Bitcoin and BNB See Quick Gains amid Binance Settlement Report

Bitcoin and BNB See Quick Gains amid Binance Settlement Report

UTC by Mayowa Adebajo · 3 min read
Bitcoin and BNB See Quick Gains amid Binance Settlement Report
Photo: Depositphotos

Both currencies remain in the down zone on the daily chart, registering 2.6% and 9.34% declines respectively.

Bitcoin (BTC) and Binance Coin (BNB) have regained the losses they registered the day before. This follows after crypto exchange Binance resorted to settling with the United States Justice Department by paying fines totaling over $4 billion. Similarly, Binance CEO Changpeng Zhao (CZ) also handed in a plea bargain on the day, with the two events greatly improving the odds that a spot Bitcoin exchange-traded fund (ETF) will be approved in the US sooner or later.

As of publication, CoinMarketCap data showed BTC trading around $36,430, having plunged nearly 5% to $35,700 on Tuesday. BNB was also seen trading at $235, trimming some of the overnight losses that made it hit $223.  However, both currencies remain in the down zone on the daily chart, registering 2.6% and 9.34% declines respectively.

Traders Tie Binance’s Woes to Spot Bitcoin ETF Approval

Both CZ and the business entity were found guilty of illegally using U.S.-based customers to amass trading activity and generate revenue. But there might be a positive to take from the situation.

Traders as well as renowned firms such as crypto services provider Matrixport, believe that CZ’s downfall may just be what the US Securities and Exchange Commission (SEC) needs to approve one or more spot bitcoin ETFs. Matrixport shared in a Telegram statement:

“With this plea deal, the expectations for a spot Bitcoin ETF might have increased to 100% as the industry will be forced to follow the rules that Traditional Finance firms must follow.”

Matrixport also mentioned that the events of Tuesday will likely bolster the adoption of Bitcoin, especially among institutional players. The persistent efforts of authorities to sanitize the industry is expected to rile up the interest of institutions as they begin to see Bitcoin as a safe-haven asset.

But despite the potential benefits, the events of Tuesday may just have put some leverage traders in an untenable situation.  The resulting price volatility after reports filtered about Binance and CZ meant that about $110 million in Bitcoin long positions were liquidated against $37.2 million in short positions. This was barely 12 hours after the settlement news, according to Coinglass data.

Similarly, BNB saw $3.73 million in long positions liquidated compared to $1.61 million in short positions. But the reason for the low volume is because it does not trade as actively as Bitcoin as users would rather stake it.

As Coinspeaker earlier reported, CZ has pled guilty to federal charges and faces a potential jail time. While he has stepped down as CEO, his lawyers believe that his sentencing will be delayed by at least 6 months.  Interestingly, the petite businessman has agreed not to appeal the sentence as long as it  does not exceed 18 months.

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