The biggest news of the last month was the downfall of FTX and the arrest of former CEO Sam Bankman-Fried. The arrest took place on December 13 in the Bahamas at the request of the United States government, and must now be extradited. SBF is now facing numerous fraud charges, including criminal charges from the US Department of Justice.
The US Bureau of Labor Statistics also published Consumer Price Index figures which came in at 7.1%. The forecast was for 7.3%, which sent the markets, including Bitcoin, higher. The cryptocurrency topped $18,000 earlier in the week. However, the trending effect on the markets is called FUD.
But the cryptocurrency markets are full of turmoil and uncertainty (FUD) as Binance’s solvency issues worry investors. The exchange has so far shown no signs of trouble, having successfully processed more than $8 billion in daily withdrawal requests. CEO Changpeng Zhao even went so far as to say that this does not count as a “top 5” day in terms of more withdrawals and asserted that there is no number that would put pressure on the exchange as it holds user assets 1:1 On-chain analytics platform CryptoQuant claimed that Binance users’ deposits are 99% guaranteed.
The number of USDT holders decreased
The number of USDT addresses on Ethereum dropped from 4.01 million to 3.57 million this week.
On the Tron network, where most USDT is currently in circulation, the number of holders has dropped even further: from 17.5 million to 15.5 million in just a few days.
This marks the lowest number of addresses holding USDT since October 2021.
The reason behind the move remains unclear, though it may be related to increased shorting activity on Wall Street against USDT, which was reported by Bloomberg.
Addresses containing between $100 and $1,000 in USDT have dropped. On the other hand, the number of titles owned between $10,000 and $1 billion registered increases.
At the same time, the price of USDT remained highly correlated and its market capitalization grew slightly.
This may indicate that smaller merchants are choosing to exit Tether while the larger addresses are buying.
Or USDT is simply being rebalanced internally by entities that have gone from having lots of addresses with small amounts of USDT to fewer, more concentrated addresses.
FUD around USDT continued to spread throughout the week, although retracements are still working as intended.
Likewise, the cascading effects of scrutiny towards Binance are noticeable on BUSD activity.
Billions of FUD on Binance
BUSD’s market capitalization has fallen by more than $3 billion in the past seven days, while BNB has lost $7 billion in value.
After issuing proof of reservations, Binance proves that its customers are fully supported.
However, the lack of transparency regarding its liabilities has led to criticism, even though CZ has stated that it is not in debt and plans to review its liabilities as well.
This led to “Binance FUD” becoming a trending topic on Twitter in the US earlier in the week.
Then, on Thursday, concerns regarding Binance rose after CZ’s interview with CNBC.
In it, CZ avoids answering whether it will be able to handle a loss of $2.1 billion it made from FTT8 sales that were “recovered” due to FTX misappropriation, instead stating that it is in a strong financial position.
A brief snippet of the interview taken out of context was shared on Twitter and liked by Jack Dorsey among thousands of others with the message “Get your Bitcoin OFF Binance”, adding more fuel to the fire.