BNB surges 20% in 2 hours after news of Binance’s planned acquisition of FTX
BNB issued by the largest exchange by volume, Binance, soared by more than 20% in the two hours following the Binance CEO’s announcement. Changpeng Zhao (CZ) has announced plans to acquire FTX.
FTX reached out to us for help this afternoon. There is a significant liquidity crunch. We have signed a non-binding LOI to protect our users. https://t.co/BGtFlCmLXB It helps cover liquidity crises. We plan to do a full DD in the near future.
— CZ🔶 Binance (@cz_binance) November 8, 2022
Binance CEO has described the current FTX situation as “dynamic” and predicted that FTT will be very volatile in the next few days. Zhao also confirmed that Binance can withdraw a trade at any time.
Additionally, the FTX CEO has confirmed that full due diligence is expected to be completed in the near future.
2) Our team is working on clearing the drawer backlog as it is. This eliminates the liquidity crisis. 1:1 coverage for all assets. This is one of the main reasons we asked Binance to join us. Payments may take a little longer — sorry.
—SBF (@SBF_FTX) November 8, 2022
In addition to rising BNB value, FTX native token FTT sharply increased It fell 40% in a few hours, then dropped 45% to its current value of $16.41.
Sequence of events revealed large amount of withdrawals of assets from FTX in the last two days after CZ announced Binance sells stake in FTT Reserve.As a result, FTX’s treasury has dried up and Binance’s soared in volume When assets flowed to a prominent cryptocurrency exchange. As a result, some feared that FTX would collapse like the Luna debacle and face bankruptcy.
However, Binance became the first and last investor to acquire FTX.That was followed by huge speculation leading to a massive investment in BNB within hours, with the market capitalization $2.76 billion to $3.68 billionthus contributing to its significant price increase.
BNB is currently trading at $350.24, up 4.34% in 24 hours.
