Binance pledges $1 billion fund to bitcoin as market tanks to months-low

Binance announced that it will convert $1 billion in stablecoin reserves held in its Secure Asset Fund for Users (SAFU) entirely into bitcoin over the next 30 days.

In an open letter published Friday, Binance said this decision was made to support the industry through market cycles and periods of uncertainty, emphasizing its continued belief in bitcoin's long-term value. SAFU was established to protect users against losses from unexpected incidents like hacks or platform issues.

To address potential volatility from holding bitcoin instead of stablecoins, Binance said it will conduct regular audits and rebalancing of the fund based on market value. 

"If the fund's market value falls below $800 million due to BTC price fluctuations, Binance will rebalance the fund to restore its value to $1 billion," the exchange wrote.

This decision arrives amid a sharp downturn in bitcoin's price. According to The Block's bitcoin price page, the world's largest cryptocurrency fell 7% in the past 24 hours to $82,000, marking its lowest level since November last year.

The selloff has been driven by various factors, including rotations into precious metals like gold and silver, geopolitical tensions such as U.S. tariff announcements, a broader risk-off sentiment in the equities market, and continued outflows from bitcoin exchange-traded funds.

Other cryptocurrencies have followed suit, with ether down 8.23% to $2,707, XRP down 7.9% to $1.74, and Solana falling 8% to $113.45. According to Coinglass liquidation data based on available sources, around $1.7 billion worth of crypto positions were liquidated in the past 24 hours, with $1.59 billion coming from long positions.