Tether's Domination is Strengthening

by Flyerim
2 minutes
Tether's Domination is Strengthening

Tether's Domination Is Strengthening

Initiatives for Paxos in the US shook the stablecoin world. The market cap of BUSD has dropped to $12.8 billion. The market capitalization of market leader Tether increased by approximately $2 billion.

Initiatives for Paxos in the US shook the stablecoin world. After warnings from US regulators, Paxos stopped printing BUSD. The SEC has sent a Wells notice to Paxos that it will be investigated. Regulators are emphasizing that Binance's stablecoin, BUSD, is a unregistered security. It is stated that with the stablecoin move from the USA, there may be sharp movements in the 137 billion dollar market. Investors are also worried about the future of stablecoins.

The cryptocurrency market did not price the developments for Paxos negatively. The crypto market cap has increased by over $2 billion since February 13. Paxos' competitors, on the other hand, are competing to take advantage of BUSD's problems. The market cap of the third largest stablecoin, BUSD, has dropped from $16 billion to $12.8 billion.

The market value of the market leader Tether (USDT), on the other hand, increased by approximately 2 billion dollars after these developments and exceeded 70 billion dollars. Tether holds 52.6 percent of the stablecoin market. The market cap of Circle's second-largest stablecoin, USD Coin (USDC), also rose by $700 billion. USDC owns more than 31 percent of the market with $42 billion. “There is so much demand for dollar-backed stablecoins that they can't go away,” said Alex Miller, CEO of Bitcoin developer network Hiro.

Analytical firm Kaiko cited the large use of BUSD on the Binance exchange as one of the reasons why the market did not react negatively. Kaiko noted that BUSD has limited influence in other areas of the crypto world. The US move towards Binance's stablecoin has also boosted trading on rival exchanges. According to Kaiko, Bitcoin liquidity on Binance has dropped by close to 30 percent since February 1, while Coinbase has increased by 15 percent. Arcane Research analyst Vetle Lunde said the BUSD step is "not likely to represent a critical and major structural change in the market at this time." Lunde pointed out that sanctions against USDC and USDT could have more dramatic consequences.

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