The last few days have seen a new small wave of negative news regarding Binance, but this time BNB has held up.
Indeed, it would seem to be a kind of FUD campaign, but it seems to have left the markets relatively unmoved.
By now the markets have become so accustomed to these FUD campaigns that if there are no concrete and obvious problems they often prefer to ignore bad news, giving it little credence.
Binance’s problems with China
The most obvious case of this dynamic is related to the Wall Street Journal’s (WSJ) allegations that the exchange is still doing big business with China.
In theory, cryptocurrency trading would be banned in China, but apparently the Chinese have found ways to do it anyway. WSJ speculates that one of the solutions found is precisely using Binance, so much so that in their view China would still be the single most active domestic market for the exchange with $90 billion in monthly trading volumes.
The source of this information would be the exchange’s internal platform called “Mission Control,” with most of those volumes concentrated on futures trading.
Mission Control‘s data would show that there are still 5.6 million registered users based in China, to which only just over 900,000 are active. In total, there would be more than 128 million registered users worldwide on Binance’s various platforms.
These numbers, combined with the total monthly trading volume of $670 billion, make one suspect that the $90 billion in trading that the WSJ imputes to China may be a vastly overstated figure.
Indeed, the exchange has debunked it.
Binance was actually founded in China in 2017, but later had to move because of China’s ban on cryptocurrencies. In addition, its co-founder and CEO, Changpeng CZ Zhao, was born in China but is now a longtime Canadian citizen.
Binance’s problem with the US
Another news story that later turned out to be just a false scoop was that when Binance’s exchange for the US market was under investigation, the board of directors tried to shut it down without succeeding because of a failure to make a unanimous decision.
CZ later revealed that two-thirds of the board voted against that proposal.
The exchange’s compliance issues with US regulations are present, but by now the markets have largely discounted the news.
It seems that in order to seek the scoop at all costs some news sources are willing to artfully exaggerate news to make it more palatable to the public, even at the cost of providing substantially incorrect information.
Amid the news from Binance, BNB holds
Markets, on the other hand, are unlikely to be manipulated by false scoops.
Maybe in the very short term they can sometimes react instinctively or emotionally, but such possible drifts are short-lived.
For instance, in the last 24 hours the price of the cryptocurrency BNB (Binance Coin) fell only 1.8%, which is perfectly in line with what Bitcoin did and only slightly more than Ethereum.
Indeed, XRP, Dogecoin, Cardano, and Solana lost more, so it can be said to have held up better than many other cryptocurrencies.
Indeed, looking at the price chart of BNB in the last 24 hours, one can clearly see a strong negative spike, probably due to the release of the FUD news, but it lasted very little. In fact, within less than two hours it had already fallen back in line with the general trend in the crypto markets.
It is possible that that spike was due primarily to retail speculators, who instead often get swept up in the excitement of the moment, or to a quick knee-jerk reaction by more experienced investors who may have wanted to sell momentarily for prudence’s sake. It is possible that once it is realized that the bad news was just false scoops, those who had exited out of caution may have partially re-entered.
These are common dynamics not only in crypto markets but also in traditional markets, although in crypto markets the impact of retail is on average a little higher.
Source: https://en.cryptonomist.ch/2023/08/03/latest-news-binance-bnb/