Crypto Journalist
Anas Hassan
Crypto Journalist
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Binance completed the first $100 million Bitcoin purchase for its SAFU fund conversion on February 2, executing a transaction of 1,350 BTC at approximately $77,873 per coin as the crypto traded near nine-month lows.
The exchange announced it seeks to complete the full $1 billion conversion within 30 days of its original January 30 announcement, responding to mounting community criticism following October’s $19 billion liquidation event.
The move comes as Bitcoin plunged below $80,000 over the weekend, triggering over $2.5 billion in liquidations and leaving the average U.S. spot Bitcoin ETF investor underwater with purchase prices around $87,830 while the asset trades near $75,000.
Blockchain data confirmed the transaction moved funds from 22 Binance wallet addresses to a designated SAFU address holding 1,315 BTC, with the exchange paying minimal fees of 5.017 satoshis per virtual byte.
Industry Leaders Clash Over October Crash Root Cause
OKX founder Star Xu reignited controversy surrounding the October 10 crash by publicly attributing the event to “irresponsible marketing campaigns by certain companies,” specifically targeting Binance’s 12% APY campaign on USDe that allowed the synthetic dollar to serve as collateral with the same treatment as USDT and USDC.
“Many industry participants believe the damage was more severe than the FTX collapse,” Xu stated, arguing that users converting stablecoins into USDe and looping leverage created artificial APYs of “24%, 36%, and even 70%+, widely perceived as ‘low risk’ simply because they were offered by a major platform.“
Dragonfly Capital partner Haseeb Qureshi immediately countered with detailed order book analysis, stating, “this story is candidly ridiculous.“
He noted that “BTC bottomed a full 30 minutes before USDe price was affected on Binance,” adding that “USDe price diverged ONLY on Binance, it did not diverge on other venues” while “the liquidation spiral was happening everywhere.“
Qureshi dismissed Xu’s timeline as “clearly misplacing cause and effect,” arguing that the best explanation is that Trump’s tariff threats caused API failures that prevented market makers from rebalancing inventory across exchanges.
Ethena founder Guy Young supported Qureshi’s analysis, stating, “data below shows clearly USDe had a price discrepancy on Binance orderbooks a full 30 minutes after BTC had bottomed from the crash.“
Xu responded by reiterating that the initial market shock would have stabilized “absent the USDe leverage loop,” maintaining that “cascading liquidations were not inevitable—they were amplified by structural leverage.”
DWF Labs head Andrei Grachev defended Binance’s role, writing “biggest exchange = biggest events, neither bad or good,” while Wintermute also criticized Cathie Wood for calling the event a “software glitch” when it was “very obviously” a “flash crash on mega leveraged market on illiquid Friday night driven by macro news.“
Bitcoin Tests Key Support as Bearish Predictions Mount
Bitcoin dropped below $80,000 following confirmation that Kevin Warsh will become the next Federal Reserve chair, with QCP Asia reporting the asset “briefly fell to around $74,500 after breaking key technical support” while ether dropped below $2,170.
Galaxy’s Alex Thorn also confirmed that U.S.-listed Bitcoin ETFs now hold approximately 1.28 million BTC at an average purchase price of $87,830, stating “this means the average Bitcoin ETF purchase is underwater” after the products recorded $2.8 billion in net redemptions over two weeks.
Given the growing bearish events and sentiment, Polymarket participants now assign a 71% probability that Bitcoin will drop below $65,000 in 2026, aligning with analyst warnings about key support zones.
CryptoQuant’s Julio Moreno particularly projected potential lows “between $56,000 and $60,000 based on Bitcoin’s realized price analysis,” stating “people continue to think this is a ‘bull market’ correction. It’s not.“
Strategy’s 712,647 BTC position now carries unrealized losses exceeding $900 million after Bitcoin dropped below the company’s $76,037 average cost basis.
Despite that, Saylor bought an additional 855 BTC for approximately $75.3 million, at an average purchase price of roughly $87,974 per Bitcoin.
For now, CryptoQuant data shows elevated volatility signs on Binance with range z30 climbing to around +3.72, a reading that “has often preceded strong price movements, either in the form of sharp upward breakouts or rapid downward moves driven by widespread liquidation.“
