The global financial world is experiencing exciting days. A bank run recently caused the second largest crash of a US bank since the global financial crisis in 2008. In contrast, the CEX Binance with the highest turnover last year easily survived a first bank run. While CEO CZ and Binance have already been active in the past as supporters for crypto companies that have run into liquidity problems, they now want to actively promote purchases of various crypto currencies. Because CZ announced today that they want to shift the remaining capital from BUSD’s “1 trillion $ Industry Recovery Initiative Funds” into native cryptocurrencies – for example Bitcoin (BTC), Ethereum (ETH) or Binance Coin (BNB).
Some large banks such as Silicon Valley Bank, Silvergate and Signature have recently come under pressure. The biggest defaults since the 2008 financial crisis can be dated back to the past few days. Circle, an issuer of the stablecoin USDC, also struggled with significant problems, USDC crashed, but has since recovered.
At the same time, there are concerns about the crypto bank Signature Bank, which was shut down at the request of US authorities. These events could have implications for the crypto industry – after all, banks acted as fiat on-ramp for crypto companies.
Although the crypto markets have been bullish today while the stock market has been significantly weaker, the situation in the US banking world remains fraught with uncertainty and could continue to impact the crypto market
The US crypto industry is experiencing a major setback as two key partner banks were shut down in a week. Many a crypto fan is already rumored that these are concentrated actions. The effects on the crypto ecosystem in the USA could be massive, as regulation by the SEC was recently pushed ahead here. Because over 1500 crypto companies worked together with Silvergate. In the fourth quarter of 2022 alone, the trading volume of crypto transactions at Signature Bank was $275 billion, compared to $117 billion at Silvergate.
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CZ & Binance Support Market: Massive Buying Announced, Bullish!
Binance is reportedly planning to convert the industry recovery fund into cryptocurrencies, CEO Changpeng Zhao announced on Twitter. The aim is to convert around one billion US dollars in the form of the stablecoin BUSD into cryptocurrencies such as BTC, BNB and ETH. The stablecoin BUSD was recently targeted by the US judiciary, so the minting of new BUSD is stopped. Additionally, the recent uncertainty in the banking sector prompted the crypto size decision – apparently, massive buying will now support the performance of said cryptos.
Terra founder and former billionaire Do Kwon has also influenced the Bitcoin price with his own transactions in the past. In May 2021, he is said to have bought 1000 BTC when the price briefly fell below $50,000. At the same time, Do Kown is even credited with great influence when it comes to the Bitcoin ATH at just under $70,000.
Today’s pump already gives hope. Now, could the Binance millions actually cause another short squeeze and finally send Bitcoin towards $30,000?
What is the Binance Recovery Fund?
“As a leading player in crypto, we understand that we have a responsibility to lead the charge when it comes to protecting consumers and rebuilding the industry. That is why we have established the Industry Recovery Initiative (IRI), a new co-investment opportunity for organizations eager to support the future of Web3.”
The Industry Recovery Fund (IRF) by Binance is a fund created by crypto exchange Binance to support financially vulnerable crypto projects. The IRF fund aims to support the crypto industry and create a safe environment for investments. The fund was established after the FTX crash in November 2022 – CZ wanted to regain confidence.
At the beginning, Binance described the intention behind the project as follows: The IRF is not an investment fund and should act with maximum transparency. Each participant, including Binance, must make decisions independently. The initiative should last for around six months. Unused funds can then be withdrawn from public addresses at the end of the initiative – now the shift to native cryptos should take place.
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Author: Daniel Robrecht
After studying law and management, Daniel decided to work as a freelance author and has been writing qualitative publications on various specialist topics for around 10 years now. As an investor, he gained years of experience with stocks & cryptocurrencies. In addition to a long-term investment approach, Daniel is also passionate about short-term markets. Through targeted further training at international universities, he has acquired extensive knowledge about the capital markets, stocks, cryptocurrencies and decentralized finance. Daniel’s primary focus is on general market trends, exciting stocks, business news and the digital currency market. In his private life, too, there is never a day without the financial markets. As an author, Daniel writes for leading German-language publications in this field. Daniel publishes for Finanzen.net, among others, Business2Communityand FXStreet.de. Daniel on LinkedIn.
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