Major cryptocurrencies erased losses and turned higher after Binance Holdings Ltd.’s Chief Executive Officer Changpeng Zhao said the world’s largest digital-asset exchange plans to set up an industry recovery fund.
Zhao said Monday the goal was to “reduce further cascading negative effects” of the bankruptcy of rival exchange FTX, adding the fund will assist otherwise strong projects that are facing a liquidity squeeze.
Bitcoin spiked higher after Zhao’s tweet and was pushing toward $17,000 as of 7:34 a.m. in London after a 2% gain. It had earlier come in sight of the year’s low following a 3.4% intraday drop. Solana, a token associated with Sam Bankman-Fried’s broken FTX empire, snapped a three-day retreat to add 7%.
Zhao didn’t mention how big the fund might be. He invited other industry players to “co-invest” and said more details would follow. FTX’s wipeout continues to cast a long shadow after lopping about $200 billion off crypto market value in the past week.
While investors remain vexed about the risk of wider contagion, they seemed to seize on the Binance plan as an excuse to buy tokens, despite the lack of granular information. Meme token Dogecoin — an arbiter of speculative appetite — captured that shift in mood, adding around 4%.