• BUSD stablecoin market has seen a significant decline in supply over the past month.
• Tether’s (USDT) supply has increased by 5.8%, resulting in a market valuation of almost $70 billion.
• The dominance of stablecoins in the cryptocurrency market capitalization has steadily increased, particularly during the bear market.
BUSD Stablecoin Supply Decreases
BUSD has seen a significant decline in supply over the past month. On February 13, 2023, Paxos announced that following a suit by the SEC that BUSD would no longer be minted. This resulted in a rapid redemption of BUSD, with $290 million being redeemed within eight hours of the revelation. Since minting ceased, BUSD token supply has declined 17.77%, which accounted for a nearly 3 billion BUSD tokens decrease.
Tether Emerges as a Winner
Profiting from this turbulent period, Tether’s (USDT) supply has increased by 5.8%, resulting in a market valuation of almost $70 billion. Tether has historically been the most popular trading pair for BUSD and its supply has only decreased by 2.9% during the same time period as BUSD’s losses have become more evident. Meanwhile, Paxos‘ other stablecoins, USDP and PAXG, have seen decreases of 19.3% and 11.3% respectively in the last 30 days compared to BUSD’s 19%.
Binance Continuing Support
The most active exchange dealing with BUSD tokens is currently on Binance and they have confirmed that they are exploring other issuers and stablecoins, including those pegged to different currencies according to its CEO Changpeng „CZ“ Zhao while they continue to support existing users who possess their own copies of it until further notice is given otherwise by them or their issuer Paxos.. As of February 19th 10.9 billion copies had been possessed by them according to blockchain intelligence firm Nansen’s research into it .
Stablecoin Dominance Increasing
The dominance of stablecoins in the cryptocurrency market capitalization has steadily increased significantly over recent months but especially during bear markets where investors seek safety from volatile assets such as crypto-currencies . According to Coinmarketcap data ,stablecoins made up 20 % of all crypto assets at close on Friday , Feb 21st , 2021 . This was up from 12 % at beginning January 2020 . Some analysts argue that this trend could continue if investors stay focused on risk aversion strategies instead investing heavily into Bitcoin or Ethereum which were down 6 % & 8 % year-to-date respectively as at Feb 21st 2020 .
In conclusion , with increasing demand for stablecoins due to investor reluctance towards traditional cryptocurrencies like Bitcoin & Ethereum due to their recent volatility , we can expect an increase in demand for these digital assets as risk avoidance remains high among traders & investors alike . The loss of one major player , such as BUSD will likely not stop this trend but may benefit competitors such as USDT even further if new entrants fail to make an impact after entering this arena shortly after this news broke out