BUSD on the footsteps of Bitcoin?

The bear market has not finished affecting crypto companies. While some analysts are predicting a crypto bull run, the reality is quite different. Binance’s current situation proves it. The crypto exchange is going through one of the darkest times in its history. The market cap of its stablecoin Binance USD (BUSD) is in free fall.

The BUSD stablecoin is at its worst

BUSD: A market cap of less than $10 million

On November 15, 2022, the BUSD reached an all-time high with $23.49 billion in market capitalization. Within months, the numbers plummeted. According latest reports indeed, BUSD currently has a market capitalization of less than $10 billion. Which brings us back to an exponential drop of around 40%.

Opinions remain extremely divided as to the possible reasons for this downward trajectory of the BUSD market capitalization. According to some, the regulatory crackdowns in the United States have something to do with it. For others, this is explained by the legal case between Paxos and the SEC. On February 12, the American crypto regulator forces Paxos to end the issuance of stablecoin BUSD.

Another possible cause of the Binance USD crash: the withdrawal of the stablecoin from Coinbase as of March 13. According to this crypto exchange, BUSD does not meet listing standards.

The crash is not far away

For several hours now, we have seen a wave of liquidation of the BUSD. More and more investors are choosing to convert this stablecoin to USDT. This necessarily affects the financial performance of the crypto exchange.

Launched in September 2019, this stablecoin was yet among the top three. Today, Binance USD (BUSD) finds itself in the 10th position in the ranking of the largest stablecoins in terms of market capitalization. On one of his tweet of February 14, the CEO of Binance had already even considered such a situation. According to Changpeng Zhao, BUSD might fail in its first deployment.

The downtrend is not just affecting BUSD. This concerns almost all crypto companies. Hopefully the stablecoin will quickly climb the slope. To be continued…

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