Following the announcement that Binance Holdings Ltd., the largest digital asset exchange in the world, planned to create an industry recovery fund, major cryptocurrencies were generally up.
Aiming to “avoid additional cascading negative impacts” of the failure of rival exchange FTX, Zhao stated on Monday that the fund will help projects that are otherwise solid but are experiencing a liquidity crunch.
Following the tweet, Bitcoin rose sharply, although some of those gains were eventually reversed. In New York, the token was up 1.2% to $16,567 at 10:23 a.m. Prior to that, it got close to the year’s low after a 3.4% intraday decline. Last week, it fell 23%. A token linked to Sam Bankman-defunct Fried’s FTX enterprise, Solana, ended a three-day decline to gain up to 11%.
Despite the fact that the markets rose as a result of Zhao’s tweet, Mati Greenspan, the founder and CEO of Quantum Economics, believes that such a fund may not be the greatest option for the sector. In a decentralised market, he claimed that Binance already exerts too much power.
I feel uneasy about that kind of power concentration, said Greenspan. It is the sort of thing that crypto was intended to prevent, and it is one of the lessons we ought to have taken away from last week.
Elon Musk’s tweet that Bitcoin “will make it” also helped the cryptocurrency markets, according to Greenspan. Dogecoin, a cryptocurrency that the Tesla CEO has previously endorsed, rose as much as 7.9%.
Zhao made no indication of the potential size of the fund. He stated further information will be provided and asked other business players to “co-invest.” After wiping away roughly $200 billion of the value of the cryptocurrency market in the previous week, FTX’s collapse is still having a lasting impact.
