Bitcoin is still holding on to the bulk of gains from a big rally over the past month.
Dreamstime
Bitcoin
and other cryptocurrencies fell Wednesday in volatile trading following bombshell news that the CEO of Binance has pled guilty to anti-money-laundering violations and will step down from the world’s largest crypto exchange.
The price of Bitcoin has fallen 2% over the past 24 hours to $36,600, the largest digital asset’s lowest level in a week. Bitcoin has retreated further from its recent peak near $38,000, which marked its highest point since cryptos plunged into a brutal bear market in May 2022, but the bulk of gains from a rally that has pushed prices two-thirds higher in a month remain.
“The pressure on the market is due to the resignation of Binance’s CEO, who has been the face of the industry for the past year following the collapse of FTX,” said Alex Kuptsikevich, an analyst at broker FxPro. “The market movement does not yet suggest a dramatic change in the long-term view of the industry … Bitcoin briefly touched $35,600 but found buyers again in more liquid trading … [it] has managed to stay within the uptrend of the last four weeks.”
Binance is by far the world’s largest token exchange by trading volume and—alongside CEO Changpeng Zhao—the group also pled guilty, agreeing to $4.3 billion in fines and five years of third-party monitoring. Zhao, who owns Binance, will pay a $50 million fine and faces an 18-month maximum prison sentence under federal guidelines.
While the news has, in the short-term, injected uncertainty into crypto—and caused hundreds of millions of dollars in outflows from Binance—some market participants see this development as a sign of positive maturation in the digital asset space.
“CZ stepping down from Binance is a strong signal of the maturity of the crypto market, where, in contrast to the wild-west stereotype, those who operate outside certain parameters will now be held accountable,” said Greg Moritz, the COO of crypto hedge fund AltTab Capital. “Even more importantly, a succession at Binance would show that the largest crypto operations have a solid continuity plan and are not dependent on any one person.”
As the crypto market settles in the wake of Binance’s bombshell, it’s likely that Bitcoin and other digital assets face a period of muted trading in the days ahead, just like the
Dow Jones Industrial Average
and
S&P 500.
Once economic data releases are out on Wednesday, U.S. investors are likely to log off as the Thanksgiving holiday and Black Friday loom.
Beyond Bitcoin,
Ether
—the second-largest crypto—was recovering from earlier losses, up less than 1% at above $2,000. Smaller tokens or altcoins were weaker, with
Cardano
down 3% and
Polygon
plunging 4%. BNB, the native coin to the Binance exchange, fell 10%. Memecoins were also in the red, with
Dogecoin
dropping 4% and
Shiba Inu
shedding 5%.
Write to Jack Denton at [email protected]
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