Interpretation of cryptocurrency market on February 14 2023

Yesterday afternoon, the New York Department of Financial Services asked to stop casting the new BUSD. The news had some impact on the market. BUSD saw a maximum drop of 0.5%. BNB saw a maximum drop of 10%.

The incident started with the SEC's lawsuit against Paxos, framing BUSD as an unregistered security, consistent with the previous characterization of the pledge service provided by Kraken. Here is an interesting point, does the U.S. Supreme Court's definition of a security, profit expectation, a stablecoin issued through reserves of equivalent dollar assets, with prices also anchored to the dollar, meet this definition? This also makes this event look more like it the targeting Binance.

The direct impact of this event on the market is limited.

1. The current market value of the three major stablecoins is USDT 66.9 billion, USDC 40.4 billion, and BUSD 15.8 billion. BUSD does not account for a large proportion; 
2. At present, they have only stopped minting new BUSD. The stock does not directly exit the market;
3. After the news of BUSD stopped minting, TIDE immediately after the TRX issued 1 billion USDT, so the total market value of stablecoins may appear to remain relatively high. If the policy remains unchanged, competitors will only BUSD market share gradually.

The real impact is the effect of making an example out of a chicken. From Kraken to Paxos, there is a trend of tightening regulation, but it always makes people feel strange that BUSD is very different from Kraken's exaggerated pledge and service products.

BUSD, although the name is Binance USD, only uses the brand of Binance, and is issued by Paxos under the authority of the New York Department of Financial Services. The quality of reserve assets (cash and assets with better liquidity that can be liquidated on time as a percentage of the total issue) is much higher than Tether, and consists almost entirely of short-term and medium- to long-term U.S. Treasuries and monthly reports are published, so it is not in transparency. Therefore, from the perspective of investors' capital security, BUSD and USDC are both of excellent quality and better than USDT, which makes people feel confused or think about the actual thoughts behind the regulation.

So this event, the substance of the impact is limited, more like a warning to the Binance and "Binance security," combined with the previous C.Z. to FTX without mercy, so that a lot of Wall Street capital losses, to know FTX so significant action. Still, no regulatory authorities in advance to see the end. The matter seems easy to understand, to put it in a good way, The FTX. Because of the FTX, the regulators began to plan for a rainy day. To say the worst, there are many interpretations.

In short, please pay more attention to tonight's CPI data. More practical, whether inflation will slow down is the first step in whether the Fed will consider raising the interest rate ceiling, so the market will count in advance, which also determines the current adjustment, whether it is grinding time or by falling with space to complete, the future is bright, difficult to judge only the near future.