Binance CEO says $2.37 billion moved from BUSD to Tether after Paxos-issued stablecoin suffers de-peg
- Binance USD suffered a depeg and the stablecoin dropped from its $1 peg to $0.9897 after the regulatory crackdown on Paxos.
- BUSD holders are pulling out their funds and moving into other stablecoins, severely drawing down the asset’s market capitalization.
- The BUSD exodus does not appear to have much of an impact on Binance’s Smart Chain or BNB as of February 17.
Binance USD, the dollar-pegged stablecoin that was previously issued by Paxos has suffered a de-peg. BUSD’s market capitalization declined as traders pulled capital from the token and moved it to Tether USDT.
Changpeng Zhao, the CEO of Binance took to Twitter to distance itself from the stablecoin issuer Paxos. Capital from BUSD is rotating into other stablecoins, as it losses relevance among market participants.
Also read: Binance becomes SEC’s latest target after Kraken, Coinbase and Paxos, but markets remain strong
Binance USD suffers depeg with regulatory crackdown on issuer
Binance USD (BUSD), a US Dollar-pegged stablecoin issued by Paxos suffered a de-peg on February 17, dropping from its $1 parity to $0.9897. BUSD had also suffered a temporary de-peg on February 14, in response to the US financial regulator’s crackdown on Paxos.
BUSD price chart
As seen in the chart above, the US Dollar-pegged stablecoin has lost its $1 parity on several instances since the issuer received notice by financial authorities to halt BUSD issuance.
While the de-peg and the declining market capitalization have caused uncertainty among market participants, Binance continues to distance itself from issuer Paxos.
Changpeng Zhao, Binance CEO addressed BUSD’s declining market capitalization in a recent tweet. CZ noted that BUSD market capitalization dropped from $2.45 billion and most of this capital has moved into USDT.
CZ reminded his 8.1 million followers that BUSD is not issued by Binance. The crypto stablecoin landscape is shifting.
BUSD market cap dropped -$2.45B (from 16.1B to 13.7B as of now), and most of it has moved to USDT.
— CZ Binance (@cz_binance) February 17, 2023
USDT marketcap + 2.37B (From 67.8B to 70.1B)
USDC also declined -739M (from 42.3B to 41.5B)
Landscape is shifting.
(Note: BUSD is NOT issued by Binance.) pic.twitter.com/kVrZUYjuOh
Based on analysis from crypto intelligence tracker, BUSD holders withdrew 2.142 billion worth of the stablecoin from exchanges within the last four days. It was expected that outflows would negatively influence Binance’s native token BNB and its smart chain BSC.
BNB price held steady despite FUD in the crypto ecosystem
BNB price has held steady and Binance’s native token is fighting the Fear, Uncertainty and Doubt (FUD) among market participants. The BUSD exodus does not appear to have had much of an impact on BNB, as of February 17.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
