The cryptocurrency community has been thrown into a frenzy following reports that USD on Binance.US is de-pegging from all other assets. Reddit user reported the issue, revealing that Bitcoin was trading at almost a 1K difference in price on Binance.US compared to other exchanges. Furthermore, all other USD pairs on the exchange were trading at a 3% premium to every other exchange.
The news sparked a range of reactions from the community, with some users seeing it as an opportunity to profit, while others were shocked and scared. One user, No_Concentrate2892, pointed out that there were over 400k pending transactions on the Bitcoin network, and Binance had paused BTC withdrawals, which could be contributing to the depeg. Another user, SigSalvadore, suggested that if Binance had BTC as collateral for USD but found themselves short BTC, this might be causing the depeg.
Despite the various reactions, it appears that the situation on Binance.US is not unique. Reddit user Snooper mike reminded the community of the 87% flash crash that occurred on the exchange in 2021. It’s possible that this current situation is yet another glitch on the platform, rather than a wider issue in the crypto market.
However, the depegging could have significant repercussions for the crypto sector, especially if other exchanges experience similar issues. As more institutions and individuals enter the market, issues such as these will need to be addressed to maintain confidence and stability.
In the meantime, some users are taking advantage of the situation. Reddit user pbjclimbing reported making a profit of $300 by selling $10,000 of USDT for a 3% premium. While this may be an attractive opportunity for some, it could also discourage fiat on-ramping, which is crucial for exchanges to grow and develop.
The thing is that this encourages fiat off-ramping and discourages fiat on-ramping. Normally, exchanges want you to on-ramp your fiat. I just sold ~$10,000 of USDT for a 3% premium after seeing this, $300 of profit, and the fiat off-ramp process appears to be going smoothly.
Reddit user pbjclimbing
As for Binance.US, it remains to be seen how the exchange will address the issue and restore confidence among its users. However, the incident serves as a reminder of the volatility and unpredictability of the crypto market, and the need for caution and due diligence when investing in these assets.