Original｜Odaily Planet Daily (@OdailyChina)
The price of BTC continues to weaken, and the crypto market once again reaches a critical point of confidence and liquidity. Meanwhile, a public opinion storm, almost carrying a sense of "liquidation," is rapidly spreading within the industry, with its focus directed squarely at Binance.
From "the market can only improve if Binance falls" to "the essence of the October 11 crash is fundamentally a Binance issue," it seems that as long as Binance is identified as the 'culprit,' all the industry's dilemmas have an answer.
But is the problem really that simple? Let's conduct an extreme thought experiment—if one day Binance really collapses, will the crypto industry truly become better?
The answer is written at the beginning: of course not.
The Death of the Industry's Largest Exchange: Either Due to Asset Theft or Regulatory Hammer
No matter how much imagination one exercises, it is almost impossible for Binance to die in the coming years due to mismanagement or industry competition. From profitability, cash flow scale, to the self-sustaining ability of its business lines, Binance has long been in the most stable structure of the crypto industry, being one of the few platforms that truly traverse bull and bear cycles.
So if we must discuss the potential scenarios for Binance's collapse, I can only think of two possibilities:
One possibility is that due to asset theft or unexpected impacts, Binance's massive reserve assets cannot be redeemed. After all, events like the FTX collapse and the Bybit hack are not far behind; risks such as North Korean hackers, social engineering attacks, and sudden black swan events always exist, and similar situations are not entirely impossible.
The other possibility concerns the regulatory power of sovereign nations like the U.S. government. Especially considering the upcoming midterm elections in the U.S., combined with recent events like the "ICE shooting incident" and "healthcare reform bill controversy," the Democratic Party may regain control of U.S. regulatory agencies, at which point Binance may also face a series of challenges and regulatory blows.
Based on these possibilities, let's boldly hypothesize about the various potential consequences following Binance's collapse.
After Binance Falls, No One Will Be Immune: Users, Assets, and Industry Confidence Will Face Devastating Blows
After Binance collapses due to asset damage or regulatory hammer, a storm of severe volatility will undoubtedly sweep through the entire crypto market.
Consequence One: Users Become Creditors, Massive Asset Losses
According to Binance's official data, Binance currently has approximately 307 million users worldwide. This means that currently, on average, 1 in every 27 people globally owns crypto assets. Considering the overall scale of the cryptocurrency industry is expected to be around 600-650 million people by 2025, it is not an exaggeration to say that Binance users account for nearly "half" of the total number of people in the cryptocurrency industry.
If Binance were to suddenly collapse, Binance users would be the most heartbroken group. Because regardless of the "cause of death" for Binance, it means that, like the FTX creditors still desperately seeking compensation, Binance users will also become "Binance creditors."
For countless individuals who have staked their lives and fortunes on Binance, this would undoubtedly be the most difficult situation to accept.
Consequence Two: Assets Stolen or Passively Destroyed, Market Faces Divergence Moment
After Binance collapses, depending on the different directions of asset flow, the market will also face a divergence moment.
If Binance's massive assets are lost due to a hacker attack, considering that hackers will quickly liquidate various mainstream coins including BTC, the crypto market will face a large-scale sell-off; to avoid the continuous decline in the price of tokens in hand, many industry holders will likely choose to sell quickly to minimize asset losses. At that time, the crypto market may experience a drop far more exaggerated than after the FTX collapse in 2022.
Another possibility is that Binance's reserve assets become difficult to withdraw due to unexpected situations, effectively being passively locked or destroyed. BTC and ETH may instead see a surge. After all, according to Coinglass data, Binance's exchange wallet holds approximately 650,000 BTC, accounting for about 3% of the total BTC supply; the total asset amount within Binance is as high as $142.27 billion.
Of course, Binance's sudden collapse would have even more severe consequences, resulting in indiscriminate blows to crypto institutions. Whether it is crypto VCs and investment institutions that have stored massive assets in Binance or market makers that bear the liquidity transfer bridge, once Binance collapses, they will face the awkward situation of asset freezing or being difficult to recover. The massive institutional assets involved will affect the liquidity pipelines across different segments and chains within the industry.
The ultimate result could likely lead to a series of chain liquidations, potentially lasting 2-3 years or even longer.
Consequence Three: Industry Confidence Exhausted, Regulatory Forces Strongly Enter
With Binance's collapse, the overall confidence of the crypto industry will also face a devastating blow.
After all, as the saying goes: "Confidence is more important than gold." As an emerging industry with a history of less than 20 years, the collapse of the leading cryptocurrency exchange will greatly shake the confidence of industry participants as well as traditional financial market practitioners and onlookers who were originally interested in participating in crypto investment.
The inevitable result will be the strong entry of regulatory forces—on one hand, the BTC strategic reserve plan will undoubtedly be indefinitely shelved by the U.S. government and other sovereign nations; on the other hand, regulatory compliance measures such as mandatory KYC and proof of reserve assets will become stricter.
The final result is that the simple and crude slogan you shout, "When one whale falls, everything else will thrive," cannot be realized: the collapse of Binance does not mean that Binance's existing users and new crypto users will gradually flow to other CEXs; rather, it may lead to small and medium-sized exchanges ultimately becoming unprofitable due to compliance costs and a sharp drop in user numbers, resulting in a chain of deaths. At that time, the scale of the cryptocurrency industry will inevitably shrink further.
"If Binance Dies": An Emotional Outburst of "Blame Shifting"
Returning to the initial proposition—will the crypto world become better after Binance collapses? Of course not.
The fact that Binance has reached today and become the de facto largest exchange in the industry is the result of a long-term game, a choice made by the industry and users together, rather than a stroke of luck in a particular cycle.
Whether in terms of depth, liquidity, or system stability and self-sustaining business capability, Binance's position is the inevitable product of years of accumulated advantages, pushed to this position through real transactions, real funds, and real user migrations.
However, when the industry as a whole enters a phase of narrative exhaustion, stagnation of incremental funds, and structural liquidity failure, the real problems begin to surface, and what cannot be quickly resolved is the industry's own supply mechanism and trading structure. The easiest target to bear the emotional outburst and become the "scapegoat" is naturally the "leader" at the forefront.
The current voices that seem eager to "bring Binance down first" are essentially not answers to the problem, but rather a highly emotional "blame-shifting explanation" under the inability to change the structural dilemmas of the industry.
But the reality is that even if Binance were to suddenly disappear at this moment, the crypto world would likely not become healthier; it would probably only become weaker, more chaotic, and more difficult to rebuild confidence.
Of course, to wear the crown, one must bear its weight. Being at the center of the industry means having to endure both the halo and the blame, and helping the industry find a way out is an inescapable role for Binance.
In the movie "The Smiling, Proud Wanderer," before his death, Ren Woxing tells Linghu Chong: "Do you think that killing me will bring peace to the martial world? Dongfang Bubai is ten times more ruthless than I am."
In the crypto world, we are more or less all somewhat helpless.
And what is truly worth asking repeatedly is never "who should be brought down from the pedestal," but rather, after the old narrative fails, what can this industry rely on to continue moving forward.
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