The fate of Binance USD (BUSD), the stablecoin introduced by Binance, hangs in the balance as its market capitalization has seen a massive drop of more than 80% in 2023.
From November 2022 to June of this year, BUSD’s market capitalization fell from $23 billion to $4 billion. Notably, capitalization suffered an 18% loss in May alone, as reported by CCData, an analysis firm.
TrueUSD (TUSD) is gaining momentum as the US dollar bank market cap declines
As BUSD’s market cap continues to drop and has reached a critical level, representing less than 5% of the total stablecoin market cap, binance I started actively promoting the adoption of TrueUSD (TUSD).
While the market capitalization of TUSD is still slightly below BUSD, currently standing at over $3.1 billion, it has overtaken BUSD in terms of trading volumes. According to data provided by CCData, TUSD trading volumes have tripled, which indicates a growing interest and use of the stablecoin.
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TrueUSD (TUSD), introduced by TrustToken in 2017, has emerged as the fifth largest stablecoin in the market, after BUSD. TUSD operates as an Ethereum-based ERC-20 token, securing its value with dollar reserves held in multiple US-based banking entities. The company behind TUSD guarantees 1:1 convertibility with the US currency, instilling confidence in its stability and reliability among users.
With the market cap of BUSD seeing a significant drop, the growing popularity and trading volume of TUSD is testament to the growing demand for a stable altcoin option. Also, Binance’s shift towards promoting TUSD indicates a strategic response to the changing landscape of stablecoin usage and market dynamics.
The sharp drop in the US Dollar Bank’s market capitalization can be attributed to its imminent demise. In February 2023, NewsBTC reported that Paxos would stop issuing the BUSD stablecoin due to an ongoing lawsuit filed by the US Securities and Exchange Commission (SEC).
According to Paxos’ official statement, BUSD will be redeemable until February 24, 2024, which is the likely date of its exit from the market.
Investors are moving to USDT because it is near the highest capital ever
As the market cap of Tether (USDT) continues to rise steadily, approaching an all-time high, investors are paying attention and making strategic moves. According to data from CoinMarketCap, the current market cap of USDT is $82.9 billion (USD), close to its previous peak of $83.2 billion, which was reached in May 2022. This upward trajectory has prompted investors to diversify their portfolios and explore alternative stablecoin options. .
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Also, investors are attracted to USDT due to its stability and peg to the US dollar, which provides a reliable store of value amid market volatility. With its widespread acceptance and liquidity, USDT has become the preferred choice for traders, providing a convenient and secure way to preserve their capital during volatile market conditions.
At the time of writing, USDT is trading at $0.9780 per coin with a 24-hour price increase of 1.38%.
Featured image from iStock and charts from Tradingview and CCData
