Crypto exchange Binance has had a tough few months in terms of market news and pressure from regulatory bodies. Just a few days ago, Binance lost another payment processing partner after Checkout.com terminated its contract with the crypto exchange. And now, another rumor that appears to be spreading is that Binance is selling Bitcoin on the spot market to sustain the price of its native token, BNB.
Is Binance Really Selling Its Bitcoin To Buy BNB?
The rumor originated from a post made by @WhaleChart on X (formerly Twitter), claiming that Binance is allegedly selling Bitcoin on the spot market to support the price of its own token, BNB.
Binance is allegedly selling Bitcoin to support the price of their own token BNB
— Whale (@WhaleChart) August 22, 2023
This rumor seems to be gaining ground since the tweet first went live, especially as the price of BNB continues to struggle in the market. This is because as one of the biggest holders of both Bitcoin and BNB, Binance is in a unique position to manipulate the market if it wanted.
However, this remains only a rumor as there are currently no signs the crypto exchange is manipulating the price for short-term gains in BNB.
Additionally, data from Coinmarketcap shows that the prices of both cryptocurrencies have been falling together in the past week, with Bitcoin also down by 11.20% in a 7-day timeframe.
This will not be the first time such allegations are being brought against the exchange. Binance has faced similar claims in the past, with crypto analyst JW claiming Binance was selling Bitcoin to prop up the price of BNB in June of this year.
Token price falls in tandem with BTC | Source: BNBUSD on Tradingview.com
Binance CEO Changpeng Zhao (CZ), however, denied the allegations, dismissing them as an attempt to spread fear, uncertainty, and doubt (FUD).
4. Binance have not sold BTC or BNB. We even still have a bag of FTT.
It is amazing they can know exactly who sold based on just a price chart involving millions of traders. FUD. 🤷♂️ pic.twitter.com/M3MUH2bFRE
— CZ 🔶 Binance (@cz_binance) June 13, 2023
Whether or not the theories are true, Binance has surely been under intense scrutiny, but it continues to stand strong as the biggest exchange in the world.
BNB and other cryptocurrencies that rely on the BEP20 and BEP2 token standards are very dependent on Binance, as news surrounding the exchange has led to price pumps and dumps in the past. But there has been no solid evidence that the exchange has been manipulating the prices of any of these tokens.
The price of BNB has seen a drastic reduction in the past few days as the entire market goes through corrections signaled by BTC falling by more than 8% in a couple of minutes last week. As a result, BNB has seen its price drop to $209.44, a reduction of 12.33% in the past few days.
To combat a further price drop, the BNB Chain had to manually liquidate a $200 million position on the Venus DEFI protocol, which would have been liquidated after BNB dropped below $220.
At the time of writing, BNB is the fourth biggest crypto with a market cap of $32.2 billion.
Featured image from Unsplash, chart from Tradingview.com