BUSD Fell To #4 In The Stablecoin Rankings, Here Is Why

According to CoinMarketCap data, the market value of the US dollar-pegged Binance USD (BUSD) stablecoin has dropped by over $1 billion over the last 30 days, placing it in fourth place among other stablecoins.

Source: CoinMarketCap

The BUSD market cap is currently at $4.3 billion, down 29% from $5.54 billion on May 18 at the time of writing. Since December 2022, when its market worth exceeded $23 billion, the stablecoin has been in a declining trend.

Following FTX's abrupt demise in November 2022, significant developments surrounding Binance coincide with the decline in BUSD's market valuation. A claim that the US Department of Justice might target Binance in December 2022 resulted in net withdrawals of $3.6 billion over the course of seven days. Massive BUSD redemptions from market makers were seen on the exchange, including more than $245 million from Jump Finance.

In September 2019, Binance and Paxos Trust collaborated to launch the BUSD stablecoin. Paxos publishes and owns the product, and Binance has a brand license. The alliance presented new difficulties for Paxos. The U.S. Securities and Exchange Commission allegedly filed the company with a Wells notice in February saying that BUSD was an unregistered security.

Following the investigation, Paxos was told to cease issuing BUSD by the New York Department of Financial Services. BUSD's market share was significantly reduced as a result of all of these events, falling from $15.88 billion on February 12 to $8.38 billion on March 13.

The SEC's complaint against Binance for allegedly providing unregistered securities on June 5 dealt the company its most recent blow. 13 allegations were brought against the exchange by the US regulator, including unregistered offers and sales of the BNB and BUSD coins.

Over the past year, there have been some shifts in the market domination of stablecoins tied to the U.S. dollar, with Tether (USDT) returning to its all-time high despite the market capitalization of other stablecoins decreasing.

Market share for Circle's USD Coin (USDC) fell from 34.88% in May 2022 to 23.05% in May 2023. BUSD's market share fell from 11.68% to 4.18% within the same time span, while Dai's DAI's share of the cryptocurrency market fell from 4.05% in May 2022 to 3.66% today.

On the other side, USDT is expanding. In May, the stablecoin had a 65.89% market share, up from 47.04% in May of last year. While USDC's market cap has decreased from a high of $55 billion to just $29 billion, its value has increased to $83.1 billion.