Binance USD (BUSD) The stablecoin continues to lose ground against other stablecoins, having lost over $2 billion in market capitalization over the past month.
At its low on Wednesday this week, BUSD’s market cap reached $15.3bn, down more than $2bn from its $17.5bn market cap on the same date in December.
The decline in market cap for BUSD is notable as no similar decline has been observed for other major stablecoins over the same time period Tether (USDT) And usd coin (usdc), However, a possible explanation for the offloading of BUSD could be related fear following the collapse of Binance. ftx,
Back in the middle of December last year, Binance saw withdrawals from its platform Traders feared that the exchange could face a similar fate to FTX, as more than $3 billion was lost in a matter of just 24 hours. The flurry of withdrawals caused Binance CEO Changpeng Zhao, better known as CZ, to come out and reassure users that all was well with exchange
According to CZ, some people attacked Binance not because there was something wrong with it, but because they didn’t like the centralized platform. CZ said at the time, “Even if someone helps CEX drive faster crypto adoption, they just hate CEX.”
Community speculates on BUSD market cap
On Twitter, some members of the crypto community are now speculating that most of the buying pressure has been seen bitcoin (btc) Since the year started with BUSD.
From lows around $16,500 at the start of the year, bitcoin has now consolidated around $23,000 in recent days.
Among those who hinted that the unusual bitcoin buying activity may have come from the bus was popular Twitter user @noblemillions, who asked “Why are they doing this?”
Other users have also commented on the situation, with one popular bitcoin analyst claiming BTC’s rise from $17,000 to $23,000 was “completely pumped with BSD.”
The massive buying of BTC with BUSD would explain the decline in BUSD’s market cap, as there would be less demand to hold the stablecoin – all else being equal.
BUSD not issued by Binance
One thing to note about BUSD is that the stablecoin is not issued by Binance itself, but by Paxos Trust Company using the name of Binance.
Paxos is a regulated trust company in the US that regularly publishes detailed reports on the backing of its issued stablecoins. according to latest evidence report good From November 2022, BUSD is fully backed by a combination of US government bonds and the US dollar.
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