The largest cryptocurrency exchange in the world, Binance, is having trouble keeping its holdings. As per Forbes, the situation with Binance withdrawals is still in flux despite the cryptocurrency markets' rebound since the FTX exchange's collapse. According to the Forbes, which provided light on Binance's current situation, the cryptocurrency giant lost $12 billion in assets as a result of users' continued withdrawals from the exchange.
The cash outflow from Binance is much worse than CEO Changpeng Zhao predicted last month, and it has gotten much worse since then.
Withdrawals from the Binance exchange will exert drastic impacton BNB prices in 2023. If the withdrawals goes like this then binance coin price may hover around $285.17, if any negative sentiments continue to prevail over the months according to the data from santiments and experts analysis from coinpedia.
Is Binance Safe - What should investors do?
For investors, given the lack of transparency and all the chaos happening in the crypto world, the simple answer is that it just makes sense to withdraw from Binance right now.
To answer the question:
Is Binance Safe - What should investors do?
The answer is:
You don't want to find out cuz by the time when you do, it might already be too late. Just ask the former investors of FTX.
Whether Binance's safe or not depends on whether Binance's crypto coins that the investors put money in have any real value or not. So far, the three characteristics of cryptos that give it value are:
1) its anonymity
2) its store of value and price stability
3) reduction of transaction cost
Point 2 is moot right now considering the huge price fluctuation experienced by the crypto so what's remaining is point 1 and 3. Point 1 is non-existent in the case of some cryptos like bitcoin where registration with government-issued ID's are required to open accounts on exchanges to trade it and in the cases of where anonymity is achieved, it becomes double-edged sword. If it can achieve anonymity for you, it can also be anonymous against you. Do you really want to hold a coin that has no record of your ownership? Point 3 is still yet to be seen as reforms to the banking system can achieve the same thing and there are existing alternatives that can also achieve the same purpose even in the absence of reforms of the banking system.
The crux of the question is do we really need to hold cryptos? As Warren Buffet has put it: The only reason why people are investing in cryptos right now is they don't want to be left behind to be the last one not holding it. And this is the only thing that's giving value to cryptos, the ones that Binance's holding, the coins that's not tied to any other assets like the much-despised fiat like USD, gold, the mineral it's trying to replace and some other cryptos. But once people realize that's the only thing that's giving value to those untethered coins that Binance and other crypto exchanges have, do people really want to hold them? And if it's a coin that nobody wants to hold anymore, do you REALLY want to be the last person holding it?
I think the answer to that question is clear, especially after witnessing the collapse, ironically brought down by Binance itself, of FTX, supposedly the largest crypto exchange around. This is why the massive withdrawals of funds after being converted to stablecoins that's tethered to fiat that's supposedly not as stable as cryptos, from Binance is still continuing. The very fact that the withdrawals are happening only after converting to stablecoins and not in the untethered cryptos that Binance has just shows how much confidence investors have in Binance's coins. The highly touted audit from an independent auditor about Binance customers' reserve resulted in the auditor not being able to express even an opinion let alone assurance. They used the excuse that it's not an audit but a procedure engagement so therefore they can't express an opinion. Well if it's not an audit, then why the hell conduct it then wasting everybody's time and efforts? And if it's not an audit, then why doesn't Binance conduct an audit, a real audit not some lame procedure engagement whatever that is and publish its results to provide assurance that it does have enough reserve if it really does have all of its customers funds there? Since nothing is known and assured, it's better to be safe when nothing is known than be sorry when everything is known.
