The surprising move by the U.S. Department of Justice considering fraud charges against the world’s largest cryptocurrency exchange, Binance has left the market in suspense. However, the market trajectory in the face of such a development could baffle observers. Could there be an unusual ripple effect on the cryptocurrency market reminiscent of the FTX collapse in November 2022?
One must recall that the Securities and Exchange Commission and the Commodity Futures Trading Commission have previously slapped charges on Binance, primarily accusing its founder, Changpeng “CZ” Zhao, of breaching regulations and allegedly manipulating the trading volume. With Binance overseeing a whopping $7 billion in trading volume, the potential implications if law enforcement heap on additional charges against the crypto mammoth necessitate examination.
Naturally, there could be a plunge in Bitcoin’s value if Binance execs were charged. However, the need for decentralized currency continues to be glocal, meaning other Bitcoin buyers across the globe could potentially seize upon the dip. Nevertheless, what transpires hinges significantly on whether there indeed will be 21 million Bitcoins.
In connection to this, long-term industry observers suggest that unless a conviction ensues, charges alone won’t have a lasting impact on the market sentiment. Given that another exchange could potentially take Binance’s place and the ever-increasing utility and popularity of crypto among consumers, the market is expected to remain resilient regardless of the news cycle.
There’s also the prospect of a significant blow to the market, causing an asset drain from Binance, which could undermine the entire system of assets on BNB Chain. This event could lead to a new market crash, prompting withdrawals in protocol staking on BNB Chain, Binance assets, and exchange-related products.
The looming question, however, is if the events could instigate a price upheaval of Bitcoin by the year-end. Could the prompt a Bitcoin resurgence to the peaks of $35,000-$40,000 by the close of the year? Might the SEC’s approval of a Bitcoin spot ETF cause an uplifting effect on its price?
In the dynamic landscape of blockchain markets, accusations against high-stakes players like Binance could trigger seismic shifts in the ecosystem. These tremors, however, could result in increased strength, resilience, and eventual growth for the sector and for Bitcoin. While the Bitcoin prices continue to exhibit volatility, its comparative strength against other currencies could continue to ascend, fueling beliefs for escalating evaluation in the near term.
Source: Cointelegraph
