“Stablecoin Market Sees BUSD Drop to Fourth Place”

BUSD Market Capitalization Drops $1 Billion in 30 Days

BUSD, the dollar-pegged stablecoin by Binance, has seen a decline of over $1 billion in market capitalization in the last 30 days, according to CoinMarketCap, pushing it down to the fourth spot among other stablecoins.

At present, the market capitalization of BUSD is $4.30 billion, a decrease of 29% from the $5.54 billion recorded on May 18. Since December of last year, the stablecoin has been in a downward trend, having previously reached a market cap of $23 billion.

The BUSD market cap has mirrored the significant events involving Binance since FTX’s downfall in November 2022. In December, news that the U.S. Department of Justice was aiming for Binance caused a net outflow of $3.6 billion in just seven days. Furthermore, BUSD was redeemed from market makers, with Jump Finance alone cashing out $245 million.

In September 2019, Binance and Paxos Trust formed a partnership to launch the BUSD stablecoin. Paxos is the creator and proprietor of the product, while Binance has licensed its name. For Paxos, the collaboration posed novel difficulties. In February, it was said that the U.S. Securities and Exchange Commission had issued a Wells Notice to Paxos, claiming that Binance USD was a security that had not been registered.

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The New York Department of Financial Services (NYDFS) conducted an investigation that resulted in them ordering Paxos to discontinue the issuance of BUSD. This, combined with other events, caused BUSD’s market share to drop drastically, from $15.88 billion on February 12 to $8.38 billion on March 13.

The most recent setback was the SEC’s lawsuit against Binance on June 5, accusing them of offering unregistered securities. The American regulatory body brought forth thirteen accusations against the trading platform, including the unregistered sale and distribution of BNB and BUSD tokens.

Stablecoin Market Share Shifts to Tether (USDT)

Over the past year, the market dominance of stablecoins pegged to the U.S. dollar has shifted, with Tether (USDT) rising back to its peak while the majority of other stablecoins are decreasing.

The market share of Circle’s USD Coin (USDC) decreased from 34.88% in May 2022 to 23.05% in May 2023. The market participation of BUSD dropped from 11.68% to 4.18% over the same time frame, and Dai’s (DAI) portion of the crypto market was at 3.66%, a decrease from 4.05% in May 2022.

Tether’s USDT has been gaining momentum as of late. In May, its market dominance had risen to 65.89%, an increase from its 47.04% share from the previous year. Its market capitalization has increased to a staggering $83.1 billion, while USDC’s market cap has dropped from its peak of $55 billion to $29 billion.

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