After Paxos, the blockchain company that minted the BUSD stablecoin, announced that it would no longer produce the dollar-pegged crypto asset, nearly $5 billion worth of BUSD stablecoins have been redeemed, reducing the overall supply of BUSD in circulation. Since the announcement on Feb. 13, 2023, BUSD has seen a significant decrease in dominance and has fallen out of the top ten crypto assets by market capitalization.
The redemption of almost $5 billion worth of BUSD stablecoins has reduced the number of BUSD coins in circulation to approximately 11.1 billion, from an initial supply of 16.1 billion. Despite the significant decrease in supply, BUSD has remained at parity with the U.S. dollar throughout the past 12 days.
As of Feb. 25, 2023, Binance’s reserve portfolio showed that the crypto exchange held $9.01 billion in BUSD, with the stablecoin having a 24-hour trade volume of around $6.84 billion globally. According to coingecko.com stats, the majority of BUSD trades were paired with the stablecoin tether (USDT), with the Turkish lira accounting for 2.80% of all BUSD trades on Saturday.
Currently, BUSD accounts for 1.007% of the $1.1 trillion crypto economy, with its dominance decreasing significantly over the past 12 days. BUSD was officially removed from the top ten crypto coin positions this weekend, falling below dogecoin(DOGE) with a market cap of around $11.12 billion compared to DOGE’s $11.24 billion. As of writing, BUSD is the 11th largest market valuation out of the thousands of crypto assets in existence, with a market cap below DOGE and above lido staked ether (STETH).
The decrease in BUSD’s dominance and its fall from the top ten crypto assets by market capitalization is attributed to Paxos’ decision to no longer issue BUSD stablecoins. However, experts in the crypto industry believe that BUSD’s market position may recover as other stablecoins, such as tether (USDT) and USD coin (USDC), face scrutiny from regulatory authorities.
The decrease in BUSD’s dominance may also be a result of increased competition from other stablecoins, such as the Gemini dollar (GUSD) and the Binance USD (BUSD), which have been gaining popularity in recent months.