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Analysis of exchange stablecoin holdings reveals that Binance, a major player in the crypto ecosystem, is slowly shifting its stablecoin allegiances. Tether USD (USDT) remains the undisputed leader among stablecoins, but things could be about to change in the coming days.

Read more:The lawsuit against Binance highlights cryptocurrency infrastructure risks

Increasingly regulatory oversight has caused the cryptocurrency market to get extremely volatile. The stablecoin ecosystem has, in particular, witnessed the most drastic shift in paradigm after the United States Securities and Exchange Commission (SEC) targeted two major US stablecoin issuers - Paxos issuing Binance USD (BUSD) and Circle issuing USD Coin (USDC).

Since the SECs intervention, the stablecoins market capitalizations have plummeted drastically. Exchanges connected to the aforementioned stablecoins have had to make some changes to the way they operate.

According to data provider Nansen, the top three exchanges based on stablecoin balances include Binance, OKX and ByBit, holding $11.30 billion, $3.64 billion and $0.98 billion, respectively.

Clearly, Binance is the winner in terms of stablecoin holdings, and that is a given, considering the platforms popularity. All the exchanges seem to have USDT as their top stablecoin, again, this is obvious considering that it is the crowd-favorite despite the allegations and lawsuits.

As seen in the chart below, Binance, which currently has $2.45 billion in USDT tokens, is not the top holder of Tether but the Seychelles-based OKX exchange, which has $3.42 billion in its coffers.

Top exchanges tether (USDT) holdings

Looking at the second largest holdings, investors can note that Dai (DAI) is the crowd favorite. Binance is yet again the largest holder of DAI, followed by OKX and ByBit.

The third largest holding is Circles USDC due to its recent run-in with the SEC.

Exchanges stablecoin holdings breakdown

Binance CEO Changepeng CZ Zhao has been accused of many things, including the collapse of the US-based FTX exchange, which was a huge supporter of Tether. Although Binance has not openly supported USDT or its parent companies, it has had massive holdings of the stablecoin due to its popularity.

In September 2022, Binance held nearly $5 billion worth of USDT. But since then, it has reduced its exposure to the stablecoin, instead focussing its efforts instead on promoting BUSD with zero-fee trading.

As Binance extended this program to other trading pairs on July 8, 2022, its market share increased rapidly from 50% to 72%, according to Kaiko research analyst Riyad Carey. However, one of the worlds largest exchanges announced on March 22, 2023, that it would halt the zero-fee trading promotion since the promotion has not helped stem its loss in market share from a peak of 70% to 58%.

There are two reasons why Binances share of USDT has decreased

Heres a comparison of its stablecoin holdings between September 2022 and March 2023.

Binance stablecoin holdings % change

Starting mid-March 2023, Binance has started promoting the utilization of TUSD on its platform via new features like listings, swaps and loans.

The latest announcement from Binance notes the addition of multiple altcoin pairs and also encourages market makers via its zero maker fees policy.

It is highly unlikely that Tether will fall out of the stablecoin race after being at the helm for such a long time. Why? As Binance reduces its USDT holdings, OKX is stepping in to replace Binance. In fact, OKX is the largest centralized exchange holder of USDT.

Apart from the regulatory concern, there is no reason for Binance to completely reject the most popular base pair for cryptocurrency trading. The exchange could reduce the exposure to USDT while it builds up its TUSD coffers, but as mentioned earlier, it will not abandon Tether.

The only scenario in which that would occur is if the regulators nail Tether down in a lawsuit. This could prompt Binance and other exchanges to do the same.

Exchange stablecoin holdings breakdown

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Analyzing exchange stablecoin holdings: Will Tether (USDT) lose relevance as Binance favors True USD (TUSD)? - FXStreet

(Bloomberg) -- Bitcoin traded around the $28,000 mark with concern about financial stability fueling bets that major central banks will need to stop increasing rates amid rising recession anxiety.

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The largest cryptocurrency briefly spiked 3% lower earlier, when Binance halted all spot trading on its platform because of a technical glitch. The firm said trading on the exchange would resume around 10 a.m. New York time, after the more than 2-hour halt.

Bitcoin was down less than 1% to $28,130. Other tokens were lower, with Ether down 2.4% and altcoins Cardano and Solana both down around 2.5%.

Treasury Secretary Janet Yellen will convene the heads of top US financial regulators Friday for a meeting of the Financial Stability Oversight Council. Deutsche Bank become the latest focus of the turmoil as concern about the industry sent its shares slumping. Lenders also came under pressure as Bloomberg News reported that Credit Suisse and UBS are among the firms under scrutiny in a US Justice Department probe into whether bankers helped Russian oligarchs evade sanctions.

Binance is the worlds largest crypto exchange. It processed roughly $14.9 billion in spot trading volume in the last 24 hours, according to data tracker CoinGecko. Its derivatives platform, which appeared to be unaffected, is much larger at $64.7 billion in 24-hour volume.

Changpeng Zhao, Binances chief executive, said earlier that an initial analysis of the issue indicated its matching engine encountered a bug on a trailing stop order. Deposits and withdrawals were paused as standard operating procedure, he said.

Bitcoin had previously racked up a stellar run over the last week, climbing to almost $29,000 on Wednesday despite a series of enforcement actions announced by the US Securities and Exchange Commission against crypto companies. The token is up almost 70% so far this year, unusually outpacing gains by smaller tokens.

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Crypto markets are at their most volatile when liquidity is low, said Conor Ryder, research analyst at blockchain data firm Kaiko, in a note Thursday. The market is currently at its lowest level of liquidity in Bitcoin markets in 10 months, Ryder said, following the collapse of several major banking routes into crypto this year.

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Bitcoin Lingers Near $28,000; Binance is Hit With Trading Halt - Yahoo Finance

On Saturday, March 25, Binance Co-Founder and CEO Changpeng Zhao (CZ) took to Twitter to share intriguing insights into the historical price performance of Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB).

CZs tweets highlighted the impressive growth of these cryptocurrencies over the years and shed light on their varying market caps.

In his first tweet, CZ urged followers to zoom out and consider Bitcoins price evolution in four-year cycles, starting from its inception in 2009. He pointed out that BTCs value has increased exponentially every four years, from $0 in 2009 to $34,000 in 2021. However, he emphasized that historical data should not be considered a prediction or financial advice.

CZs second tweet delved deeper into the historical price trends, noting that Bitcoins price has grown by 100 times (2 digits) every four years so far. He reiterated that past performance did not guarantee future results and encouraged his audience to view this information cautiously.

The third tweet compared the percentage growth of $ETH and $BNB to $BTC since their respective inceptions. CZ acknowledged that both $ETH and $BNB have outpaced $BTC in percentage growth, but Bitcoin still maintains a higher market cap, earning it the moniker Grandpa.

As of 9:00 a.m. UTC on March 26, Bitcoins one-week, one-month, and year-to-date ROI stood at -1.88%, +18.72%, and +65.71%, respectively. Ethereums ROI for the same periods was -1.81%, +9.06%, and +46.14%, while Binance Coins ROI was -4.00%, +7.21%, and +32.65%.

These figures demonstrate the potential long-term growth opportunities in the cryptocurrency market and emphasize the importance of looking beyond short-term fluctuations.

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Binance CEO Reflects on Bitcoin, Ethereum, and BNB Price History ... - CryptoGlobe