The balance of Binance USD (BUSD) held on exchanges fell below 9 billion tokens as Tether (USDT) became the dominant stablecoin, accounting for 55% of the market cap of the stablecoins. rice field.

As the balance shifts within the stablecoin market, Ethereum (ETH)’s dominance over the total market capitalization of the top four stablecoins continues to increase.

Supply of BUSD

The chart below shows the total supply of BUSD held on cryptocurrency exchanges as an orange line, showing a sharp decline in BUSD supply since mid-February. As of March 3, the amount of BUSD held on exchanges is just under 9 billion.

BUSD Balances on All Exchanges (Source: Glassnode)
BUSD Balances on All Exchanges (Source: Glassnode)

BUSD’s popularity took a hit on February 13 when the U.S. Securities and Exchange Commission (SEC) issued a warning to BUSD issuer Paxos, demanding that it halt further BUSD production. A few hours later, Paxos announced that from February 21, 2023, he would stop issuing BUSD.

Between February 13th and February 17th, Binance lost more than 16% of its BUSD holdings, causing BUSD’s market cap to drop by 15% to $13.7 billion. The $9 billion currently held on exchanges is down 38% from the $14.5 billion recorded on February 12th.

according to crypto slate Analysis shows that the supply of BUSD on exchanges has been declining since mid-November 2022. Data shows that in December 2022 he withdrew over 3 billion of his BUSD tokens from exchanges. This number is the SEC’s warning to Paxos. In light of recent events, Coinbase has announced that from March 13th he will suspend trading of BUSD.

USDT Claims Space

The figures for November 2022 show that the dominance of BUSD is increasing while the supply of USDT is declining. At the time of writing, the narrative has turned in the opposite direction as BUSD supply shrinks and USDT gains dominance.

Stablecoin Market Dominance (Source: Glassnode)
Stablecoin Market Dominance (Source: Glassnode)

The chart above represents the market share of the top four stablecoins: BUSD, USDT, USD Coin (USDC) and DAI (DAI). USDT currently accounts for 55% of the total supply of the top four stablecoins and dominates the remaining three.

Binance CEO Changpeng Zhao (CZ) noticed a shift in the balance between stablecoins on February 17th. Noting that USDC is falling with his BUSD, he tweeted:

“The BUSD market cap has decreased by $2.45 billion (from 16.1 billion today to 13.7 billion), most of which has moved to USDT.

USDT market cap +2.37 billion (from 6.78 billion to 7.01 billion)

USDC also decreased by -739 million (from 42.3 billion to 41.5 billion)

The landscape is changing. ”

Ethereum Advantage Over Stablecoins

Regardless of the shift between stablecoins, ETH’s dominance over the total supply of the top four stablecoins remains strong.

The chart below shows ETH market cap and total stablecoin value as black and green lines respectively.

Ethereum and Stablecoin Dominance (Source: Glassnode)
Ethereum and Stablecoin Dominance (Source: Glassnode)

ETH has completely dominated the top four stablecoins since early 2020, except for a brief period in the summer of 2022 when the stablecoin beat ETH. However, after experiencing a brief similar stablecoin victory in November 2022, ETH consolidated its position against stablecoins and has remained resilient ever since.

By Jules

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