Understanding the whole story of Binance's reduction of BTC, BTC, SOL, and SOL events in one article: 🟨 What assets did Binance reduce its holdings of? BTC holdings: decreased from 46896 to 2747, a decrease of 94.1% BTC holdings: decreased from 216313 to 175, a decrease of 99.9% Other assets: SOL holdings decreased by 99%, USDT almost cleared (decreased by 99.9%), and SOL's reduction ratio was relatively low (16.6%, valued at approximately $615 million). USDC increase in holdings: holdings increased from 805 million to 1.268 billion, an increase of 57.5%, with an appreciation of approximately $463 million. Brothers, please note that these assets are held by the Binance platform itself and do not involve user funds. 🟨 Why is Binance reducing its holdings? At the beginning of the year, Shenyu pointed out that such operations may be a routine financial action for Binance to make profit provisions at the beginning of the year. Similar reduction actions occurred in June 2023 (with a $4.3 billion settlement agreement reached with the US Department of Justice) and February 2024, which may be related to compliance financial adjustments. Dealing with regulation and fines, this wave of operations is likely to be in response to potential fines or legal disputes from US regulatory agencies. Previously, Binance was sued by the SEC for issues such as mixing customer assets and allowing US users to use international platforms, and had paid high settlement fees. Recently, the SEC and Binance jointly applied for a 60 day suspension of litigation, and regulatory pressure may prompt Binance to prepare liquidity in advance. Enhancing liquidity to cope with market fluctuations and converting highly volatile cryptocurrency assets into stablecoin USDC can help improve the liquidity of platform funds and reduce the impact of market volatility on self owned assets. 🟨 Historical background and market influence Regulatory pressure has existed for a long time. In fact, since 2023, Binance has continued to face investigations and lawsuits from US regulatory agencies, including SEC allegations of unregistered securities trading and mixed client assets. In May 2023, founder Zhao Changpeng planned to reduce his holdings to improve his regulatory image. Capital outflow and trust issues: In early 2023, Binance experienced a $12 billion capital outflow due to the FTX crash, causing BNB's market value to shrink by 29% and the market's trust in it to decline. This reduction in holdings may further raise investors' concerns about the stability of the platform. The market reaction, although the reduction mainly involves self owned funds, has a significant impact on market prices, mainly due to the news effect. In fact, Binance's strategic adjustments under regulatory pressure and market volatility may be driven by core factors such as financial provision, liquidity management, and compliance preparation. Although it may raise market doubts in the short term, it also demonstrates Binance's emphasis on risk control. Brothers can rest assured.