Binance Coin (BNB), the digital currency of Binance Exchange and Smart China Network, has fallen victim to the New York Department of Financial Services (NYDFS) decision to stop minting the BUSD stablecoin.
According to Valx and quoted by Ambcrypto, it was inevitable that Binance Coin would be hit by this incident.
The report of the Sentiment site shows that the volume of Binance Coin transactions has reached its highest level since last December following this news.
But what does the future hold for Binance Coin?
Normally, the volume of transactions is the only record of the number and size of transactions made in a period of time, but the abnormal increase in volume following this news is more proof of investors’ risk aversion and the sale of Binance Coin to avoid bearing more risk.
As CZ rightly pointed out in his tweet, BUSD’s market value will gradually decrease as investors withdraw. But remarkably, this may happen sooner than expected.
The reason for this prediction is the behavior of digital currency sharks and whales. According to Sentiment data, addresses with between $1,000 and $10 million BUSD withdrew a total of $200 million BUSD from their wallets in the last 24 hours. The decline in the value of the Binance dollar from one dollar can be one of the factors that accelerate this.
As expected, BUSD competitors such as Tether (USDT), Circle (USDC) and Dai (DAI) all benefited from this event.
Meanwhile, the NYDFS revealed its reasons for the decision. According to the body, Pexos – the BUSD multiplier – has had unresolved issues. This department considered these problems to be related to the lack of BUSD permission in any blockchain except the Ethereum network.
Nevertheless, the institution announced that it will monitor the process of the BUSD redemption by Pexos. Pexos is required to exchange the minted BUSD tokens at a 1:1 ratio with USD from customers who pass compliance protocols.
Following this, the Binance Coin Funding Rate Index decreased. This indicates that investors are less optimistic about the future of Binance Coin. Also, the negative figure of this index means that the weight of “short” orders is shifted to “long” positions.
Finally, if the “fad” about Binance ends in the coming days, the hope of improving the price of Binance Coin will go away, otherwise, the decrease in the value of BNB can continue.
What are the consequences of the end of Binance dollar activity for BNB? The first time in the blog Valx. appeared.
