USDT’s dominance of the stablecoin market has risen to its highest level since November 2021. Meanwhile, the supply of Binance-backed BUSD has shrunk by about $2 billion.
According to DeFillama, the top three stablecoins control about 92% of the market. USDT accounts for 49.18%, with Circle’s USD coin in second place at 31.05%, and BUSD rounding out the top three at 11.52%.
Stablecoin Market Capitalization Drops to $137 Billion
According to a report by CryptoCompare, the total market capitalization of stablecoins fell for the tenth consecutive month to $137 billion in January, the lowest since 2021.
USDT’s capitalization rose 0.82% to $66.7 billion, while its main competitors, USDC and BUSD, fell 2.27% and 3.97% to $43.1 billion and $16.1 billion, respectively. The market value of lesser-known coins such as True USD (TUSD) and the failed algorithmic stablecoin TerraClassicUSD (USTC) rose 24.5% and 13.1% to $940 million and $225 million, respectively.
BUSD had a rough start to the year
The stablecoin BUSD is having a rough start to the year. On January 10, Bloomberg reported that its reserves were repeatedly left without more than $1 billion in collateral due to mismanagement. In addition, Binance admitted to keeping collateral for BNB Smart Chain and BNB Beacon Chain tokens in the same wallet as customer funds.
The rumors surrounding the exchange provoked a massive withdrawal of assets by users: in the last 2 months, it has increased by 25%. Changpeng Zhao, meanwhile, continues to insist that Binance’s balance sheet is fine – and recently even tweeted that shrinking cryptocurrency companies will face existential consequences in twenty years.
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