Is Bitcoin too centralized now to succeed? Binance’s grip raises new red flags!

Key Points

1. Binance holds over 20% of Bitcoin reserves, maintaining dominance in price discovery and increasing market fragility.

2. The exchange's liquidity concentration amplifies its influence over funding rates, order book deltas, and liquidation cascades.

3. Analysts warn that heavy reliance on ETFs and concentrated reserves could build structural risks not yet factored in by most investors.

4. On-chain analyst Willy Woo cautioned that hidden systemic risks at the nation-state level could trigger shocks, especially during market downturns.

5. Binance's reserve ratio is a critical market signal, affecting supply replenishment and bullish momentum unless spot demand remains strong.