Binance vs. FTX: An Interesting Turn of Events
The day began with the depressing news that FTX had allegedly stopped processing withdrawals. According to on-chain data, the final FTX transaction to leave Ethereum was processed at 6:37 AM ET. Withdrawals on Tron and Solana also appear to have stopped. FTT was rapidly falling to record lows, bringing the entire cryptocurrency market to its knees. But amid this massacre in the cryptocurrency market, the FTX disaster just took an intriguing turn. This is when Binance revealed that it would be acquiring FTX! What will this mean for the crypto community and how will it affect the industry?
CZ is implying that they do not want to be left with a sizable bag of pointless tokens when all comes tumbling down a second time. But he also basically claims that FTS has been disparaging Binance to others. Or more precisely, “lobby behind other industry participants’ backs against them.” Of course, this may mean a wide range of things. But it seems like there’s more to the tale than just FTX being Celsius 2.0. Even if it’s hard to imagine, CZ tweeted on November 6th that this was a preventative measure and a learning from the $LUNA fall. But he also makes a further clue. The market reacted favorably right after, with FTT rising from $14 to $19 and BNB regaining its position among the top 3 cryptocurrency charts by rising from $323 to $385!
Will FTX evolve into Celsius 2.0 after Binance buyout?
Because of the high volatility of cryptocurrencies, which provide both a variety of trading opportunities and potential problems, I find it to be both a thrilling and worrisome venture into unexplored terrain. To be able to enjoy the highs and survive the lows, however, only invest money that you can afford to lose. Since FTX will be able to avoid ultimate insolvency as a result of this merger, the cryptocurrency industry as a whole will benefit greatly.
Terra Luna’s demise has made us all too familiar with the spiraling series of negative events that could result from this merger. Is it safe to predict that a bull run is about to happen now that there appears to be light at the end of the tunnel? Or does this make cryptocurrency more centralized with a single entity controlling nearly veto-equivalent amounts of power? Is this a threat to the decentralization of cryptocurrencies? Time will only tell.
There aren’t many details available about this “strategic deal” yet. The only thing that has been made apparent is that FTX US, the cryptocurrency exchange’s American division, would continue to run normally without being affected. The information was made public in response to claims that FTX had halted user fund withdrawals because of liquidity issues. Everything, despite doubts that Sam Bankman’s financial support for Fried’s businesses wasn’t as trustworthy as believed.
However, it is very unsettling that Binance, via the company’s CEO, was accountable for the FTX issue. Additionally, there has been a heated argument between the senior executives of the two platforms. They have been calling one another names.