Martin Lee, a data journalist at Nansen has just made a claim involving the largest crypto exchange and two stablecoins.
According to the claim made by Lee, the largest crypto exchange Binance has shifted its focus from accumulating Binance USD (BUSD) to USD Coin (USDC).
Lee reportedly backed his claim with statistics involving BUSD and USDC on the Binance exchange. He has claimed that in the running week, a significant rise has been noticed for USDC on the Binance exchange.
As per his findings, the exchange seems to be increasing its investments in USD Coin instead of its native stablecoin, BUSD.
It is very surprising to see that the Binance exchange has shifted its interest in acquiring USDC from BUSD, the stablecoin issued by the exchange itself.
He has claimed that the exchange has shifted its interest due to the latest reports and news involving BUSD.
USDC Accumulation has risen on Binance
The data journalist reportedly shared his findings on the USDC accumulation by the exchange. He revealed that in a matter of 7 days, the value of USDC held by the Binance exchange has been pushed up by $1.5 billion.
He tweeted that it is a massive accumulation by the exchange for any stablecoin.
Lee also made another prediction about the Binance exchange increasing its holdings for the largest stablecoin, Tether (USDT) as well.
As per him, Binance may be acquiring USDC for now but it may proceed with making USDT the primary stablecoin on its platform.
In the upcoming days, the exchange may increase its holdings for USDT compared to USDC. This would eventually boost the morale of the USDT investors who were concerned about the future of USDT due to several stablecoin market turmoil.
Why Binance will Increased Investments in USDT?
According to market analysts, Binance has a strong reason for increasing its holdings for USDT compared to USDC in the future.
The exchange had reportedly dropped all trading pairs that were once linked with USDC. At the moment, no other cryptocurrency is linked with USDC on the Binance exchange.
If the exchange decides to make USDC its primary stablecoin, it will have to reinstate multiple trading pairs for the stablecoin. Therefore, it will not proceed with setting up many trading pairs with USDC.
Instead, the exchange is getting itself away from all the unnecessary troubles and has decided to go for USDT. It was back on September 5, 2022, when the exchange had delisted all the trading pairs with USDC.
After removing the trading pairs, Binance proceeded with converting the remaining USDC on its platform to BUSD. This is something that Binance had let get processed automatically.
Just after two weeks of Binance auto-converting the USDC to BUSD, WazirX followed the same. It also removed the USDC from its platform and prior to doing so, it converted the USDC on its platform to BUSD.
3 Billion Binance USD Removed in a Single Day
It was reported on February 19 by several on-chain data analytical firms that almost 3 billion Binance USD had vanished from the market. It means that they were converted to other stablecoins.
As of today, the number has increased from almost 3 billion BUSD to 3.55 billion BUSD. The disappearance of the BUSD has increased ever since Paxos announced its move pertaining to the stablecoin.
Paxos has announced that it is no longer going to mint and issue BUSD. It happened after the US regulatory authorities went after the Paxos platform, launching scrutiny.
Even now, BUSD exists as the third-largest stablecoin and has a valuation that is well over $5 billion. The next stablecoin after BUSD in terms of valuation is DAI, which has a market valuation of $5 billion.
It is still very alarming that a stablecoin that was once on the right track to becoming the top asset has lost its traction. It has come under great pressure and is still trying to get out of it.
From the looks of it, BUSD is not going to survive through the difficult times and has no backup from Paxos.