Binance has initiated its plan to convert the $1 billion Secure Asset Fund for Users (SAFU), traditionally held in stablecoins, into a Bitcoin-denominated reserve, deploying approximately $100 million worth of BTC in the first tranche of the strategy amid a market downturn.
Crypto exchange Binance executed the first phase of its announced SAFU fund conversion by moving approximately 1,315 Bitcoin — worth about $100 million — into its SAFU reserve on February 2, according to on-chain data. This transfer marks the beginning of a broader effort to shift nearly $1 billion of stablecoin holdings into BTC over the next 30 days, aligning the fund’s reserve currency with what Binance sees as the core long-term store of value in the crypto ecosystem.
The SAFU fund, established in 2018 as a user protection pool funded by a portion of Binance’s trading fees, has traditionally held stablecoins such as USDC and previously BUSD to maintain liquidity and capital certainty. With this conversion strategy, Binance is effectively backing its emergency reserve with Bitcoin — an asset that is volatile in the short term but widely regarded as central to digital finance — rather than a dollar-pegged asset.
Strategic shift as BTC dips below key levels
Binance says the fund will continue to serve as a backstop for users in extreme events or losses, even after the shift to BTC, and has committed to rebalancing the fund back up to $1 billion if market volatility causes its value to dip below a set threshold. This introduces new risk dynamics, as the reserve’s value will now fluctuate directly with Bitcoin’s price.
While initial speculation suggested the $100 million BTC allocation might involve market purchases, blockchain data indicates that Binance transferred Bitcoin it already held from internal wallets into the SAFU address, suggesting this first tranche was an internal reserve reclassification rather than an open-market trade.
The conversion plan comes at a time when Bitcoin has recently briefly traded below $80,000 during a broader market sell-off, drawing attention to Binance’s timing as the exchange repositions user protection assets into a risk-exposed format.
With about $900 million still to be converted, Binance’s strategy may have implications for market structure and participants’ perception of BTC demand, depending on whether future tranches are executed via internal transfers or involve dynamic purchases if prices fluctuate significantly.
Overall, this move highlights Binance’s long-term conviction in Bitcoin’s role within the crypto ecosystem, while also raising discussions about the trade-offs between stability and crypto-native reserve backing in user protection funds.
