The Recent Lawsuit and its Impact
The recent lawsuit filed by the SEC against Binance and Coinbase has sent shockwaves through the crypto community, with Binance and its native token, BNB, being particularly impacted. Amidst the turbulence, many questions arise regarding the stability of Binance’s assets and its ability to alleviate the FUD surrounding the exchange and its token.
Looking at the Assets
Despite concerns, data from on-chain analytics indicated that Binance’s assets have not experienced a significant decline. The overall value of assets held on the platform decreased by approximately 13% in the past week, primarily due to the drop in cryptocurrency prices.
While Binance’s assets did not suffer a substantial decrease, its reserves have been on a declining trend in recent months. According to Dune Analytics’ data, reserves showed significant reductions. As of now, the exchange’s reserves comprise of 28.1% Ethereum, 17.4% BNB, and 17.0% BUSD.
Implementing Damage Controls
Furthermore, Binance’s CEO, CZ, took to Twitter to address concerns regarding outflows from the exchange. CZ clarified that the reported net outflow of approximately $392 million in the last 24 hours includes the impact of crypto price drops and should not be solely interpreted as a negative development.
CZ emphasized that measuring asset under management (AUM) changes and outflows are distinct, and some platforms overlook inflows. On days with significant price movements, arbitrage traders often move substantial funds between exchanges, surpassing regular activity levels.
Despite CZ’s efforts to mitigate FUD, overall activity on Binance has dropped, which negatively impacted the revenue generated by the protocol.
What’s Next for BNB?
At present, BNB is trading at $236.69 with limited signs of recovery. Its development activity continued to decline suggesting that new upgrades and updates on the BNB network may take longer than expected.
Furthermore, BNB’s trading volume experienced a surge during this period. The volume rose from 250 million to 750 million in the last few days.
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