- Binance USD (BUSD) temporarily plunged to $0.20 on Binance on Wednesday.
- The depeg against DAI happened after a single $647,000 sell order.
- BUSD quickly regained its $1 peg, with the Binance orderbook showing a $3.38 million aggregated sell order.
Stablecoin Binance USD (BUSD) briefly depegged to 20 cents on Wednesday, with the BUSD token losing its peg against the DAI stablecoin.
The stablecoin’s plunge to $0.20 happened amid a liquidity issue on the world’s largest cryptocurrency exchange Binance.
BUSD plummets after single $647k sell order
According to on-chain data, BUSD’s sharp depeg resulted from a single $647,000 sell order. However, there was an instant move back to the dollar peg against the DAI stablecoin as arbitrage traders acted swiftly to plough the opportunity by buying the token lower and selling it on other exchanges. The action quickly saw BUSD back to $1 on Binance.
The Binance orderbook is showing a $3.38 million aggregated sell order magnitude from the $1 to $0.20 slip. As such, it now needs $3.38 million in market sell orders for the stablecoin’s price to dip to today’s low again.
The temporary depeg against DAI for BUSD comes in the wake of regulatory push from the New York Department of Financial Services (NYDFS) and US Securities and Exchange Commission (SEC). After NYDFS ordered BUSD issuer Paxos to cease minting the stablecoin, the SEC announced it was suing the company for issuing an unregistered security.
The developments affected market sentiment and saw Paxos end its relationship with Binance. On its part, Binance revealed it could look at alternative stablecoins, including the potential to revisit algorithmic options as BUSD witnessed massive withdrawals.
The post BUSD briefly falls to $0.20 on Binance appeared first on CoinJournal.
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