BUSD Supply Decreases Amid Stablecoin Market Volatility

02/20/2023 00:45 • NFT Newsflash • 142 views

On February 20, according to statistics, 28.61 BUSDs have been withdrawn from the market in the past six days, that is, the supply has decreased by 17.77% during this period. In the past 30 days, the supply of BUSD has decreased by 19.2%. When Paxos, the issuer of stable coins, announced that no new BUSD stable coins would be issued, the current BUSD was 16.1 billion US dollars. According to Nansen’s exchange portfolio tool, as of February 19, Coin An currently holds 10.9 billion BUSD. The indicators show that of the 67.71 billion US dollars of global transactions of cryptoeconomy on the same day, BUSD still accounts for 7.24 billion US dollars, accounting for 10.7% of the total.

Data: The supply of BUSD has decreased by about 18% in 6 days, and the market value of other stable currencies of Paxos has also decreased significantly

Interpret the above information:

Stablecoins have played a significant role in the growth and stability of the cryptocurrency market, offering traders a relatively risk-free alternative to volatile digital assets. BUSD has been one such stablecoin, issued by Paxos with each coin backed by the US dollar. However, recent statistics indicate that the supply of BUSD in the market has decreased significantly.

According to data, 28.61 BUSDs have been withdrawn from the market in the past six days, leading to a decrease in supply by 17.77% over this period. This trend has continued over the past 30 days, culminating in a decrease of 19.2% in the supply of BUSD. The trend appears to have been initiated by Paxos’ announcement that no new BUSD stablecoins will be issued, resulting in the current BUSD reaching $16.1 billion.

The report also indicates that as of February 19, Coin An holds 10.9 billion BUSD, which represents a significant portion of the total supply of BUSD. Despite this, the stablecoin still accounts for $7.24 billion in the global cryptoeconomy transactions, representing 10.7% of total transactions.

The decrease in BUSD supply, in part, can be attributed to the recent market volatility triggered by a range of other cryptocurrencies, including Bitcoin, which has witnessed a significant surge in value. The current cryptocurrency market is characterized by significant bullish activity, leading to increased demand and decreased supply of stablecoins. BUSD, one of the most sought-after stablecoins in the market, is hence, feeling the brunt of this trend.

In conclusion, it is evident that the BUSD supply has decreased significantly in the past few weeks. While the trend might appear worrisome, it reflects the gravitational pull of the cryptocurrency market on stablecoins, brought about by the recent bullish trends in the market. It remains to be seen how BUSD and other stablecoins will navigate these challenges as the market continues to evolve.

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