bUSD, one of the biggest stablecoin in the crypto market has seen its market cap more than halve in the past two months from $16 billion in February to $7 billion.

Its price nonetheless remains very stable at $1 even as another $1 billion is taken off since just last week.

Some traders have been keeping an eye on an address they call the Binance Fund Wallet. One billion bUSD has gone from there, just $60 million left, and the question is of course to where.

There has been speculation Binance has been using it to buy bitcoin, and the pricing rise is due to that rather than the banking crisis or what plenty speculate is the end of the bear.

The facts however seem to indicate quite differently. First of all the address in question does not look like a Fund Wallet, more like a hot wallet.

It has carried out a pretty incredible 12.7 million transactions on the ethereum blockchain, a fairly typical sum for an exchange hot wallet.

You can see it buzzing with activity. Eth in, eth out, tons of tokens, but we managed to navigate our way and ended up here:

As can also be seen by other data, there is an ongoin mass redemption of bUSD, and it is going only one way because bUSD has been discontinued as its issuer, Paxos, was unwilling to stand up for the stablecoin and instead caved in to SEC.

Rather than any Binance coordinated action to turn bUSD into bitcoin, eth, or any other currency therefore, we seem to have more end users redeeming bUSD and of course the question is what are they redeeming them for.

There one can speculate they might be buying crypto, just as they could be moving to other stables, with it not too clear whether in the current situation where USDc t and other tokenized dollars are having calm operations, whether this bUSD redemption is having any effect on crypto.

It shows it was and is fully backed, it wasn’t operating on fractional reserves unlike risky banks, and that makes it evil in a way on the part of SEC to bully them when the public has very few options of such full backed assets.

It shows the stablecoin works, even to the end, with this being the first time we are seeing such discontinuation.

No crisis due to $16 billion being redeemed. By comparison, a $16 billion deposits withdrawals at the Silicon Valley Bank and Signature bank, who had in combination $300 billion in deposits, brought them both down. Or so the story goes.

And Binance is more than full reserves. Unlike reckless banks that paid SEC’s chair Gary Gensler his estimated $100 million net worth, Binance has a rainy day fund called SAFU.

Safe as FU? A play on wifu? Nope, it’s the Secure Asset Fund for Users (SAFU) and we can see all of it as it is on the blockchain.

The records for bitcoin show they did buy some, but back in November, at the very bottom when they added 8,325 BTC, about a quarter of a billion, for a total of 16,277 bitcoin.

They have another half a billion in BNB, Binance’s token. They added 200,000 BNB in November, and here they may have bought some recently as they added 130,000 BNB on the 17th of March for a total of 1.364 million.

They also have about $100 million of TUSD and USDt each, making the wifu SAFU fund more than $1 billion.

Why they didn’t give some pennies out of it to Paxos to fight SEC, is a mystery, but the token is going, bUSD, and the market doesn’t seem to care much as afterall it was a fairly stupid business decision to just shut down $16 billion without even one objection melord.

There are plenty of alternatives however, and there are now regulated European alternatives in EUROe among others.

So while bears try lick their wounds with behind the curtain theories, the available facts here seem to suggest a story of two halves.

First, fundamentally a nice story in as far as this process is proving the stablecoin was and is fully backed and full reserves, a pretty rare thing in today’s finance.

And second, a sad or stupid, or both, story depending on your view of how it was shut down and whether it had a significant voluntary component, though under some coercion, but civil law coercion, civil courts, where you just get a fine.

Banks love that sport, and they play it daily to beat SEC by clogging it up in courts and suing it over a myriad things to make SEC go away. Crypto clearly has to learn the game as well.

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• Source: https://www.trustnodes.com/2023/04/06/busds-market-cap-halves