Binance's $100M Bitcoin Purchase: A SAFU Fund Conversion Amid Market Turmoil
In a bold move, Binance has taken a $100 million Bitcoin dip, purchasing 1,350 BTC at approximately $77,873 each, as the crypto market traded near nine-month lows. This strategic buy marks the initial phase of a larger $1 billion SAFU fund conversion, announced in January. The exchange aims to complete this conversion within 30 days, addressing community concerns following the October liquidation event.
The timing of this purchase is significant. Bitcoin's plunge below $80,000 over the weekend triggered over $2.5 billion in liquidations, leaving investors in US spot Bitcoin ETFs underwater. The average purchase price of around $87,830 now contrasts with the current market value of approximately $75,000.
Binance's transaction, confirmed by CryptoQuant, involved moving funds from 22 wallet addresses to a designated SAFU address holding 1,315 BTC, with minimal fees of 5.017 satoshis per virtual byte. This move is part of Binance's efforts to enhance its SAFU Fund's asset conversion, which has already resulted in 100 million USD stablecoins.
Industry Leaders Clash Over October Crash Root Cause
The October 10 crash sparked a heated debate among industry leaders. OKX founder Star Xu attributed the crash to Binance's 'irresponsible marketing campaigns,' specifically the 12% APY campaign on USDe, which allowed synthetic dollars to serve as collateral. Xu's statement caused a stir, with some industry participants believing the damage was more severe than the FTX collapse.
Dragonfly Capital partner Haseeb Qureshi countered Xu's argument with detailed order book analysis, dismissing the idea as 'ridiculous.' He highlighted the divergence of USDe price on Binance, noting that BTC bottomed before the impact on USDe, and the liquidation spiral occurred across multiple exchanges.
Qureshi's analysis suggested that Trump's tariff threats caused API failures, preventing market makers from rebalancing inventory. Ethena founder Guy Young supported this view, emphasizing the price discrepancy in USDe on Binance order books after the crash.
Binance's role in the crash was also questioned by DWF Labs head Andrei Grachev, who stated that the exchange's size often leads to significant events. Wintermute's Cathie Wood echoed this sentiment, describing the event as a 'software glitch' in a highly leveraged market.
Bitcoin's Bearish Outlook and Volatility
The crypto market's volatility is evident as Bitcoin dropped below $80,000 following the confirmation of Kevin Warsh's appointment as the next Federal Reserve chair. QCP Asia reported a brief fall to $74,500, and Ether dropped below $2,170. The bearish sentiment is further reinforced by Polymarket participants, who assign a 71% probability of Bitcoin falling below $65,000 in 2026.
CryptoQuant's Julio Moreno predicts potential lows between $56,000 and $60,000, emphasizing that the current market conditions are not a bull market correction. Strategy's 712,647 BTC position carries unrealized losses exceeding $900 million after the price drop.
Despite the bearish outlook, Michael Saylor's recent purchase of 855 BTC for approximately $75.3 million at an average price of $87,974 per Bitcoin showcases his confidence in the market's long-term potential.
