Ethereum (ETH) and Binance USD (BUSD) have seen a significant movement of dormant coins this week, According to a recent tweet from Santiment, a leading on-chain analytics firm. The movement indicates that the average age of these tokens in wallets has sharply decreased after a prolonged period of inactivity.
Santiment’s report reveals that BUSD’s average age dropped by 378 days, while Ethereum saw a decrease of 26 days. Some analysts speculate that this redistribution may be connected to the ongoing FTX liquidations and sell-offs initiated earlier in the week.
Notably, FTX is a prominent cryptocurrency exchange holding an impressive $3.4 billion worth of crypto assets. As per court approval, FTX can now sell its crypto holdings in weekly batches, with an initial cap of $50 million for the first week and $100 million for subsequent weeks. However, it is essential for FTX to provide a 10-day notice before selling any BTC or ETH.
Ethereum Whales Wake Up After Years
Apart from the movement of dormant coins, Ethereum has also seen some activity from its ICO-era whale wallets. These specific wallets hold substantial amounts of ETH obtained during the initial coin offering (ICO) period back in 2014. Notably, within the past week, one such wallet with holdings valued at $302,096 comprising 185 ETH resurfaced after a span of 8.1 years.
As a result of this wallet activation, it is possible that an early investor is either liquidating his assets or shifting his funds to alternative platforms or services. Moreover, Ethereum is currently undergoing an extensive upgrade known as Ethereum 2.0, which aims to enhance the network’s scalability, security, and efficiency.
As part of this transition, Ethereum 2.0 intends to shift from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) model whereby users will be required to stake their Ethereum for transaction validation and rewards accumulation.
Binance Burns Idle BUSD Tokens
Binance, the largest crypto exchange based on trading volume, has recently taken action to reduce its supply of idle Binance-pegged tokens. These tokens are tied to different cryptocurrencies and fiat currencies, operating on various blockchains. One such token is BUSD, a stablecoin pegged to the U.S. dollar and backed by Paxos.
On September 14th, Binance conducted a burn of several idle Binance-pegged tokens including TUSDOLD (BSC), BUSD on the MATIC network, BUSD on the BSC and BNB networks, as well as BUSD on the TRX network. This process is part of Binance’s long-term plan to gradually discontinue support for BUSD by 2024.
The announcement was made back in August and users have been advised to convert their BUSD tokens into other cryptocurrencies by February of next year.Notably, Paxos ceased issuing new BUSD tokens in February following regulatory restrictions imposed on stablecoins.
These developments regarding both Ethereum and BUSD activity could potentially impact the overall crypto market landscape since they reflect changes in investor behavior and preferences. In contrast, Binance is discontinuing one of its stablecoins. It remains to be seen whether these shifts will impact token prices.
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