Bitcoin hovered near $22,000 amid a bout of stability in crypto markets following a selloff sparked by worries about a US clampdown.
The largest token dipped less than 1% as of 1:10 p.m. Wednesday in Singapore. Smaller coins such as Ether, Cardano and Binance Coin were also little changed.
Recent US steps such as shutting down issuance of a Binance-branded stablecoin, BUSD, have stirred fresh uncertainty for digital assets. The curbs are among the reasons why a bounce in crypto from 2022’s rout has cooled.
Bitcoin may be “reentering a slumber,” Bendik Schei, research head at Arcane Research, wrote in a note. He said there were signs of reduced institutional participation, such as a drop in open interest for CME Group Inc. futures.
Crypto watchers are keeping an eye on the shakeout in the $138 billion stablecoin segment. These tokens are intended to hold a set value, for example $1. Investors often park funds in them as they move between crypto trades.
Tether Holdings Ltd.’s USDT — the world’s largest stablecoin — increased circulation by about $1 billion in the past 24 hours alone, indicating the token is a beneficiary as investors move out of BUSD.
BUSD is a cog in billionaire Changpeng “CZ” Zhao’s Binance ecosystem. The US action against the stablecoin put the spotlight on the outlook for his exchange, the largest in crypto, given the industry’s history of sudden blowups.
Zhao said Tuesday the crypto industry may move away from dollar-linked stablecoins and earlier this week sought to reassure investors about the strength of his exchange.
A gauge of the top 100 tokens has rebounded 28% this year but remains far off a peak hit in 2021, hurt by rapidly tightening monetary policy.
