Binance added another $300 million worth of Bitcoin to its emergency reserves on Monday, continuing its experiment with a Bitcoin-backed protection fund as markets remain under pressure.
Binance bought another 4,225 Bitcoin (BTC) worth $300 million for its Secure Asset Fund for Users (SAFU) wallet, which holds its emergency reserves, according to blockchain data platform Arkham.
The acquisition lifts the fund’s Bitcoin holdings to more than $720 million at current prices.
“We’re continuing to acquire #Bitcoin for the SAFU fund, aiming to complete conversion of the fund within 30 days of our original announcement,” wrote Binance in a Monday X post.
While the acquisition is a sign of confidence in Bitcoin by the world’s largest exchange, it also exposes Binance’s emergency fund to downside volatility of Bitcoin’s price swings, which could reduce the fund’s total value.
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Binance first announced shifting $1 billion of its user protection fund into Bitcoin on Jan. 30, framing it as an expression of its conviction in Bitcoin’s long-term prospects as the leading crypto asset.
Binance said it would rebalance the fund back up to $1 billon if the market volatility drove its value below $800 million.
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Fragile sentiment weighs on markets
Binance’s fund conversion occurs amid a wider crypto market correction, which saw Bitcoin’s price sink to $59,930 on Friday, a price level last seen in October 2024 before the re-election of US President Donald Trump, according to TradingView.
Meanwhile, Bitcoin investor sentiment remains “fragile,” threatening more downside in the absence of positive market catalysts, Hina Sattar Joshi, director for digital assets at liquidity and data solutions platform TP ICAP, told Cointelegraph.
“Sentiment is currently very fragile, with investors anchoring themselves to the traditional four-year Bitcoin cycle, in which Bitcoin’s price historically follows a recurring pattern of ‘boom and bust.’”
The industry’s best traders by returns, tracked as “smart money,” also continue betting on more crypto market downside.
Smart money traders added $7.38 million worth of leveraged short positions and were net short on Bitcoin for a cumulative $109 million, according to crypto intelligence platform Nansen.
Smart money traders were betting on the price decline of most of the leading cryptocurrencies, except Avalanche (AVAX), which had $7.38 million in cumulative long positions.
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