The introduction of stablecoins, like BUSD into cryptocurrency brought hope to many long-term investors. For those skeptical of the crypto space due to volatility, stablecoins become handy as their sailing means.
As the name goes, stablecoins are meant to remain stable to the real-time value of the fiat currencies they are pegged to. Also, some come pegged to tangible assets and cash that facilitate their stability.
But the collapse of the algorithmic stablecoin, TerraUSD UST, and its native token, LUNA, created a big hollow for stablecoins. It shifted the paradigm for lots of investors on what stablecoin stands for. The event brought massive losses to many investors and other crypto assets.
Thankfully, people have started warming up to stablecoins again lately. The Binance USD (BUSD), the world’s third largest stablecoin, is significantly impacting the crypto space. BUSD recorded a massive increase of about 70% on Tuesday in its trading volume. It remains the most considerable 24-hour trading volume recorded in recent times.
Binance Announcement Triggered BUSD Trading Volume
The sudden spike in trading volume for BUSD has raised lots of interest as people are looking for the potential trigger. The reason is not far-fetched, as Binance recently made a big public announcement.
Crypto total market cap trends downwards on the daily chart | Source: TradingView.com
Binance is laying out BUSD Auto conversion. At the moment, the firm mentioned that it would be for the existing balances of customers on the platform. The conversion process will be on USDC, TUSD, and USDP stablecoins.
Binance reported that it would be using a fixed ratio of 1:1 for the conversion. This process is to kick off by September 29, 2022. It noted that the new move is to increase liquidity and capital efficiency for its users. This will enable customers to trade conveniently with their consolidated BUSD balances on the platform.
Effect Of Binance Announcement About USDC
Further, in its statement, Binance mentioned that the conversion process would not affect withdrawals on its platform. However, the exchange will stop other USDC-related functions like leverage, spot, and payment.
Hence, BUSD witnessed a whopping rise of 70% in trading volume over the last 24 hours following the announcement. At the time of press, BUSD trading volume hit $8.4 billion with a market cap of over $19.4 billion. Similarly, the USDC trading volume increased by 20% over the last 24 hours to $7.06 billion.
To increase both the coverage and utility of BUSD, the Binance announcement came as a massive attack on USDC. As the second largest stablecoin, USDC boasts a market cap of about $51.8 billion. It is striving even to overtake USDT as the leading stablecoin.
After the fall of the Terra ecosystem, USDC has received lots of applause for having the best backing.
Featured image from Pexels, chart from TradingView.com