Cryptocurrency

Tether shines as leading stablecoin in evolving market

After the FTX catastrophe in November, the stablecoin market changed dramatically, losing $12 billion in value.

Most recently, troubles with BUSD exacerbated the problem as the New York Financial Services Department (NYFDS) ordered Paxos to stop issuing tokens.

Stablecoin Balance - All Exchanges
Source: Glassnode.com

Glassnode data analyzed by crypto slate Tether has emerged as the clear winner of the market consolidation, despite ongoing and long-standing doubts about the token’s ability to meet its responsibilities.

Summary of stablecoins

Since November 2022, BUSD’s market share has halved, falling from 14% to 7% over the past four months.

The chart below shows the exchange balance peaking at $22 billion around mid-November 2022. Then, as the FTX saga took hold, a sharp drop found support levels around $14 billion.

However, as rumors of a BUSD reserve mismatch spread, another sell-off occurred, dropping the current FX balance below $8 billion.

Interestingly, since November 2019, Binance has consistently held the overwhelming majority of BUSD, with few other exchanges picking it up.

Exchange BUSD stablecoin balance
Source: Glassnode.com

On the other hand, DAI’s market dominance has remained relatively flat, accounting for about 4% of the market since November 2022.

Nevertheless, DAI held on exchanges has been trending downward since May 2022, as shown in the chart below.

Binance holds the most DAI with 120 million out of a total of 160 million. However, having cut his holdings for 2021 and 2022, he is now returning to late 2020 levels.

DAI held on the exchange
Source: Glassnode.com

USDC is enjoying the net gain from the decline of BUSD, increasing its dominance of the stablecoin market to 34%.

Exchange balances surged to near April 2022 highs. Mostly held on Binance, which currently accounts for 5 billion tokens, Crypto.com is his second with 645 million.

Balance of USD coins held on the exchange
Source: Glassnode.com

tether glows

Tether has benefited the most from the changing dynamics of the stablecoin market. The chart below shows a significant upward trend in USDT balances on the exchange.

Today, it has over 55% market control, with Bitfinex holding the majority stake, increasing its share from 1.8 billion in June 2022 to over 10 billion today.

However, Bitfinex offloaded about $2 billion USDT this week, leaving about $16 billion on the exchange.

Tether held on exchanges
Source: Glassnode.com

While USDC’s dominance remains flat, USDT has gained nearly 8% market share over the past five months, well ahead of the top dollar-backed stablecoins.

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