BitUSD Trades Below Dollar Peg after Global Settlement Event
BitUSD has almost no effect on the crypto ecosystem, unlike Tether (USDT), where disturbances in the dollar peg create Bitcoin price anomalies. However, the breakdown of an algorithmic stablecoin speaks of the inherent risks in attempting to regulate an asset by market principles.
Another coin with a mechanism similar to BitUSD is DAI, which is supported by Maker (MKR) trading. However, DAI has managed to keep its dollar peg, and the risk is seen as much lower, at least for now.
The disintegration of the BitUSD peg coincided with the end of the Basis stablecoin project, which did not even launch a dollar-pegged token for fear of being deemed the seller of unregistered securities.
Stablecoins were seen as the answer to cryptocurrency volatility, but so far, preference is given to asset-backed stablecoins, while the algorithmic variety is yet to prove its stability. It has been much easier for asset-backed coins to be accepted on most leading exchanges, while algorithmic stablecoins usually depend on niche marketplaces.