Binance's flagship stablecoin, BUSD, has experienced a sharp decline in supply as more cryptocurrency traders abandon the beleaguered asset, resulting in a significant drop in market capitalisation. BUSD's market capitalisation has tumbled from its highest ever valuation of $23.49 billion in November 2022 to just $6.68 billion today, with its market share dropping to around 5% from approximately 22% last year. This significant slump in BUSD's market share has seen Tether's (USDT) market share increase to 65% as investors shift their attention to more reliable stablecoin options.
The rapid decrease in BUSD's supply has been attributed to several factors, including increased regulatory scrutiny from the New York Department of Financial Services (NYDFS) and the Securities and Exchange Commission (SEC). Paxos, the issuer of BUSD, has been ordered to halt its issuance by NYDFS, and the SEC plans to sue Paxos for violating investor protection rules. The SEC alleges that BUSD is an unregistered security, a claim that Paxos vehemently refutes. However, the ongoing regulatory tussle with the SEC could take years, and investors who keep BUSD listed on their platforms may face legal action and hefty fines if the SEC wins its case and the court deems the stablecoin unregistered securities.
Coinbase has already delisted the Binance-branded token in response to the regulatory threat, stating that it no longer meets its standards. This move is expected to increase the downward pressure on BUSD's value and reputation, further fueling concerns about its long-term viability. Additionally, the recent collapse of the Terra algorithmic stablecoin in May, which wiped billions off the broader cryptocurrency market, has refocused US regulators' attention on the $150 billion stablecoin industry. Regulators are increasingly concerned that stablecoins without sufficient reserve-backing are prone to bank runs, further intensifying the pressure on BUSD's dwindling supply and value.
In conclusion, BUSD's diminishing supply and market share are a cause for concern, highlighting the ongoing instability and regulatory challenges in the cryptocurrency market. As investors pivot towards more reliable and stable stablecoin options, BUSD's value and reputation are likely to continue facing downward pressure, leading to a further decline in demand and supply.
Disclaimer:
GlobalStablecoins.com is an informational website that provides news about coins, blockchain companies, blockchain products and blockchain events. Don’t take it as investment advice. Speak to an advisor before you risk investing in an ICO, Cryptocurrencies, Cryptoassets, Security Tokens, Utility Tokens, Exchange Tokens, Global Stablecoins, Stablecoins or eMoney Tokens. GlobalStablecoins.com is not accountable, directly or indirectly, for any damage or loss incurred, alleged or otherwise, in connection to the use or reliance of any content you read on the site.
Affiliate Disclosure / Sponsored Posts:
If a Sponsored Post contains any mention of a crypto project, we encourage our readers to conduct diligence prior to taking further action. GlobalStablecoins.com does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
GlobalStablecoins.com may receive compensation for affiliate links. Should you perform activities in relation to an affiliate link, it is understood that some form of compensation might be made to GlobalStablecoins.com. For example, if you click on an affiliate link, and sign up and trade on an exchange, GlobalStablecoins.com may receive compensation.
Before you invest in Cryptoassets you should be aware of the following,
Cryptoassets are considered very high risk, speculative investments.
If you invest in Cryptoassets you should be prepared to lose all your money.
All Sponsored Posts are paid for by crypto projects, coin foundations, advertising firms, PR firms, or other marketing agencies. GlobalStablecoins.com is not a subsidiary of any marketing agency, nor are we owned by any crypto or blockchain foundation.
The purpose of offering Sponsored Posts to our advertisers is to help fund the day-to-day business operations at GlobalStablecoins.com.
If you come across a Sponsored Post which you believe is fraudulent and/or “scammy,” please contact us and we will perform an immediate investigation
All Rights Reserved | GlobalStablecoins.com