Binance Commits $1 Billion to Bitcoin as Market Tumbles, Kicks Off with $100 Million Purchase

In a bold move signaling confidence during a market slump, cryptocurrency exchange giant Binance has initiated its plan to convert $1 billion into Bitcoin for its Secure Asset Fund for Users (SAFU). The first tranche—a $100 million purchase of approximately 1,350 BTC—was executed on February 2nd as Bitcoin traded near nine-month lows around $77,873.

The full conversion, announced on January 30th, is expected to be completed within 30 days. This strategic accumulation responds to heightened community scrutiny following a turbulent October that saw over $19 billion in liquidations, an event whose causes remain hotly contested within the industry.

The purchase coincides with a volatile period for digital assets. Over the weekend, Bitcoin broke below the $80,000 threshold, triggering more than $2.5 billion in leveraged position liquidations. Data from Galaxy Digital reveals that the average purchase price for Bitcoin in U.S. spot ETFs sits around $87,830, meaning the typical ETF investor is now holding at a loss with Bitcoin hovering near $75,000.

Blockchain records confirm the funds moved from 22 Binance addresses to a dedicated SAFU wallet, with the transaction completed at minimal network fees.

Old Wounds Reopened

The market stress has reignited debate over October's crash. OKX founder Star Xu recently pointed fingers at "irresponsible marketing campaigns," specifically citing a Binance promotion offering 12% APY on the synthetic dollar USDe. Xu argued this created a dangerous leverage loop, amplifying losses. "Many believe the damage exceeded the FTX collapse," he stated, criticizing the perception of "low risk" attached to major platform offers.

This accusation was swiftly challenged. Dragonfly Capital's Haseeb Qureshi provided order book analysis, calling the narrative "ridiculous." He noted Bitcoin's price bottomed 30 minutes before USDe showed discrepancies exclusively on Binance, while liquidations occurred globally. Qureshi attributed the crash primarily to market maker failures following macroeconomic news related to U.S. tariff threats.

Ethena founder Guy Young supported this timeline analysis. Xu countered, maintaining that cascading liquidations were "amplified by structural leverage" and not inevitable.

Broader Market Under Pressure

The recent sell-off was partly triggered by news of Kevin Warsh's expected appointment as Federal Reserve Chair. Analysis from QCP Asia noted Bitcoin briefly fell to $74,500 after breaking key support, with Ether also dropping below $2,170.

The bearish sentiment is growing. Polymarket traders now assign a 71% chance Bitcoin falls below $65,000 by 2026. CryptoQuant's Julio Moreno suggested a deeper correction toward $56,000-$60,000 is possible, warning this is more than a typical bull market pullback.

Even major holders are feeling the pinch. MicroStrategy's massive 712,647 BTC position now carries unrealized losses exceeding $900 million. Undeterred, executive chairman Michael Saylor recently added 855 more Bitcoin to the company's treasury.

Despite the gloom, Binance's substantial buy-in provides a notable vote of confidence. On-chain metrics from CryptoQuant indicate elevated volatility on the exchange, often a precursor to significant price movements in either direction.

Community Voices

Marcus Chen, Portfolio Manager at Horizon Digital Assets: "Binance's commitment is a significant liquidity signal. Converting such a large sum into Bitcoin during weakness shows long-term conviction, which may help stabilize sentiment among institutional observers."

David Park, Independent Trader: "This feels like a PR move to distract from the ongoing blame game about October. Buying the dip is one thing, but addressing the structural risks that caused the crash is another. The market needs transparency, not just big purchases."

Sarah Wilkinson, Fintech Journalist: "The debate between Xu and Qureshi highlights a core tension in crypto: are crashes caused by irresponsible products or by fragile, interconnected market structures? The truth likely involves both."

Raj Mehta, Crypto Skeptic & Software Engineer: "It's absurd. An exchange that was at the center of a multi-billion dollar liquidation spiral is now using its own fund to 'buy the dip' of the very asset that crashed? This isn't stability—it's a circular game with retail investors' money on the line. The whole system is built on confidence tricks."

Original reporting contributed by Anas Hassan at Cryptonews.com.