Turmoil at the Top: Shorting Binance Starting to Look SAFU

Table of Contents

Estimated reading time: 0 minutes

Turmoil at the Top: Shorting Binance Starting to Look SAFU

Binance was the largest cryptocurrency exchange, but it is now cracking on its own foundation. The future does not look so “safu” for the world’s biggest centralized exchange. Could history repeat itself, or is this just another FUD round that Binance will overcome, putting them truly to the test as the number one exchange?

FUD & Facts Binance

Less than a year after the collapse of its nemesis FTX, the global exchange Binance is experiencing the same kind of turmoil. It has seen large layoffs, its stablecoin market share has declined, and trust in the platform has weakened. After independent audits uncovered possible scenarios where the exchange uses its own issued tokens with limited liquidity in the market as proof of reserves to back up customers’ funds, questions have emerged. 

Also with rumors about Russian fake exchanges using Binance’s logo and reports of possible indictments by the DOJ that could follow, Binance is facing intense pressure from the ongoing crypto crisis stemming from FTX’s bankruptcy.

What has Binance’s co-founder said about the situation?

Binance co-founder Yi He wrote in a letter that “every battle is a do-or-die situation” as the exchange works to stabilize its business amidst the ongoing industry meltdown. These are hard words in a situation that is seemingly tightening around Binance’s neck.

Turning your Back to Binance? 

If investors lose trust in Binance, the normal response would be to distance themselves from all that the exchange offers. This means removing your coins and crypto to a self-custody wallet or considering moving them to another exchange. Taking either of these measures could enable you to leave the exchange smoothly, avoiding potential problems and putting you ahead of many others who may act out of panic if issues arise.

How to short Binance Coin – BNB?

However, another mean, could be totally different. You could choose to bet against the decline of the exchange and do frankly the same as with the FTT token of FTX. You short Binance Coin. This has to be done on a centralized exchange that is offering Binance Coin futures or trading with margin. An exchange such as Bybit

To short BNB, you would use a centralized cryptocurrency exchange that offers BNB futures or margin trading contracts, such as Bybit. Shorting BNB on an exchange allows traders to potentially profit if its price decreases. While risky, this approach presents an alternative to withdrawing funds from Binance if one is bearish on the company’s outlook.

BNB Chart

How to short Binance Stablecoin – BUSD?

Another product that can be shorted, though it carries greater risk, is Binance USD (BUSD) – the stablecoin issued by Paxos and listed on Binance. As a stablecoin, BUSD is typically less volatile than cryptocurrency assets unless it were to “depeg” from its target value of $1. 

Regulatory actions have placed BUSD under increased scrutiny, causing it to briefly depeg in the past. Since then, its market capitalization has fallen in the rankings, following a trend familiar among cryptocurrencies.

BUSD Chart

Where to short BNB or BUSD? 

That being said, if you are serious and want to take a position, you need to be aware that shorting can be done with leverage and leverage can kill your position. More on futures here

The centralized exchange where to short is Bybit, this is a reliable exchange that both offers BNB futures with USDC/USDT collateral as BUSD futures. 

It’s important to note that while exchange futures allow for short positions, leveraged trading carries additional risk. 

Disclaimer: Trading and investing in cryptocurrencies (also called digital or virtual currencies, altcoins) involves a substantial risk of loss and is not suitable for every investor. You are solely responsible for the risk and financial resources you use to trade crypto. The content on this website is primarily for informational purposes and does not constitute financial advice.

Are you ready to take your cryptocurrency trading to the next level?

Download our FREE Bybit guide!

ByBit Derivatives