In a recent development, on-chain analytics firm Santiment has observed unusual activity involving Ethereum (ETH) and Binance USD (BUSD), the second-largest cryptocurrency and a stablecoin, respectively. Both tokens have experienced historic dormant movements this week, with the average age of coins in wallets decreasing significantly. BUSD’s average age dropped by 378 days, while Ethereum’s decreased by 26 days.
Possible Connection to FTX Liquidations
Speculation arises that this historic dormant movement could be linked to the FTX-triggered liquidations and sell-offs that commenced earlier in the week. FTX, managing over $3.4 billion in crypto assets, received permission from a U.S. judge to sell its crypto holdings. This will occur in weekly batches, starting with a $50 million limit in the first week and increasing to $100 million in subsequent weeks. Notably, the sale of Bitcoin (BTC) and Ethereum (ETH) requires a 10-day notice to the creditors’ committee, ad hoc committee, and the U.S. trustee.
In recent weeks, Ethereum has witnessed the reactivation of dormant ICO-era whale wallets. One such event occurred when a dormant pre-mine address, holding 185 ETH valued at $302,096, was revived after 8.1 years.
Binance’s Transition Away from BUSD Support
Meanwhile, crypto exchange Binance is gradually phasing out support for the BUSD stablecoin, with plans to cease support by 2024. As part of this transition, Binance initiated the burning of several idle Binance-pegged tokens on September 14. The tokens burned included TUSDOLD (BSC), BUSD on the MATIC network, BUSD on the BSC, BUSD on the BNB network, and BUSD on the TRX network. Binance had previously urged users to convert their BUSD holdings into other cryptocurrencies by February of the next year, following Paxos’s decision to stop issuing BUSD earlier in the year due to regulatory pressures.
These recent developments in the crypto space, marked by unusual dormant movements and platform transitions, continue to shape the evolving landscape of digital assets.