Binance Converting $1B in BUSD to Crypto: Is the Crypto Bear Over?

admin 16. April 2023

• 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.
• The news 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.
• Bitcoin shot up by more than nine percent and added about $3,000 to its price over the course of just a few days.

Binance Converting $1 Billion in BUSD

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. This was announced in a tweet issued by the company’s CEO Changpeng Zhao.

Purpose of Conversion

The conversion is meant to help crypto companies and banks that are not necessarily in danger of collapsing altogether but are enduring liquidity crises. It also serves as an insurance policy should any similar problems arise for BUSD itself due to bank failures like the closure of Silicon Valley Bank which housed Circle’s USDC coin reserves.

Crypto Bear Market Near End?

Despite all this, bitcoin shot up by more than nine percent and added about $3,000 to its price over the course of just a few days – seemingly indicating that analysts may be right in their belief that the final hours of Crypto bear market may officially be at their end.

FTX Liquidity Crisis

This news follows earlier attempts by Binance to help FTX – a now defunct crypto exchange – out of a liquidity crisis in November 2020. However plans fell through after Binance looked at FTX’s problems and decided they were too big for them to assist with.

Stablecoin Losses Temporarily Reversed

Though Silicon Valley Bank’s closure led to USDC temporarily losing its peg from USD – it has since regained it meaning one dollar worth off USDC still equals one dollar worth of USD again.