Stablecoins were created to offer stability in the face of volatile crypto assets. You can hedge your money against inflation by using stablecoins. Today, about 15% of total crypto market value is held by stablecoins.
Numerous prominent companies have their own stablecoins. The stablecoins are usually pegged in a 1:1 ratio with major global fiat currencies such USD, EUR and GBP.
Binance USD (BUSD), a prominent stablecoin, is available from this crypto-exchange. It is the world’s third-largest stablecoin by market cap after Tether (USDT) and USD Coin (USDC).
Binance Committed to Pumping Supply of BUSD
Binance recently devised a method to raise the supply for its stablecoin BUSD. Binance sold USDC reserve and made BUSD. Frank Chaparro of the Block noticed a rise in BUSD supplies. From his observation, the stablecoin’s supply, for the first time, crossed $20 billion.
CoinGecko stated that the total supply reached an unprecedented $21.7 billion. This represents approximately 15% of the $147 billion cumulative stablecoin market value. Chaparro reportedBUSD is currently at 22% in its October denominated trades.
Binance announced in September that it is determined to increase BUSD supply. The company revealed the plan to convert the balances of existing and new deposits in TUSD, USDC and USDP into BUSD.
Stablecoins enter another war round
Following Binance’s conversion of USDC to BUSD, the CEO of FTX, Sam Bankman-Fried (SBF), has reacted with comments about stablecoins. According to the crypto billionaire, this new move has indicated signals of the ‘Second Great Stablecoin War.’
SBF pointed out that USDT and USDC were the winners in 2018’s first round of war. This was when USDT, USDC, and USDP surpassed TUSDP and GUSD. According to FTX’s chief, the reason for this difference is due to stablecoins making more profit at higher interest rates. It could be fascinating to speculate on the outcome of some stablecoins that have no fiat backing.
These included the likes of post-DAI-holding-USDC and post-LUNA. The crypto billionaire also stated that the current waves must be sustained in an interest-bearing manner, of which a contra turn would bring about crises.
Tether USDT still holds the position of largest stablecoin market capital. However, there’s a recent drop in its share due to regulatory issues, which diverted investors’ interest to its rival, USDC.
General Crypto Market Outlook
Many participants were disappointed that the recent crypto market price changes fell short of their expectations. Although the overall market saw a small increase of around 1.71% over the previous day, it seemed slow-moving.
Bitcoin soared almost $1.3% in the Asian trading session. Bitcoin’s price climbed to almost $1.3% after the session ended. However, it fell slightly shortly thereafter. Ethereum recovered to surpass the $1,500 mark.
Pixabay Featured Image, Charts from Tradingview