Markets

BUSD leads to a decrease in stablecoin transfer volume

Stablecoin transaction volumes are down in the past week, down 19.2% in the seven days through Sunday. data from Dunerevealing that BUSD has led the decline in volume.

BUSD transaction volume segment

The recession was driven by a significant slowdown in the use of BUSD by Binance, which fell by 353.3% over the course of the week. This marks the latest drop in the stablecoin’s general downward trajectory in recent months.

Along with the volume of transactions, the market capitalization of US Dollar Bank also declined. On April 15, it fell below $7 billion, marking the lowest amount of BUSD traded since April 2021.

BUSD Capital Market (Source: BeInCrypto)

BUSD Market Capitalization: (Source: BeInCrypto)

Stablecoin supply declining

Binance USD is not the only stablecoin experiencing weak demand. Other major tokens that have seen their overall supply dwindle include the well-known dollar-pegged stablecoins USDC and TUSD.

BeInCrypto reported that the four largest stablecoins saw their market capitalization shrink by 23% from peak levels. In fact, since its peak, the supply of US dollars has fallen by $20 billion, and the supply of US dollars has lost $11 billion. While TUSD and Dai supplies are less dramatic, they also fell $1.3 billion and $4.4 billion, respectively.

It should be noted that different market peak boundaries for stablecoins were observed during a broader cryptocurrency bear market that saw a shift in investment distribution in favor of less volatile assets. From accounting for nearly half of all crypto investments at one point, stablecoins now account for nearly 10% of the total cryptocurrency market cap. Instead, in 2023, the liquidity has moved to BTC and ETH.

Ongoing BUSD challenges

Looming over the fate of BUSD is a possible enforcement action by the US Securities and Exchange Commission (SEC) against its issuer, Paxos.

After news of the SEC investigation was announced in mid-February, the supply of US dollars shrank in the weeks that followed by 60%.

According to BeInCrypto data, ranked by market capitalization, BUSD has now fallen to 13th among cryptocurrencies. With a series of altcoins outperforming the dollar-pegged Binance token, the Shiba Inu briefly outperformed the stablecoin earlier this week.

TUSD and USDC both maintain their positions at the top, being the third and fifth most supplied.

Disclaimer

Adhering to the Trust Project’s guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently check the facts and consult with a professional before making any decisions based on this content.

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