After Paxos, the blockchain company that created the BUSD stablecoin, announced that it could not produce the dollar-pegged crypto asset, nearly $5 billion in BUSD stablecoins were redeemed, reducing the overall supply of BUSD in circulation. Since the announcement on February 13, 2023, BUSD has seen a significant decrease in dominance and has fallen out of the top ten cryptocurrency assets by market capitalization.
The redemption of approximately $5 billion in BUSD stablecoins has reduced the amount of BUSD cash in circulation to about 11.1 billion, down from an inadequate supply of 16.1 billion. Despite the many stores decreases, the BUSD has remained at par with the US dollar over the previous 12 days.
Binance’s reserve portfolio revealed that the crypto exchange held $9.01 billion in BUSD as of February 25, 2023, with the stablecoin having a 24-hour trade volume of approximately $6.84 billion globally. According to coingecko.com statistics, most BUSD trades on Saturday were paired with the stablecoin tether (USDT), with the Turkish lira accounting for two.80% of all BUSD trades.
BUSD currently accounts for 1.007% of the $1.1 trillion crypto financial system, though its dominance has decreased significantly over the last 12 days. BUSD dropped out of the top ten crypto coin rankings this weekend, trailing Dogecoin (DOGE) with a market cap of around $11.12 billion to DOGE’s $11.24 billion. BUSD has the eleventh largest market valuation of the thousands of crypto assets, with a market cap less than DOGE and greater than lido-staked ether (STETH).
The decline in BUSD’s dominance and fall from the top ten cryptocurrency assets by market capitalization is attributed to Paxos’ decision not to issue BUSD stablecoins. However, cryptocurrency experts believe that the market for BUSD will improve as regulatory authorities scrutinize different stablecoins like tether (USDT) and USD coin (USDC).
The decline in BUSD’s dominance could also be attributed to increased competition from other stablecoins, such as the Gemini greenback (GUSD) and the Binance USD (BUSD), which have gained popularity in recent months.