Following SEC's Action, BUSD Supply Plunged To $10B

Investors are leaving the BUSD market and moving their funds into USDT as a result of multiple unfavorable news stories on this stablecoin.

Investors are moving their funds away from the BUSD market and into USDT because to the numerous rumors and conjectures surrounding this stablecoin. The third-largest stablecoin, Binance USD (BUSD), is seeing a sharp decline as a result of a 60% drop in supply since the middle of February. The market value of stablecoins was once above $16 billion, but it has subsequently dropped to somewhere around $10 billion. Additionally, the market share of Binance USD has decreased to 7.3% from about 20% the year before. The capital flight caused by investors' shifting opinions increased Tether's (USDT) market share to 52%.

BUSD's decision to depart the market is attributable to the US Securities and Exchange Commission. (SEC). Paxos, a stablecoin that is distributed by Binance, was sued by the regulatory authority on February 13. Stated to an article published by the Financial Times in London on March 1, analysts believe that the outflow might operate as a “drag to Binance’s financial performance.” Ilan Solot, co-head of digital assets at Marex Solutions, stated that “this would undoubtedly affect Binance’s bottom line given BUSD is such an essential element of the company.” In addition, Coinbase has made the announcement that it would remove BUSD from its exchange since the stablecoin “no longer matches our listing criteria.”

However, Binance CEO Changpeng Zhao claimed that BUSD trading has never been a "major business" for the organization. He also said that Binance will eventually provide a sizable number of other stablecoins.