Binance USD stablecoin loses $2 Billion in a Month, Token Mismanagement to Blame?

The post Binance USD stablecoin loses $2 Billion in a Month, Token Mismanagement to Blame? appeared first on Coinpedia Fintech News

The third largest stablecoin, Binnace’s BUSD, has seen its circulating supply drop by a margin of $7 billion in less than a month. According to aggregate data provided by Coingecko, BUSD has a market capitalization of approximately $15,567,358,149 and a 24-hour trading volume of about $12,233,687,375.  Mid-December BUSD enjoyed a market share of about $22 billion but suddenly plunged at the beginning of the year.

Interestingly, Bitcoin price has rallied at the same time that BUSD’s circulating supply has plummeted. Rumors have it that Binance is behind the recent Bitcoin pump as miners dump digital assets to take a profit. Moreover, Binance is one of the largest cryptocurrency miners worldwide by hash rate.

Closer Look at Binance’s BUSD Market

Reportedly, while Binance’s BUSD has seen a reduction in circulating supply, the top stablecoin USDT has seen a steady increase in the past two months. As a result c analysts believe BUSD value has been offloaded to Bitcoin while USDT has been shorting the asset.

Binance crypto exchange has been accused of playing dirty with its huge global dominance. Earlier this month, blockchain research firm ChainArgos found that Binance-peg BUSD was not always fully backed by reserves during 2020 and 2021. To the surprise of many, Binance acknowledged the breach and said it has fixed them.

Nonetheless, Binance’s BUSD has a vibrant on-chain activity from over 6.1 million global users. Notably, the company offers a stable 6 percent APR on locked BUSD and zero conversion fees to Tether USDT and Bitcoin. Last year, the company announced that all stablecoins deposits on the Binance exchange will be converted to BUSD at a ratio of 1:1.