$1 Billion Buying Pressure On Bitcoin, ETH, BNB Incoming, Binance Will Convert Recovery Fund

Jake Simmons

2 years ago

2 mins read

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Bitcoin and the broader crypto market showed a strong recovery on Sunday afternoon (EST), although it was probably the most chaotic weekend in a long time. The crypto ecosystem lost another key banking partner.

The good news was that there is a bailout of Silicon Valley Bank’s (SIVB) customer funds, which means that the issuer of the USDC stablecoin, Circle, will also receive all of its funds. On the other hand, there is a coordinated shutdown of the crypto bank Signature Bank (SBNY), which is allegedly also in danger of collapse, by the Federal Reserve (Fed) and the Treasury Department in the US.

The bottom line is that this is a tough loss for the industry. In less than a week, the crypto sector’s key banking partners have been eliminated. Going forward, it is hard to imagine other U.S. banks will feel comfortable servicing this industry given the intense scrutiny they will face.

Amidst these events, Binance CEO Changpeng Zhao shared on Twitter a few hours ago that his crypto exchange will convert the remainder of the $1 billion in Industry Recovery Initiative Fund from BUSD into Bitcoin, Ethereum, and Binance Coin (BNB).

Massive Buying Pressure On Bitcoin, ETH and BNB Incoming

The Industry Recovery Fund was launched by Binance after the collapse of FTX in November 2022. The fund was meant to support cryptocurrency projects facing a liquidity crisis after the FTX crash.

The fund still includes $1 billion worth of Binance USD Coin (BUSD). In a surprising announcement today, Changpeng Zhao, the exchange’s CEO, stated that these funds will be converted into Bitcoin, Ethereum (ETH) and Binance Coin.

Given the changes in stable coins and banks, Binance will convert the remaining of the $1 billion Industry Recovery Initiative funds from BUSD to native crypto, including BTC, BNB and ETH. Some fund movements will occur on-chain. Transparency.

All $1 trillion BUSD of the industry recovery initiative fund was transferred to Binance shortly after the announcement, according to on-chain data provider Lookonchain.

$1B buying pressure on $BTC, $ETH and $BNB https://t.co/WOm2AOcOVR

— Ki Young Ju (@ki_young_ju) March 13, 2023

The impact of Binance’s purchase can only be speculated. Analyst Miles Deutscher did agree that Binance will not simply “buy $1 billion dollars on the market” in order to massively influence the price. Binance has high-level market makers and a very liquid exchange.

“Most of the price change will be people front running, I agree the actual buys may not have the impact some think,” Deutscher said but also emphasized the magnitude the buy orders of CZ can have:

Look at what Do Kwon’s LFG Bitcoin buys did to the price back in the day. Regardless, more of a sentiment shifter than anything. There’s a chance people front run.

At press time, the Bitcoin price stood at $22,456, up almost 10% within the last 24 hours.

Featured image from CNBC, Chart from TradingView.com

Jake Simmons

Jake Simmons, a dedicated crypto journalist, has been passionate about Bitcoin since 2016 when he first learned about it. Through his extensive work with NewsBTC.com and Bitcoinist.com, Jake has become a trusted voice in the crypto community, guiding newcomers and seasoned enthusiasts alike towards a deeper understanding of this dynamic field.

His mission is simple yet profound: to demystify Bitcoin and cryptocurrencies and make them accessible to everyone.
With a professional career in the Bitcoin and crypto scene that began right after graduating with a degree in Information Systems in 2017, Jake has immersed himself in the industry. Jake joined the NewsBTC Group in late 2022. His educational background provides him with the technical prowess and analytical skills necessary to dissect complex topics and present them in an understandable format. Whether you are a casual reader curious about Bitcoin or an investor seeking to navigate the latest market trends, Jake’s insights offer valuable perspectives that bridge the gap between complex technology and everyday usage.

Jake is not just a reporter on technological trends; he is a firm believer in the transformative potential of Bitcoin over traditional fiat currencies. To him, the current financial system is on the brink of chaos, propelled by unchecked government actions and flawed Keynesian economic policies. Drawing from the principles of the Austrian school of economics, Jake views Bitcoin not merely as a digital asset but as a crucial step towards rectifying a failing monetary system. His libertarian views reinforce his stance that just as the church was separated from the state, so too should money be freed from governmental control.

For Jake, Bitcoin represents more than just an investment; it's a peaceful revolution. He envisions a future where Bitcoin fosters a sustainable and responsible financial framework for generations to come. His advocacy is not about opposition but about evolution, about laying the groundwork for a system that prioritizes transparency and equity over secrecy and inequality.

As a journalist, Jake’s articles are crafted with the precision of a scholar and the passion of a true believer. He provides not only news but also thoughtful analysis that connects the dots between daily developments and larger economic theories. His work is a beacon for those lost in the technical jargon often associated with crypto discussions, illuminating the practical implications and benefits of these technologies.

In summary, Jake Simmons is not just reporting on a revolution; he wants to be part of it, fully committed to enhancing public understanding and adoption of Bitcoin and cryptocurrencies. His work is more than just a collection of articles; it’s a resource, a guide, and a companion for anyone ready to explore the potential of this digital frontier. Whether you are taking your first steps into crypto or are a veteran looking to stay on top of the latest trends, Jake’s insights provide clarity and foresight in an often unpredictable industry. Join him on this journey to reshape the world of finance, one post at a time.

You can engage with his latest takes on Twitter: @realJakeSimmons.

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