HomeCryptoBinance news: USDC reserves sold to buy Bitcoin and Ethereum

Binance news: USDC reserves sold to buy Bitcoin and Ethereum

Binance’s Proof-of-Reserve (PoR) shows that the crypto-exchange sold its USDC stablecoin reserves to buy about 100,000 BTC and 550,000 ETH. The equivalent of about $3.5 billion in the two major crypto assets was executed during the period from 12 March to 1 May 2023. 

Binance news: PoR shows selling USDC and buying Bitcoin and Ethereum

According to Binance’s Proof-of-Reserve (PoR), it is clear that the crypto-exchange has changed its strategy, aiming to sell its USDC stablecoin reserves

Indeed, between the time period of 12 March and 1 May 2023, Binance would have purchased 100,000 Bitcoin (BTC) and 550,000 Ethereum (ETH).

Describing this on X (Twitter), is analyst Aleksandar Djakovic

Basically, Djakovic described how as early as the beginning of the year, the industry’s most popular crypto-exchange, Binance, was already converting its USDC deposited by users into BUSD, but keeping USDC as a reserve. As of 1 March 2023, that USDC reserve amounted to $3.5 billion

With the failure of Signature Bank, Binance then decided to sell its USDC reserve in exchange for BTC, ETH, and USDT

Specifically, in the period from 12 March to 1 May, Binance reportedly purchased about 100,000 BTC and 550,000 ETH, which amounted to about $3.5 billion, the same amount of surplus USDC it held.

Binance news and its Bitcoin reserves

The issue regarding the importance of certified PoR for centralized crypto-exchanges arose particularly after the collapse of FTX in November 2022. 

As early as the following month, Binance had audited its Bitcoin reserves. At that time, it was the auditing firm Mazars that asserted that Binance’s Bitcoin reserves were fully guaranteed

Mazars is one of the most prominent auditing firms based in Paris, and in view of the distrust that was brewing at the time, it was Binance’s CEO Changpeng CZ Zhao who had contacted it. 

That initial audit, which Mazars successfully audited, was based on BTC alone. At that time, Binance was not yet able to demonstrate that it held the necessary reserves to cover all crypto assets. 

The current performance of USDC

After the shutdown of Silicon Valley Bank in March 2023, Circle’s stablecoin, USD Coin (USDC) saw a collapse in volume

This was because the day after the bank fell, Circle had declared that 3.3 billion of USDC reserves remained pegged to Silicon Valley Bank. Obviously, this statement had prompted USDC holders to abandon the idea that such stablecoin was “safe.” 

Looking at USDC’s graph in terms of market capitalization, the Circle stablecoin has seen a complete halving since last year. In fact, USDC’s market cap has dropped from $54 billion last year, to the current $26 billion.

In contrast, the Tether stablecoin (USDT) has experienced total market cap growth over the past year, rising from $66 billion to the current $84 billion. 

And yet, USDC remains the second largest stablecoin by market cap and the sixth largest in the overall crypto rankings. 

Not only that, the CEO of Circle, Jeremy Allaire, revealed that 70% of USDC adoption is outside the United States of America. Specifically, USDC is making strong progress in Asia, Latin America, and Africa.

Stefania Stimolo
Stefania Stimolo
Graduated in Marketing and Communication, Stefania is an explorer of innovative opportunities. She started out as a Sales Assistant for e-commerce, and in 2016 she began to develop a passion for the digital world, initially in the Network Marketing sector, where she discovered and became passionate about the ideals behind Bitcoin and Blockchain technology, which lead her to work as a copywriter and translator for ICO projects and blogs, and organize introductory courses.