Binance Completes $100 Million Bitcoin Purchase for SAFU Fund Conversion

Binance Completes $100 Million Bitcoin Purchase for SAFU Fund Conversion

The Binance $100 million Bitcoin purchase for SAFU fund conversion has officially been completed, with the crypto exchange acquiring 1,350 BTC on February 2 at an average price of about $77,873 per coin. The transaction was executed as Bitcoin traded near nine-month lows, marking the first step in Binance’s planned $1 billion conversion into Bitcoin for its Secure Asset Fund for Users (SAFU).

Binance Targets Full $1 Billion SAFU Conversion

Binance said it aims to complete the full $1 billion SAFU fund conversion within 30 days of its January 30 announcement. The move follows rising community criticism after October’s massive liquidation event, which wiped out an estimated $19 billion across crypto markets.

Blockchain data confirmed that funds were transferred from 22 Binance wallet addresses to a designated SAFU address holding 1,315 BTC, with transaction fees kept extremely low at 5.017 satoshis per virtual byte.

Bitcoin Slump Triggers Massive Liquidations

The SAFU purchase comes amid heightened market stress, with Bitcoin falling below $80,000 over the weekend. The drop triggered more than $2.5 billion in liquidations, leaving many investors underwater.

Data shows the average U.S. spot Bitcoin ETF investor entered positions at around $87,830, while Bitcoin currently trades near $75,000, intensifying pressure on institutional holders.

Debate Erupts Over October Market Crash

The October 10 crash has reignited debate among industry leaders. OKX founder Star Xu blamed what he described as “irresponsible marketing campaigns,” pointing specifically to Binance’s 12% APY USDe program, which allowed leveraged loops using a synthetic dollar treated similarly to USDT and USDC.

Xu argued that leveraged conversions created artificial yields of 24% to over 70%, which were widely perceived as low risk due to their availability on major platforms.

Analysts Dispute Leverage Narrative

Dragonfly Capital partner Haseeb Qureshi strongly rejected that explanation, calling it “misplaced cause and effect.” He noted that Bitcoin prices bottomed 30 minutes before USDe showed any divergence, and that price issues appeared only on Binance, not across other exchanges.

Qureshi argued the more plausible trigger was macro-driven panic tied to Trump’s tariff threats, which caused API failures and prevented market makers from rebalancing positions.

Ethena founder Guy Young supported this view, citing order-book data showing USDe price discrepancies occurred after Bitcoin had already stabilized.

Market Structure, Not Trust, Under Scrutiny

While Xu maintained that structural leverage amplified the crash, other market participants defended Binance. DWF Labs’ Andrei Grachev said large exchanges naturally experience outsized events, while Wintermute dismissed claims of a “software glitch,” describing the episode as a flash crash in an over-leveraged market during low-liquidity conditions.

Bitcoin Tests Critical Support Levels

Bitcoin’s decline accelerated after confirmation that Kevin Warsh will become the next U.S. Federal Reserve chair. According to QCP Asia, BTC briefly dropped to around $74,500 after breaking key technical support, while ether fell below $2,170.

Galaxy’s Alex Thorn said U.S.-listed Bitcoin ETFs now hold about 1.28 million BTC, all at an average cost significantly above current prices, following $2.8 billion in net outflows over two weeks.

Bearish Outlook Gains Momentum

Market sentiment has turned increasingly bearish. Polymarket traders now assign a 71% probability that Bitcoin will fall below $65,000 in 2026.

CryptoQuant analyst Julio Moreno warned that Bitcoin could decline further, projecting potential lows between $56,000 and $60,000, based on realized price metrics.

Strategy Doubles Down Despite Losses

Strategy’s Bitcoin holdings of 712,647 BTC are now showing unrealized losses exceeding $900 million after prices fell below its average cost basis. Despite this, Michael Saylor added 855 BTC worth roughly $75.3 million, underscoring continued conviction amid volatility.

CryptoQuant data also shows rising volatility on Binance, with range z30 reaching +3.72, a level that historically precedes sharp price swings or widespread liquidation events.

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