After a difficult year, traders are pleased to see the cryptocurrency market rebound. On traditional markets, the macroeconomic situation is not yet bullish. The crypto community was dealt a severe blow by the FTX collapse at the end of 2022. The altcoin rally is currently being driven by a shift in attitude.
What’s the Deal with BUSD?
Binance USD data on the chain shows an interesting trend in the context of market recovery following FTX-related liquidity concerns. Crypto Quant data shows a decline in BUSD reserves from December 12, 2022. This was the beginning of altcoin price pumping. The majority of investors transferred their assets to the Binance exchange due to concerns about FTX exposure leading to company closures. The decline in reserves showed that the situation had changed a few weeks later.
“$BUSD reserves have risen substantially since the FTX. It started to fall significantly on December 12. This is when altcoin started to pump. Market liquidity was unchanged, and Bitcoin began to lose its dominance.”
In the medium-term, this is not a positive sign for the crypto market. The current rebound is not due to a new influx of capital, as it was in previous bull runs.
In the past month, Binance’s USD stablecoin has seen a significant drop in market capitalization. Since December 14, the BUSD market cap curve has been steadily declining. The stablecoin has lost a staggering 40% of its market share from a peak of $24 billion right after the FTX meltdown.
