s strong image as the leader will be damaged. For now, Binance can start with a clean slate by strictly adhering to the rules for the next three years. During this three-year period, the company will be subject to intensive scrutiny, and if any new violations are detected, it will lead to serious problems. The CEO’s decision to step down was a difficult one, but it shows that the exchange will now strongly comply with the rules.
Yesterday was a milestone for the cryptocurrency industry. The structural problem of Binance, which was a topic of discussion for months, has now been resolved. The ongoing investigation into the case, which we have been saying is imminent, has reached a conclusion. Moreover, the fact that US officials and high-level authorities are making statements about cryptocurrencies on camera shows how far the industry has come in a few years.
Binance will continue its operations, and if the net outflow of $1 billion in the past 24 hours does not increase exponentially, we can see that it continues as before after the initial shock. We shared the reserve report that came at the beginning of this month and mentioned that the exchange has a reserve surplus. It is not expected that the problem will escalate as Binance may have prepared for a possible bank run process.
What’s Next in Crypto?
Even if the approval for a Bitcoin ETF comes, there were some risks that could confuse institutional investors. For example, the Binance case was an event that could have caused this collapse, and it is now resolved. The second biggest time bomb in crypto is DCG, and if GBTC’s conversion to a spot Bitcoin ETF is also approved, the risk appetite of institutions may increase with the crypto companies’ relief from the tight spot.
The new white page for the cryptocurrency market will be predominantly filled by institutional investors. ETF volumes will compete with exchanges, asset managers will have reserves as centralized crypto exchanges, and deep liquidity will reduce volatility. However, it is likely that we will see a period of significant upward volatility before that.
The list of events that feed optimism for 2024 is now much longer. With the approval of the ETF, halving, increase in institutional demand, interest rate cuts, and increased risk appetite in the markets, we have also seen the end of Binance FUD.
