Crypto Shrinks 6% as Solana Downtime, Binance Investigations Weigh Heavily

Cryptocurrency’s month is off to a rocky start, with top 10 tokens down 7% on average


Blockworks exclusive art by axel rangel


key takeaways

  • All top cryptocurrencies are down in the month to date
  • Solana and binance coin are the worst performing top tokens

Crypto has shed a further 6% from its total market value over the past week, with ether (ETH) rival solana (SOL) performing the worst among top tokens.

SOL has dropped 13% over the last seven days, from $45.75 to $39.71 as of 2:30 pm ET. Losses were spurred by a June 1 network outage triggered by NFT-minting bots, which prevented transactions from being validated for 4 ½ hours. 

Binance’s native token BNB and Polkadot’s governance asset DOT both lost 11%; the second- and third-worst hit of the top 10 cryptocurrencies by market cap (sans stablecoins and wrapped assets).

BNB, notably,  dropped up to 11% on Monday on news of the SEC investigating Binance’s 2017 initial coin offering (ICO) for the token. The regulator is reportedly determining whether the ICO constituted an unregistered securities sale. 

On the same day, Reuters reported that Binance had facilitated $2.35 billion worth of illicit transactions between 2017 and 2021, ranging from proceeds of illegal drug sales to investment fraud and hacks.

In fact, none of the top 10 cryptoassets posted gains over the past week. ETH and another competitor, avalanche (AVAX), both lost 9%, while XRP and bitcoin gave up 5%.

TRON’s circulating supply has shrunk 9% since stablecoin launch

TRX had proven resilient since the collapse of Terra and its algorithmic stablecoin UST in early May, rising 30% throughout the month — while every other top cryptocurrency traded firmly in the red. 

Days prior to Terra’s implosion, TRON founder Justin Sun launched the blockchain’s own stablecoin, Decentralized USD (USDD), complete with a mint/burn mechanism reminiscent of UST.

Like Terra, TRX holders can mint $1 worth of USDD by burning one TRX. The mechanism, combined with existing burn functionality on certain TRX transactions, has caused the token’s circulating supply to diminish 9%, while USDD’s market value has grown to $667 million.

In turn, traders have bought TRX to exchange for USDD to take advantage of double-digit USDD yields on TRON-powered lending protocol JustLend. 

But USDD’s bullish impact on TRX’s price has slowed in the past week. Unlike in May, TRX has been underwater just like all the other top tokens – having sunk 3%. Cardano has performed slightly better, having dropped just 1%.

Cryptocurrency’s total market value is now $1.22 trillion, according to TradingView’s total crypto index. That’s down from $1.29 trillion at the start of the month and nearly half its collective capitalization from the start of the year, when all digital assets were worth $2.19 trillion.

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