Binance cuts off $10 billion venture capital arm, BNB price takes 6% loss
|- Binance Labs is now an independent entity after the Venture Capital firm ended its ties with the cryptocurrency exchange.
- The venture capital firm has 14x returns on its investments in Web3 and crypto projects.
- Binance-backed BNB token observed a 6% decline in its price on Friday.
Binance, one of the largest crypto exchanges by trade volume, has distanced itself from its Venture Capital arm, according to a Bloomberg report published on Friday. The exchange has previously made headlines for its $4.3 billion settlement with the US Department of Justice and for its decision to end support to the Binance-branded stablecoin BUSD.
BNB price hit a low of $540 on Friday, yielding 6% daily losses for holders.
Also read: Binance likely to face another lawsuit for violation of US securities laws
Binance exchange and VC arm sever ties
Crypto exchange Binance has noted several changes since the exchange settled charges brought against it by the US Department of Justice (DOJ). Binance’s newly independent venture capital arm has a portfolio worth over $10 billion and covers more than 250 Web3 and crypto projects.
The VC firm’s return on investment is 14x, according to an official blog post by Binance Labs on March 12. Bloomberg’s report reveals that the exchange quietly separated from the VC arm.
The exchange is now a separate entity, so the spinoff has hit the price of Binance-backed native token BNB.
BNB price sees 6% decline on the day
Binance exchange’s native token BNB wiped out gains from early this week and there is a likelihood of further correction to $480 before the token attempts a recovery. In its uptrend, BNB price created several imbalances, the ranges of which are yet to be filled. In its correction, BNB could find support at $500 and $480, within two Fair Value Gaps (FVGs) as seen on the daily price chart.
BNB price could revisit the Range High at $633.50 if there is sustained buying pressure from traders.
The Relative Strength Index (RSI) is at 70.71, meaning that BNB is currently at overbought or overvalued levels. This supports the thesis that BNB price could fall further.
BNB/USDT 1-day chart
However, a daily candlestick close above $600 could invalidate the bearish thesis and BNB could continue its climb towards the Range High at $633.50.
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