ARE YOU WORRIED about the potential collapse of BINANCE?steemCreated with Sketch.

in Project HOPE2 years ago (edited)




Today, I would like to focus on receiving your feedback on one particular topic: the upcoming future of Binance exchange. Are you fearful or calm about its future?

Recently, we have all witnessed the collapse of FTX crypto exchange, which caused many investors to lose their funds, resulting in a devastating effect on the crypto market. Following that event, tons of attention has also been directed towards Binance, an exchange which is much larger than FTX and not really much more transparent with their reserves and liabilities.

The other day CZ (Ceo of Binance) has been "grilled" during his interview in CNBC to the point that entire crypto market dropped again from $18k all the way down to $16k. Have you seen that interview? It did look quite embarrasing for CZ and there were moments where he sounded like a person who desperately wouldn't like to be the subject of such an interview.

The very next day, a friend of mine asked me if I'm concerned with the situation around Binance and if I'm worried that they will also share a similar faith to FTX (collapse caused by sudden lack of liquidity). And this is exactly what I would like to discuss with you today.

Share your own view on that topic


Before I will write what do I think about the potential threat that Binance will collapse, I would like to ask you to share your own view. Are you concerned about the upcoming future of this particular crypto exchange? Or perhaps you see it all as another FUD and nothing more than that?

My personal perspective


Right now, I think he (CZ from Binance) got himself into real war with part of the political and financial establishement in USA. And that he didn't see it coming.

At the same time, my life and business experience taught me that markets usually tank when unexpected things are happen. Those that we fear the most do not usually happen.

So in a way - I was more worried that Binance can collapse (just like FTX would) when noone expected it. Now expectations are quite high that something might break. And that makes it already unlikely to happen.

It is because absolute majority of business collapses happen because of sudden liquidity problems. If FTX would have enough time to prepare himself for liquidity shortage, then he would also survive.

Right now binance got enough time to prepare themsleves for a liquidity crunch and for some sort of 'punch back' directed at them. Which makes it unlikely for them to collapse.

Would you agree or disagree with my stance on this topic ?

Yours, @crypto.piotr
@project.hope founder
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Dear @crypto.piotr a valid concern indeed.
Binance currently is the last centralized standing tallest amongst all others. That being said I have to say that there is a lot of suspense about the actual state of affairs of Binance.

Binance is like a closed box and no one knows for sure what is happening there so the best approach is to be optimistic yet cautious.
Thus my approach is that of cautious Optimism.
Perhaps CZ is spreading the risk and if you notice he has been spreading the word and promoting trustwallet the decentralized wallet of Binance.
Pair it with the binance smart chain so perhaps he is trying to maintain his leadership position as a centralized exchange and in case people lack faith they can switch to trust wallet and do a decentralized exchange either from within the app or via one of the many dapps on BSC.
It may not be giving a 100% coverage for all the coins and tokens but it sure would allow users to move funds from Binance centralized to a dex version and still have a hold over the client base and all the BSC transactions do earn him the BSC transaction fee as well.
So he is spreading the risk yet trying to maintain his client base.

 2 years ago 

Thank you for this amazing comment @thetimetravelerz

 2 years ago 

@tipu curate 5

I really don't think that Binance will collapse like FTX. They have all the time to prepare themselves for anything that may be coming their way. It's very unlikely for that to happen.


It is only Natural for such fears to come up in humans due to some past experiences in the crypto world. As for binance, i will say i am not too worried about it.., i have a positive view of it in the future....anything can happen in just a second.

Article like this is very useful, thank you for sharing it and also inuding your opinion.

Thanks for setting 50% to smilenigeria. Though this will go to steem power instead of steem...what we need now is STEEM, not STEEM power.

I think it is certainly within the realm of possibility that Binance could also collapse... sadly, the entire cryptocurrency industry has been so far removed from its idealistic roots to become a viable alternative to fiat currency... and instead has put itself squarely into the realm of good old fashioned "Wall Street Greed" that's all about filling pockets... not about "banking the unbanked."

Am I worried about a Binance collapse? Only to the extent that it would further drive the overall crypto industry and its already shaky reputation even further into the ground.

 2 years ago 

Thank you @denmarkguy for dropping by and sharing your view on discussed topic :)

Hopefully you had peaceful christmas holiday

Since Binance’s balance sheet hasn’t been disclosed, and there is no standard for disclosure, it is incredibly risky for anybody to hold accounts with that crypto exchange. And even if Binance disclosed a balance sheet, I highly suspect the majority of assets that Binance holds is crypto, and crypto is vulnerable to devaluation right now…like FTT tokens…therefore the balance sheet would not be stable.

For example… CZ Interview Clip

"I remember it was $2.1 billion at the time and it was all in FTT tokens which are now worthless."

If FTX was so well capitalized, why did it send $2.1 billion "worth" of native tokens that it created, why not pay in dollars, or bonds? It's kind of like me paying for a beer with "money" that I created out of a table napkin that my beer was sitting on. And why did CZ/Binance accept those tokens?

Is CZ incompetent? Or was that $2.1 billion deal an act of financial churning (moving money because it looks good on paper rather than bringing any value)? So he could say that they did $2.1 billion deal, which implies that there is plenty of liquidity…LOL.

And has Binance accepted other "worthless" token for other "deals?"

What else is Binance up to that they're not disclosing?

When Lehman Brothers failed in 2008, the US Investment Bank, it took months to figure out how much exposure they had to worthless assets and too much debt.

The interviews and statements of Changpeng Zhao do not give me confidence. If anybody has any assets on Binance Exchange, I would transfer them into your own wallet, soon!

This reminds me of the 2008 financial crisis when investment banks would trade and hold on their books worthless mortgage-backed securities deriving their value from continually high housing prices that were based on credit/debt that no one ever planned on paying back, because there was no income.

In a credit contraction, it is very risky to hold any money that is not insured by a government on a centralized custodial. Binance is not an exception.

 2 years ago 

Thank you @fijimermaid for dropping by and sharing your view on discussed topic :)

Hopefully you had peaceful christmas holiday

I don't know why I feel it like some strong hands are behind this FUD and they are trying to make Binance collapse. Maybe I'm wrong about it. But as some political people are not happy with CZ they will try their best to defame CZ and Binance as much as they can because politics is a dirty thing :)

Those that we fear the most do not usually happen.

I have seen this not in cryptocurrency but in real offline work. What we fear the most that it will happen but next day or at that time it never happens. But still we can't say much because anything can happen in this market. I hope CZ will not let Binance to collapse.

BTW I like Binance more than any other exchange :p

greetings @crypto.piotr
This situation certainly puts many people to think and their hands to debit, but I also believe that Binance is much stronger and can as it is already doing withstand the FUD, even though as you mention it did not see it coming.

This situation will also serve for Binance to consolidate much more and like all the destabilizing actions they have done in the world will serve as a boomerang as an impulse for cryptocurrencies to take an upward course.

CZ is no angle, he is a business man but still I don't think he misuses customer funds the way SBF did!!!

Already a audit was done in Binance, they are suffiently collaterised and it survived withdrawals, so its unlikely Binance will face liquidity crunch...

It's about how these guys misused your funds...

and I like to go a step farther and say, CZ has redibiility...

he has reimbursed funds of customers when their accounts were hacked in Binance you know??

He has made provisions for it... SAFU stuff...some fees goes to a account to fund contingencies...

I would say, Binance can be trusted mostly from what I know...

He is more sensible, not as currupt as SBF who used to donate funds to politicians and was damn close to these regulators, which is why it took so long to catch him...

CZ does not get into big controversies, but yes, once a while yes...

In general I feel your funds will be safe in Binance, but sensible people self custody these funds ...

I don't use Binance anyway... shrugs... it used to be my favorite exchange

 2 years ago 

I always love seeing your comments @mintymile. Thanks for dropping by :)

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