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Binance – the world’s largest and most popular digital currency exchange – is converting more than $1 billion of its stable currency BUSD (Binance USD) into bitcoin, Ethereum, and various other digital assets.
Binance Is Converting a Lot of Its Stable Asset
The news came about in a tweet issued by the company’s CEO Changpeng Zhao, who stated:
Given the changes in stablecoins and banks, Binance will convert the remaining of the one billion Industry Recovery Initiative funds from BUSD to native crypto including BTC, BNB, and ETH.
The goal is to help crypto companies and banks that are not necessarily in danger of collapsing altogether, but that are enduring liquidity crises. This should ring bells given that Binance was initially set to aid FTX – the now defunct crypto exchange – out of a liquidity crisis in November of last year, though plans for doing so fell through after Binance looked at the problems FTX was facing and decided they were too big to assist with.
The news of the financial conversion Binance is initiating comes at the height of several bank failures, including those – such as Silvergate and Silicon Valley Bank – that were friendly towards crypto and tech enterprises. These failures have been labeled, by some analysts, as among the worst since the 2008 financial crisis and Great Recession.
However, there’s likely additional fear in the mix given Silicon Valley Bank housed the reserves of Circle’s USDC coin, another stable asset similar with BUSD. During all the hype and hoopla surrounding the bank’s closure, it appears Circle’s stable coin lost its peg to the U.S. dollar.
The loss was temporary and USDC has since regained its peg (in other words, a dollar of USDC is again worth $1 in USD), though it’s likely Binance is beginning to feel the heat given it’s come to the point where not even stable assets are fully safe, and thus the conversion in question is a means of ensuring the exchange can remain steady.
Let the Market Heal Some More…
Despite all this, bitcoin – as we reported earlier today – shot up by more than nine percent and added about $3,000 to its price over the course of just a few days. The move is a true testament to the growing strength and stability of the world’s number one digital currency by market cap, and many traders believe the final reigning hours of the 2022 crypto bear market may officially be at their end.
Still, however, crypto fans might want to take things slow for a little while to ensure the space is where it should be. Maybe let things move along at a slower, more incremental pace and see if perhaps the current bull run is likely to continue as when one company falls, there’s usually another that will follow in its footsteps.