Binance recently suffered a major $6.3 billion hack, the largest in the history of the cryptocurrency industry. As expected, the incident sent shockwaves through the industry, and Bitcoin (BTC) and altcoins headed south.
However, the losses turned out to be far less severe than many expected, with the market even rebounding after Binance showed it could handle the situation by reinstating withdrawals and covering the damage through its SAFU fund and its own reserves. But what would happen to cryptocurrencies if the giant filed for bankruptcy and no longer operated? Here’s what three of the most popular AI-based chatbots had to say about it.
Major disaster?
ChatGPT said a disorderly Binance collapse could send BTC down 30-50% from its pre-event price, while many altcoins could crash by as much as 80%. He explained that such a collapse would trigger two shocks at once: people would sell in panic and fewer businesses and individuals would be able to buy.
“Bitcoin would most likely fall because it is easier to sell than smaller assets. A trading company with money trapped on Binance could sell Bitcoin held elsewhere to meet its obligations. So the first wave would hit even assets without direct exposure to Binance.”
According to ChatGPT, the token most affected in a crisis like this would be BNB. The chatbot estimates that it could lose up to 95% of its value since it is used for network fees and staking within the ecosystem.
The OpenAI platform explained that such a black swan event would likely have a huge impact on the entire industry, making it smaller, more fragmented and more custody intensive.
“Immediate winners would likely be platforms already offering significant liquidity, reliable withdrawals and institutional access. Activity would migrate unevenly between countries. Independent custody and arrangements that allow companies to trade without depositing their entire balance with an exchange would become more attractive. Some users would prefer to maintain control of their assets, although smart contract failures, liquidation risks and centralized infrastructure would persist,” he said.
In conclusion, ChatGPT said that BTC would have a better chance of recovering from the disaster than the average altcoin, while surviving exchanges could eventually replace Binance’s trading capacity.
Perplexity said that if Binance were to go bankrupt, the crypto market would likely face a severe short-term liquidity and confidence shock, likely worse than the collapse of FTX in 2022.
“Bitcoin, Ether, BNB and especially smaller altcoins would likely sell off as traders rush to exit through other venues. BNB would be particularly exposed as it is closely tied to the Binance ecosystem,” he said.
The chatbot claimed that in a bad scenario, assets on the stock market could be frozen for years while creditors, regulators and courts resolve claims.
Gemini Outlook
Google’s AI-powered chatbot noted that Binance remains the largest cryptocurrency exchange and, as such, its sudden collapse could trigger a price drop of around 65% for BTC and up to 90% for top altcoins.
He said the leading cryptocurrency would hold up better due to its institutional adoption. Financial giants like BlackRock, Fidelity, Invesco, Franklin Templeton and others have launched BTC spot ETFs in recent years, and their cumulative net inflows have exceeded $56.5 billion.
Additionally, Gemini claimed that a Binance collapse would end the “mega-exchange era”, suggesting that no platform would ever again be allowed to capture more than 30% global market share.
The article What would happen to the crypto market if Binance went bankrupt? 3 AI Speculates appeared first on CryptoPotato.
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