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Cryptocurrencies such as BNB and FTT have been seeing some downside in the last 24 hours. This follows an eventful weekend that has culminated in what has been a clear intention of crypto exchange Binance to begin dumping its FTT holdings.
As a result, there is expected to be a reaction from both FTT and BNB when the exchange completes the dumping of its billion-dollar holdings in FTT.
Binance Pulls Out Of FTT
Social media was lit afire when Binance CEO Changpeng Zhao (CZ) said that the crypto exchange had decided to liquidate its FTT position. Now, Binance had been an incubator for the FTX exchange and when the exchange exited, it had received $2.1 billion in stablecoins and FTT tokens, which Binance has held until now.
However, according to CZ, the crypto exchange has decided that it is going to sell off its FTT holdings following recent “revelations”. Binance had already begun its sell-offs with almost $600 million worth of FTT tokens that were moved to the exchange to be sold.
CZ explained that they were actually looking at ways to sell the tokens while minimizing the impact on the market. The CEO said that the exchange usually just holds tokens that they get, but it had decided to go this way with FTT following what can only be speculated to be glaring red flags about the token or the FTX exchange.
It is no surprise that Binance is choosing to play it safe this time around. The Terra collapse had actually cost the exchange billions of dollars because it held through the worst of it. The exchange’s $2.2 billion worth of LUNA tokens was only worth a couple of hundred dollars once the network collapsed.
FTX Token struggles at $22 | Source: FTTUSD on TradingView.com
Retaliation Against BNB?
As CZ mentioned in his tweet, the crypto exchange actually holds tokens so it doesn’t seem like they were taking action against competitors. With the selling of its FTT tokens, there is no doubt that this is how it will come off, especially after the offer for FTX to buy the tokens from Binance at a value of $22 per token was reportedly turned down.
Given this, it is expected that FTX would likely retaliate towards the exchange by selling off any BNB tokens that it holds. A development such as this could see both digital assets suffer massive declines in price, which is already being witnessed at this point.
At the time of this writing, FTT and BNB are both down 1.85% and 5.01% respectively in the last 24 hours. As the saying goes, “When elephants fight, it is the grass that suffers”, retail investors will likely bear the brunt of the war between these two giants.
For many, this has signaled an exit point while watching the battle unfold from afar. If it turns into a full-blown war of both exchanges trying to undermine the other, then it will likely be the trigger that pushes the crypto market below its current cycle lows.
Featured image from Bitcoinist, chart from TradingView.com
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