USDT (USDT), the stablecoin issued by Tether, broke a new all-time market capitalization of over $83 billion as it continues its market dominance over stablecoins.
The new ATH market cap for the USDT stablecoin comes in a year when other stablecoin issuers are struggling to stay afloat in the face of regulatory wrath. The sighting was also made by Changpang Zhao, aka CZ, CEO of cryptocurrency exchange Binance.
CZ drew attention to BUSD, a Binance stablecoin issued by Paxos, in a quote tweet. The CEO of Binance stated that “BUSD was a fully regulated stablecoin that was ‘capped’ by NYDFS at $23 billion and currently has a market cap of $5 billion and since then USDT has experienced tremendous growth.”
BUSD, a fully regulated stablecoin, was “capped” (not a new coin) by NYDFS at $23 billion. Now with a market cap of $5 billion.
Since then, USDT has experienced tremendous growth. https://t.co/KqBkDK71WS
— CZ Binance (@cz_binance) June 1, 2023
Earlier this year, the New York Department of Financial Services (NYDFS) ordered Paxos to stop issuing any new BSDs due to violations of security laws.
At a time when USDT has reached its ATH market cap, its competitors such as the USD Coin (USDC) issued by Circle or Binance’s BUSD are struggling to maintain their market dominance. USDC, the second largest stablecoin by market capitalization, is at $28.8 billion with a margin of over $50 billion. For context, UDC’s market dominance at one point was approaching that of USDT and its market capitalization reached an ATH of $55.8 billion in June 2022.
While the prolonged bear market in 2022 took its toll on both the stablecoins, which saw a drop in market cap after June 2022 highs. Half have been returned.
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A major reason for the decline in market share of other stablecoins can be attributed to oversight by United States regulatory authorities added to the banking crisis. Following the ban on re-mining BUSD for alleged security breaches, the BUSD market cap declined rapidly as users began converting their BUSD to other stablecoins.
Similarly for USDC, the major crisis came in the form of the collapse of Silicon Valley Bank, where the stablecoin issuer held approximately $3.3 billion in reserves. This stirred up the market and subsequently led to the disintegration of the US dollar. Although USDC rallied the next day, it took a significant toll on its market cap, as fear of a total crash caused many to convert their USDC into other stablecoins.
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