Binance vs USDT: FUD or Final Reckoning? | Weekly Digest

August 7, 2023

Welcome to another Crypto Weekly Digest brought to you by VirtualBacon.

In a time marked by legal complexities, technological innovation, and market fluctuations, our primary focus will be on analyzing the top stories that have steered the digital asset landscape. We'll have a look at the overall market sentiment, spotlighting both the best and worst-performing coins of the week, while providing concise overviews of key cryptocurrencies and the factors driving their performance. Let's delve right in.

Binance vs USDT: FUD or Final Reckoning?

Binance, the world's largest crypto exchange, is strategically pushing the Hong Kong-regulated First Digital's FDUSD stablecoin by offering zero trading fees for BTC/FDUSD and ETH/FDUSD pairs. This calculated move, amidst regulatory pressures, reflects Binance's continued effort to diversify trading volumes between stablecoin pairs and navigate the complex landscape of digital asset regulation.

Binance listed FDUSD with zero trading fees last week, indicating a significant move to promote this stablecoin over others like USDT. The introduction of FDUSD, backed by Hong Kong-based custodian First Digital, has already shown a substantial boost in market cap and trading volume. Concurrently, Tether's USDT stablecoin has shown signs of being manipulated, with its price being pressured down and large amounts being swapped for DAI. Allegations of Binance's involvement in these activities add complexity to the situation. This aggressive push for FDUSD and the parallel shift away from USDT can have profound implications on trading volumes and stablecoin market dynamics, affecting established players like USDT and emerging ones like DAI.

The Binance vs. Tether battle may signal a tectonic shift in stablecoin dynamics. Binance's promotion of FDUSD as the main pair, coupled with hundreds of millions of USDT being dumped by Binance accounts for DAI, could have far-reaching consequences. The situation, characterized by some as "massive FUD," requires close scrutiny as it might redefine trading pairs, market liquidity, and even impact the Bitcoin price. In this shifting landscape, strategic decisions by major exchanges like Binance will likely continue to resonate across the broader crypto ecosystem.

BRICS Alliance Shifts Focus: Local Currencies Over U.S. Dollar in Global Trade

In an upcoming summit this August, the BRICS alliance, comprising Brazil, Russia, India, China, and South Africa, is set to discuss a pivotal change in international transactions. These nations are on the brink of a significant economic shift, focusing on the usage of their local currencies for cross-border transactions rather than relying on the U.S. dollar. This move stands as a strategic initiative to bolster local economies, redefining their presence on the global financial stage.

The BRICS countries are actively pursuing a plan to utilize local currencies in settling global trade, sidelining the U.S. dollar. South African BRICS Ambassador Anil Sooklal confirmed that the upcoming discussions would deepen the use of native currencies within the alliance, impacting various sectors. This approach aims to make international transactions within BRICS faster, smoother, and more cost-effective. By strengthening their local currencies in foreign exchange markets, these nations are not only reshaping their financial footing but potentially influencing a broader shift in global financial power towards the East.

The BRICS' movement towards local currencies is part of a larger trend in the global financial restructuring. With the emergence of diverse reserve currencies powered by digital networks, nations are aligning with CBDC or cryptocurrencies. This shift represents a significant step in global economics, fostering a more versatile financial landscape.

Coinbase's 'Base': The Upcoming Launch of Layer 2 Blockchain Solution

Coinbase, the largest publicly traded U.S. crypto exchange, has announced the public launch of Base, its layer-2 blockchain solution, on August 9. This initiative, built with Optimism's OP Stack, aims to bring the next billion users and million builders on chain, expanding the possibilities of blockchain technology.

Base, already live for developers since July, allows bridging of ether (ETH) and offers a new platform for applications, with over $68 million worth of ether already bridged last weekend. Companies like Coca-Cola, Atari, and OpenSea are participating in Coinbase's “Onchain Summer” events. Venture-capital firm Andreessen Horowitz is also exploring similar technology. Base's launch represents a significant step in Coinbase's mission, reflecting a consistent focus on innovation within the crypto ecosystem.

The launch of Base exemplifies a broader movement in the crypto world to expand accessibility and functionality. As new technologies and alliances emerge, platforms like Coinbase are leading the charge in redefining the landscape, facilitating the intersection of traditional industries with crypto innovation.

Market Update

Bitcoin Fear/Greed Index

Ethereum Fear & Greed Index

Best Performing Coins of The Week

Worst Performing Coins of The Week

Altcoin News

In our final section, we'll quickly highlight this week's best and worst-performing cryptocurrencies. Let’s have a glance at the forces that shaped these coins' weekly performance, offering a concise yet insightful look.

1) We begin our overview with Bone ShibaSwap, a coin that has experienced an impressive 20.4% rally over the past week.

What could be behind this surge? Investor optimism seems to be on the rise, primarily driven by the anticipated launch of Shibarium later this month.

Adding to the momentum, the Shiba Inu team recently released a blog focused on the BONE token. The team has declared plans to mint the remaining BONE before the launch and then lock the BONE contract, ensuring that no additional minting will occur. Reportedly, a substantial part of the BONE token will be designated to reward validators.

2) The second coin we will look at is Helium. Helium has experienced a 29.5% rally over the past week.

What could be behind this surge?

HNT went through the community-approved HIP20 event, a halving that occurs every two years to ensure $HNT scarcity and make Helium more accessible to a broader group. The halving and the increased scarcity reflected positively on Helium's price, resulting in a strong upward move over the past 7 days.

3) The third and final coin we will look at is Curve Dao, a coin that experienced a 16.5% drop over the past week.

What could be behind this drop?

Curve Finance was drained of $50M, and over $100M in cryptocurrency is at risk due to a "re-entrancy" bug in Vyper, affecting several stablecoin pools.

Elsewhere, amid the panic, lending protocol Aave disabled its CRV borrowing function. A looming $100M CRV debt from Curve's founder on Aave is near liquidation, risking the forced liquidation of CRV positions if prices continue to rise.

As we conclude this week's newsletter, we've journeyed through a spectrum of developments ranging from Coinbase's exciting launch of BASE, the fluctuating dynamics around FDUSD and USDT, to the strategic shift by BRICS nations away from the dollar, and even the contrasting fortunes of coins like Bone ShibaSwap and Helium. These events, together with the alarming security breach at Curve Finance, present a vivid snapshot of a crypto landscape that is both vibrant and volatile. In my view, these highlights emphasize the critical need for awareness, agility, and vigilance in navigating this ever-changing space. Stay engaged, keep learning, and see you next week!

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