simply put

  • The decline in Binance Coin (BNB) has sparked fears of a potential massive liquidation below $210.

  • Binance’s SEPA transfer issues caused BNB to fall further in value, losing 32% since June.

  • As lawsuits against Binance continue to mount, the cryptocurrency industry fears a repeat of the FTX FTT token collapse.

Pressure on the world’s largest cryptocurrency exchange continues to grow, as evidenced by the performance of its native asset, Binance Coin (BNB). BNB’s continued decline has some speculating that a larger liquidation may be on the horizon.​

Crypto social media has reacted to BNB’s continued price decline, speculating that the exchange may begin liquidating its BTC holdings to stay afloat.​

Binance BNB falls back again

There’s rarely good news about Binance these days. On August 21, the exchange announced 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 fell further.​

BNB, still the fourth-largest crypto asset by market capitalization, fell a further 3% on the day. The drop took the asset below $210 for the first time since June 2022. Additionally, BNB is currently down 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, leading to a series of disasters across the industry.

Cryptocurrency analyst “@sunnydecree” told their 71,000 X followers that a $32 billion BNB market cap is equivalent to approximately 1.2 million BTC:

“If the value of BNB falls, Binance may liquidate Bitcoin to support the price of BNB. This strategy is sustainable until it becomes unsustainable. If it fails, we may see a situation similar to FTX but be enlarge."

Investor Mike Alfred also expressed the same concern, saying: “As BNB grows, so will Binance. BNB looks sick. BUSD is dead in the water. If BNB falls below $200, It could collapse quickly."

CEHV partner Adam Cochran has been fomenting and spreading a lot of exchange fear, uncertainty and doubt ( FUD ) lately, saying:

“So far it seems that Binance is trying to do liquidations on a very small scale to avoid large-scale liquidations, but people have been pushing BNB to test it further.”

FTX concerns remain

There seems to be a lot of FUD out there at the moment, but FTX is still fresh in the minds of many. To put things in perspective, this time three years ago, BNB was trading at just $22.

Additionally, the asset is down less than 70% from its all-time highs. In comparison, most DeFi token prices are still down more than 90% from their peak.​

However, the problem remains that BNB is closely tied to Binance and most of its DeFi products, so it might not be a bad idea to keep an eye on it.​

Additionally, as lawsuits continue to mount, Binance remains public enemy number one to regulators around the world.