Crypto assets dip as Binance settlement unfolds — but what’s next?

Binance settlement “an important part of clearing the way for the next bull market cycle,” crypto hedge fund executive says


vantireban/Shutterstock modified by Blockworks


Crypto asset prices dipped amid developments around a regulatory settlement between the US government and Binance — but various industry watchers believe the scenario is ultimately a boon for the space. 

Binance CEO Changpeng Zhao plans to step down and plead guilty to anti-money laundering violations as part of a multi-billion dollar settlement with US regulators, the Wall Street Journal reported Tuesday.

Read more: DOJ alleges AML, sanctions violations against Binance, CEO Changpeng Zhao in unsealed indictment

The report dropped just hours ahead of a Department of Justice press conference scheduled for 3 pm related to “significant” crypto enforcement actions. Set to appear are Attorney General Merrick Garland, Treasury Secretary Janet Yellen, CFTC chair Rostin Behnam and Deputy Attorney General Lisa Monaco. 

Binance Coin (BNB) was trading at about $239 at 1:30 pm ET — down nearly 7% from an hour prior, according to CoinGecko.

Bitcoin and ether fell below $37,000 and $2,000, dipping by 1.3% and 1.7%, respectively, in that one-hour span, the data shows. 

Despite the initial price drops, some industry watchers believe the Binance scenario could help further catalyze a crypto rally seen in recent weeks. 

Read more: Bullish or bearish? A wild 24 hours for crypto exchanges

Fineqia Research Analyst Matteo Greco said Zhao’s reported decision to step down — as well as Binance reportedly getting set to pay a $4 billion-plus fine — is ultimately positive for the crypto space.

“Any settlement between digital asset providers and regulators reduces the level of uncertainty in the market and increases the clarity in regards to a regulatory framework,” Greco told Blockworks. “Binance is the biggest crypto exchange and having some certainty that no further actions will be put in place by the US regulator ensures stronger stability to the market and closes another chapter of the battle between jurisdictions and the digital asset space.”

Jeff Embry, managing partner at crypto hedge fund Globe 3 Capital, said the reported Binance settlement is an important piece of “the fallout and clean-up of the bear market.”

“Bear markets wash out many of the bad businesses, business practices, inefficiencies and bad actors and is an important part of clearing the way for the next bull market cycle,” Embry added. “It tells future bad actors, or folks with their toes on the gray line, to clean up their act or else. All positives.”

Embry said he expects the price of bitcoin and other crypto assets to rise in both the short and long term. He pointed to examples in the equity market of companies — such as Apple, Microsoft and Wells Fargo — seeing their stock prices bounce back after legal settlements.

Bitcoin has rallied in recent weeks in part, some analysts say, due to increased optimism around SEC approval of a spot bitcoin ETF. 

Read more: Is bitcoin’s ETF-fueled rally to $35K premature? Well, maybe

Bitcoin (BTC) and ether (ETH) are up 122% and 64% year-to-date, respectively.

But Matthew Sigel, head of digital assets research at fund group VanEck, said: “It’s not a real bull market until the main characters from previous cycles exit and new ones emerge.” 

Bloomberg reported Monday that regulators could look to reach a deal that would allow Binance to continue operating. 

“The US government looks to have designed this settlement with continuity of service in mind, which appears to take the worst-case — a disorderly wind-down — off the table,” Sigel added. “Sounds bullish to me.”

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