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“Stablecoin” Trueusd Pumps After Binance Listing

“Stablecoin” Trueusd Pumps After Binance ListingIt’s customary for cryptocurrencies to pump after securing a Binance listing. Every week a handful of tokens enjoy the “Binance bounce”, gaining as much as 50% in a matter of hours. Trueusd (TUSD) was meant to be different though. It’s a stablecoin whose job is to stay as close to the US dollar as possible. And yet, when Binance announced that it was adding TUSD, the unthinkable happened. Also read: Circle Raises $110Mn With Plans to Launch USD-Backed Coin

How Trueusd Became a False Stablecoin

Stablecoins are a burgeoning industry, with scores of projects seeking to create tether alternatives that provide stability, each pegged against the US dollar. Circle has just announced plans to launch its own stablecoin, and recently profiled several other new contenders, including Trueusd, which was described as: A collateralized stablecoin backed by USD held in escrow accounts. It’s basically a more transparent tether and is available on Upbit and Bittrex – where it’s even tradable against tether. On May 16, Binance became the latest and largest exchange to announce its intention to list TUSD. Up until this date, the coin had performed as expected, with scarcely a wobble from its dollar peg. But then Binance released its news and TUSD went on a run to rival even the pumpiest of altcoins. At 3:36am ET, Trueusd was trading at $0.997. In the space of 22 minutes, it jumped to $1.18 and by 5am was at $1.39, a 39% rise for a coin whose defining characteristic is that isn’t meant to rise. “Stablecoin” Trueusd Pumps After Binance Listing

Stability? What Stability?

In a short blog post, Binance declared that it would “open trading for TUSD/BNB, TUSD/BTC and TUSD/ETH trading pairs at 2018/05/18 04:00 AM (UTC). Users can now start depositing TUSD in preparation for trading.” It added: “Note: TUSD is a stablecoin. The value is designed to be 1 TUSD = 1 USD.” That design clearly doesn’t account for the power of a Binance listing. This is despite Trust Token, the team behind TUSD, claiming “Our open source smart contracts ensure a 1:1 parity between TrueUSD and USD in the accounts.” “Stablecoin” Trueusd Pumps After Binance Listing Ironically, in pumping by 39%, TUSD may have just proven its unsuitability as a stablecoin, and strengthened the case for tether. Tether may be opaque, but at least it works, staying resolutely close to its dollar peg at all times. Trueusd seems to have spiked due to traders FOMO-ing into the coin. It is unclear whether all of these buyers were aware that they were purchasing a supposed stablecoin. The price will settle down eventually, and return to its designated price. Traders may be left wondering, however, whether a stablecoin that can appreciate by almost 40% might also be capable of diminishing in value. Do you trust Trueusd to hold its value in future? Let us know in the comments section below.
Images courtesy of Shutterstock and Saroshi Pulse.
Need to calculate your bitcoin holdings? Check our tools section. The post “Stablecoin” Trueusd Pumps After Binance Listing appeared first on Bitcoin News.

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