Recent events where the SEC put pressure on major crypto brands are forcing whales to move away from the 2 altcoin projects. Crypto whales are struggling to find safe haven amid regulatory uncertainty.
Altcoin whales are undecided about which stablecoin to choose
Recent events show that the US regulator SEC is stimulating the crypto market by designating the Binance-branded stablecoin BUSD as a security. According to data from crypto analytics firm Santiment, the SEC’s action is causing concern among whale owners of BUSD, as reflected in an indicator of fear in the charts.
The indicator of fear shows that BUSD whales oscillate between Circle-backed USDC and BUSD following the SEC’s lawsuit. The analytics firm noted that the uncertainty has led to a decline in the whales’ overall supply of BUSD.
🔁 3 weeks ago, the #SEC labelled $BUSD as an unregistered security, causing panic amongst whale holders of #Binance's native #stablecoin. This chart is reflective of a fear indicator regarding the lawsuit, as whales fluctuate between $USDC and $BUSD. https://t.co/1fbkq9SMru pic.twitter.com/rCRUDDnbhJ
— Santiment (@santimentfeed) March 2, 2023
Also, data from Coinmarketcap shows that BUSD has lost around 10 billion in market cap following the restrictive move by the SEC. BUSD had a market capitalization of approximately $17 billion as of January 1, 2023, ranking seventh in terms of market capitalization.
With recent events, BUSD is almost out of the top 10 as it has fallen below Dogecoin (DOGE) in terms of market cap. Conversely, other cryptocurrencies such as Tether USD (USDT) and Binance Coin (BNB) have benefited significantly from the regulatory pressure on BUSD.
USDT and BNB pick up volume after SEC move
The market capitalization of the two stablecoins has gained $5 billion in volume from January since the SEC sent a Wells Notice informing the BUSD-authorized company Paxos about its enforcement action for selling unregistered securities. Meanwhile, BUSD’s market cap was pushing the lows of the past two years.
BUSD’s market cap drops to this level for the first time in 2 years
Binance USD (BUSD), the world’s third-largest stablecoin by market capitalization, has shrunk significantly over the past few weeks. BUSD started the year with a market cap of $16.5 billion. At the time of writing, the figure has dropped more than 40% to $9.6 billion, the lowest in two years.
Binance CEO Changpeng Zhao confirmed on February 17 that the market cap lost by BUSD has shifted to Tether (USDT), the world’s largest stablecoin.
BUSD market cap dropped -$2.45B (from 16.1B to 13.7B as of now), and most of it has moved to USDT.
USDT marketcap + 2.37B (From 67.8B to 70.1B)
USDC also declined -739M (from 42.3B to 41.5B)
Landscape is shifting.
(Note: BUSD is NOT issued by Binance.) pic.twitter.com/kVrZUYjuOh
— CZ 🔶 Binance (@cz_binance) February 17, 2023
CZ also claimed that sentiment in the market has changed. As for the controversy surrounding his trades and offers, Zhao suggested that these were attempts to trigger FUD. cryptocoin.com As we reported, global media company Forbes claimed in a news report during the week that Binance used user funds improperly without any permission. However, SEC Chairman Gary Gensler reiterated his stance on March 2 that cryptocurrency exchanges should not be viewed as safe and qualified guardians.
