BUSD market cap down 90% from all-time high as stablecoin winds down
BUSD’s market capitalization has fallen 90% from its all-time high of $23.49 billion on Nov. 15, 2022, according to CoinMarketCap data. The stablecoin’s current market cap is around $2 billion — down over $21 billion from its all-time high.
In early 2023, BUSD-issuer Paxos was the recipient of regulatory actions from the U.S. Securities Exchange Commission and the New York District of Financial Services.
The news comes as the market share of the First Digital USD stablecoin continues to grow — now at a market cap of over $470 million, according to CoinGecko. The stablecoin issued by Hong Kong-based First Digital Group launched in June of this year.
Binance has encouraged users to convert their BUSD balances to FDUSD. In August, the crypto exchange added that users can trade BUSD for FDUSD with zero trading fees or convert BUSD balances to FDUSD at a 1:1 ratio.
Binance and Paxos phasing out BUSD support
Binance and Paxos have said they will gradually phase out support for BUSD.
In February of this year, Paxos said it was halting the minting of new stablecoins. The announcement came after Paxos received an order from the NYDFS to stop issuing the stablecoin. On the same day, the SEC said it would sue Paxos for listing BUSD, alleging it is an unregistered security. “BUSD will remain fully supported by Paxos and redeemable to onboarded customers through at least February 2024,” the stablecoin issuer said in an announcement.
This was followed in late August by an announcement by Binance that it would gradually reduce support for BUSD products on its platform by February 2024. Also, Binance announced plans to suspend BUSD loans on cross margins in September.
Today, Binance stated it is closing all outstanding BUSD loans and collateral positions.
CoinGecko’s Q3 Crypto Industry Report
Tuesday’s report from CoinGecko outlined how the market cap of major stablecoins dropped significantly in the third quarter. “BUSD saw the largest percentage decline of -45.3%, with a drop of -$1.87 billion,” CoinGecko said.
The report also highlighted notable changes in market capitalization rankings of major stablecoins throughout the period. “BUSD slid further from 18th position to 27th position, as Binance announced support for the stablecoin will be phased out by February 2024,” the report noted.
Coingecko contrasted this by noting that Tether’s USDT market cap remained flat in Q3. It added that USDT saw a 2.6% gain in its stablecoin market share over the same period.