Binance USD (BUSD) is a stablecoin jointly issued by Binance and Paxos. It is pegged to the dollar price at a ratio of 1:1 and is regulated by the New York State Department of Financial Services (NYDFS). The reserve of BUSD consists of 96% cash or cash equivalents and 4% short-term interest free treasury bonds, which are deposited in the Bank of America by Paxos.
How does Binance USD (BUSD) Work?
The operation mechanism of Binance USD (BUSD) is similar to that of the mainstream stablecoin, and the target asset price is pegged to increasing the amount of reserves according to the number of tokens issued. When it is necessary to issue BUSD, the issuer will create an equivalent BUSD according to the amount of USD delivered by the investor and deliver it to the investor. The USD delivered by the investor will be deposited by Paxos as a reserve in Bank of America. When the investor needs to exchange US dollars, the issuer will deliver the corresponding amount of US dollars in the reserve to the investor according to the amount of BUSD delivered by the investor, and the corresponding amount of BUSD will be burnt/destroyed.
BUSD is regulated by the New York State Department of Financial Services (NYDFS) and uses the SetLawEnforcementRole function in its operation, which enables Paxos to restrict illegal transactions in NYDFS regulated accounts. Once a criminal or fraudulent account is found, it will be immediately accessible to supervision.
What is Binance USD (BUSD)?
BUSD is a crypto stablecoin with value pegged to US dollars, which is not affected by market price fluctuations. Investors can exchange assets into stablecoins such as BUSD in time when the crypto market fluctuates violently, so as to ensure that the assets will not lose too much. However, stablecoins such as BUSD are relatively unsuitable for investment, because the possibility of obtaining large profits is low.
BUSD can be circulated in ERC-20, Binance Smart Chain (BSC), and Binance Chain BEP2. Investors can use BUSD to trade, transfer, and pay on these three chains.
Binance USD (BUSD) Crypto Wallet
In addition to placing BUSD in the Gate.io exchange to facilitate trading, BUSD can also be placed in a crypto wallet.
There are two schools of thought in determining the price of Binance USD.
By way of intrinsic value: This typically involves on-chain metrics, project metrics and financial metrics of Binance USD, collectively known as fundamental analysis. The law of supply and demand, tokenomics, use case, project roadmap as well as regulations and governance involved would affect the value of Binance USD from a long term perspective.
By way of price action: Primarily analyzed via candlestick chart patterns and technical indicators such as MACD, RSI and the bollinger bands, technical analysis forecasts the price of Binance USD on the basis that history tends to repeat itself. As the candlestick charts are a general representation of the emotion of the market, news announcements and community sentiment can be significant price action drivers for Binance USD as well.
HODLers tend to prefer the long term nature of fundamental analysis, whereas short term traders tend to rely on technical analysis more. In reality, both analyses may combine and create interesting scenarios for Binance USD and the cryptocurrency market as a whole.
2. What is the highest price of Binance USD in history?
Binance USD achieved the all-time high of $1.15 in 2020-03-13, and is currently trading at $1.00.
3. What is the lowest price of Binance USD in history?
In 2021-05-19, Binance USD reached the all-time low of $0.90.
4. Should I buy Binance USD now?
It is important to remember that Binance USD, like all other cryptocurrencies, are subject to extreme market conditions, legal policies, project team management and other unpredictable factors. As such, cryptocurrencies fluctuate greatly and it is important to manage your own risk level. Users are advised to do your own research when making investment decisions in the crypto market.