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Why the Binance stablecoin (BUSD) is leaving the market

At its peak, BUSD ranked third among stablecoins, with a market capitalisation of up to $23 billion. But Binance CEO Changpeng Zhao's (CZ) attempt to force out the competition has failed. In 2024, BUSD will leave the market for good.



In 2022, to strengthen his influence, CZ took the bold step of announcing the mandatory conversion of some incoming stablecoins on Binance to BUSD. This yielded good results, and in the following 90 days, its capitalisation skyrocketed by 11%.

Circle (the issuer of USDC) found this decision disruptive and filed a complaint with the New York Department of Financial Services (NYDFS). In February 2023, the regulator filed a pre-trial complaint against Paxos for issuing BUSD, causing the company to stop minting the coin further. Support for BUSD will be terminated in early 2024.

After the Paxos announcement, BUSD trading went down, and Binance started looking for a replacement.



The regulatory pressure came for a reason. A little earlier, American media published reports about the BUSD's insufficient collateral since a clone of it was printed on the BSC (Binance Smart Chain) network, and the gap between the reserve and supply exceeded $1 billion in certain months. In addition, analytical agencies found instances of clients' funds being mixed with the company's assets. Later, Binance admitted mistakes in its financial management.



BUSD's damaged reputation and the impending withdrawal of support from Paxos left the crypto exchange with no other option but to abandon stablecoin. On 31 August, Binance officially announced that it would stop supporting BUSD in February 2024 and informed customers that they needed to convert it to other coins.

This news hurt another cryptocurrency exchange coin, BNB. Due to the increased regulatory pressure on Binance, it's already performing poorly in 2023.



CZ tried to expand the use of its stablecoin but wasn't sufficiently accurate about how it was managed. By introducing zero fees in 2023, the use of coins other than BUSD was encouraged.

In March, Binance advertised a move to TUSD, but in June, this stablecoin lost its peg to the dollar, trading at a 20% discount. In a press release on 31 August, the crypto exchange offered to switch from BUSD to Hong Kong First Digital Group's FDUSD, a coin that emerged in June 2023.


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Institutional investors prefer Solana over other altcoins

Institutional investors were the main drivers of the cryptocurrencies' growth in 2020 and 2021. The Grayscale trust fund alone acquired over 600,000 BTC (approximately $16 billion).



These market players' preferences can form a long-term trend. An analysis of investments in exchange-traded funds shows Solana overtaking Ethereum in 2023.

Various funds have accumulated around $26 million in Solana over the past 12 months. The figure is modest but contrasts strongly with the outflow of $102 million from Ethereum and $51 million from Tron.



Investors favour Solana because it's one of few Layer-1 blockchains with high transaction completion speeds (just a few seconds), minimum fees (less than $0.01) and high protection (1,981 validators).



Solana was previously criticised because of constant failures, but it seems developers may have managed to normalise the network's operations. Its work has been stable for the past six months, resulting in beneficial business expansion.

In August, the Solana Pay service was added by e-commerce platform Shopify, whose turnover exceeds $400 billion a year. In addition to that, yesterday, reports emerged about the blockchain's integration into Visa's payment system, leading to the coin strengthening slightly.



Visa uses the blockchain for instant and cheap intra-bank exchange transactions. Payments are made using the USDC stablecoin, around $700 million of which has already been minted by Solana.



If developers manage to provide reliable network operation, the network's partnership with such major players will attract additional attention. The low base effect is an additional motivation for investors, as SOL is trading at a 90% discount from its high.

However, there's a factor limiting its growth. A court judgment on whether and how much to compensate FTX investors and clients for their losses is fast approaching. The collapsed crypto exchange is estimated to have $700 million worth of SOL in its accounts.


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K33: Ethereum awaits a hot October

After Ethereum switched to a Proof-of-Staking protocol, it ran into pressure from American regulators. According to the SEC, the offer of passive income via staking means the coin should be considered a security. This made it possible for the supervisory authority to come down on cryptocurrency exchanges and financial companies with pre-trial claims that they violated securities law. To resolve the conflict, many of the targets of the legal action closed access to staking and paid huge fines.

This affected the investment attractiveness of the altcoin, which is why it's 12% behind Bitcoin in 2023.



Analytical agency K33 Research suggests that the situation will soon change dramatically since October is the deadline for considering applications to launch ETFs on Ethereum futures.

The event could significantly fuel interest in the altcoin. In 2021, Bitcoin's price surpassed $60,000 based on expectations stemming from the launch of a similar fund for the pioneer cryptocurrency.



The likelihood of approval is high for several reasons. First, Bitcoin futures ETFs are already operating in the US. Second, in August, the SEC lost a court case over its denial of Grayscale's application to convert a trust fund into a spot Bitcoin ETF. An appeals commission ruled that the refusal was "arbitrary and capricious" since the regulator failed to raise significant arguments (see our article for more info). Now, the SEC must either approve the application to convert the fund or find "ironclad" arguments for rejecting it.

Grayscale shares, which were trading at a significant discount, shot up as market participants assumed the resolution of the conflict was in its favour.



Anticipating a series of victories, investment companies have intensified their applications for spot Ethereum ETFs, too. For example, ARK Invest and 21Shares applied jointly yesterday. Some media felt that this was the first such application of its kind, but VanEck hastened to disappoint them.



The list of applicants will likely soon expand. Grayscale won't mind converting its Ethereum trust fund to spot ETFs. If the SEC accepts the application from ARK Invest and 21Shares, the deadline to consider it will be late May 2024.

All these events could revive interest in Ethereum among institutional investors, who have withdrawn more than $100 million from exchange-traded funds operating around the world over the past 12 months.


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Binance is losing market share fast

Binance has had a rough go in 2023. A number of regulators around the world initiated investigations into it, with Australia even withdrawing its license. Because of financial management concerns, Paxos refused to continue minting BUSD, with the stablecoin slated to leave the market for good in February 2024.

American media predict that Binance will face severe charges from the US Department of Justice, citing the resignations of a dozen key managers this year. The list includes Chief Strategy Officer Patrick Hillmann, General Counsel Han Ng, APAC Head Leon Foong, and Global Head of Intelligence and Investigations Matthew Price.

The worsening situation in the global arena and investor fears have led to some clients subsequently running for the doors. Binance's share in the spot market decreased by 12% in 2023, showing the worst result among major players.



The trend intensified in August, with spot trading seeing a 2% cut and derivatives trading experiencing a 3.7% decline compared to July.



The BNB coin went underwater, trading this year at an 11% decrease.



Meanwhile, the crypto exchange remains a major market player. Its share now accounts for 38.5% of spot trading and 53.5% of derivatives trading.

The loss of Binance's positions happens in times of a decline in global trading. The monthly volume of spot trading decreased to $475 billion, which is the worst performance since March 2019. Even Grayscale's interim victory over the SEC failed to encourage participants, with the firm recording a 7.8% decline from July.



This year turned out to be worrisome for Binance. However, it continues to expand. In August, it became the first licensed cryptocurrency exchange in El Salvador. If the company manages to establish communication with other regulators and avoid new accusations, it has every chance of regaining its lost market share.


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$45,000 is Bitcoin's fair value price based on energy value

Back in 2019, Charles Edwards, the founder of Capriole Investments, presented Bitcoin's fair value model, which is still quite relevant. It's based on an assessment of the volume and cost of energy consumed, as well as the supply growth rate.

The model assumes that a high level of human effort is associated with high expectations and an increase in demand for the produced product. If demand declines or an 'employee' discovers another, more advantageous area, their efforts will fall to zero.

This statement results in several hypotheses that set up the rule in practice. First, significant price growth leads to the activation of miners and an increase in Bitcoin's energy value. Second, when price growth is caused by speculations without a corresponding boost in energy consumption, the price will fall back to the energy value level.



As the chart shows, the model and Bitcoin mostly move in lockstep. The only exception is the drop in energy value seen in 2013-2014 because of miners' transition to ASICs and a sharp decline in energy consumption.

Last year, the indicators diverged once again, but in the opposite direction. Currently, Bitcoin's fair energy value is $45,300, while its mining cost is $21,600.



According to the model, a sharp drop in energy consumption often signals the best time to exit the market. However, when it rises sharply, it's the perfect time to buy.

Since 2022, the network's overall computational capacity has more than doubled to 389 EH/s, Bitcoin has lost 46% of its value, and the mining yield from a terahash of capacity dropped nearly four-fold to $0.06.



There's been no tech revolution in the past few years, and the network's hash rate has grown with support from the rollout of additional equipment. This increases Bitcoin's fundamental value since every mined coin is more expensive and implies long-term price growth, at least to the level of Bitcoin's energy value.

The model's description ends with the following words:

"As humans, our time is limited — it's our most valuable resource. What we choose to put our energy into, and therefore our time into, is our most valuable choice."


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It's hodlers' time. Short-term BTC holders' reserves are at a 12-year low

The cryptocurrency market continues to drift amid low liquidity and volatility. Even a slight revival due to Grayscale's interim victory over the SEC didn't affect the metrics. The volume of coins changing hands declined to $2.4 billion a day. These levels were last seen in October 2020.



The realised profit and loss indicators have also dropped to three-year lows for both derivative and spot trading.



Prolonged calm and increased uncertainty have caused short-term holders to flee. A drop in interest in cryptocurrency trading resulted in this group's holdings dropping to 2.5 million BTC, the lowest level since 2011.

On the other end of the spectrum, long-term holders set a new record by accumulating 14.7 million BTC.



Periods of calmness are typical for the cryptocurrency market between the sell-off and bull rally phases. If we compare the cycles, starting from reaching major local highs, the current consolidation could last until early 2024.



This perfectly aligns with the Fed's monetary policy, which acts like a 'financial hoover' for regional markets and risky assets due to the regulator's high key interest rate. The Fed began its tightening cycle in March 2022, and in just two months, the Terra project (LUNA) collapsed because of a decline in investments. That triggered a wave of collapses of interconnected projects, and the market faced a massive coin sell-off.

Note: Terra's capitalisation growth was presumably due to a Ponzi scheme. The investigation is ongoing, and the founder of the project has been arrested.



The Fed is nearing the end of its hawkish monetary policy cycle as inflation in the US is near its 2% target level, and the banking sector is facing a crisis. Some experts assume that the regulator will stop at the 5.5% level it's already reached and start decreasing the key rate in early 2024.


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Solana storm: A $1.2 billion coin sell-off is coming

The series of 2022 collapses continues to affect the cryptocurrency market. Next up is the Solana network and its close business ties with the collapsed FTX. In mid-January, we warned that the sell-off of the reserves would lead to SOL's price declining. The time has almost come, and traders are betting on the cryptocurrency's fall.



On 11 September, an updated report was filed in court that covers 36,000 claims from clients for $16 billion and claims from partners, investors, and regulators for $65 billion.



The company's assets were estimated to be worth $7 billion, including $3.4 billion in cryptocurrency. The bankruptcy commission also hopes to return $17 billion that FTX invested in various projects and several hundred million dollars spent on charity.

In any case, there is a huge shortage of funds that can be used to repay the debt, which will lead to a sell-off of all existing assets. This will affect Solana investors most poignantly since, according to updated information, FTX has SOL worth $1.2 billion.



The liquidation plan is still undergoing approval. It's most likely to be assigned to Galaxy Digital, which aims to affect the market as little as possible. It's assumed that $100 million worth of assets will be sold every week. As such, the sale, which may begin this month, will last nine months.



Analysts at Matrixport suggest that the liquidation will result in SOL's price dropping to $10 as the sale pace at such volume doesn't play a significant role. The coin reserve of the FTX balance sheet accounts for 16% of the network's total market capitalisation.


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Trust and stability metrics for Coinbase, Binance and HTX reserves

Yesterday, Huobi rebranded to HTX. The crypto exchange explained this 10th-anniversary decision: H stands for Huobi, T stands for its close link to the TRON blockchain, and X stands for the Roman numeral for 10 and symbolises the main function ('eXchange').

Many users didn't like the new naming, as it reminded them of the failed FTX.



Justin Sun, officially recognised as the head of the crypto exchange only earlier this year after a number of uncomfortable questions from the community, is also controversial. Sun is also the founder of the TRON blockchain and the TRX coin, and he has been repeatedly accused by journalists of pumping the latter.



It's worth considering Glassnode's research to objectively assess the stability of the three major crypto exchanges, including Huobi. The agency analysed coin flows on Coinbase, Binance and HTX (Huobi) to find patterns similar to the bankrupt FTX.

Reserve reshuffling ratio

This indicator compares the transaction volume ratio to total reserves and is given for each cryptocurrency exchange from 0 to 1. If the exchange balance exceeds reserves over a long period, this may signal poor money management.



Coinbase leads in terms of this indicator. Binance has seen spikes in response to major events, such as the FTX collapse, after which the ratio returns to the 5% threshold. The situation is worse for HTX (Huobi), as a reduction in the balance of assets accompanies it. For FTX, the ratio remained consistently in the red zone due to the misappropriation of client funds by Alameda.

Trust rate

The indicator compares inflows/outflows from one crypto exchange to other exchange platforms across different asset groups.



Binance has the best numbers, showing mostly an inflow of funds. Coinbase has a strong USDC outflow to Binance. And HTX (Huobi) shows a strong outflow for all key assets.

Whales outflow rate

This indicator captures the withdrawal rate of coins by major players, calculated as the ratio between the weekly outflow of whales and the Bitcoin balance on the exchange.



Coinbase and Binance are doing fine, but FTX saw an outflow of whales after Terra (LUNA) collapsed in May 2022. HTX (Huobi) faced a whales outflow in recent months amid spreading rumours regarding the crypto exchange's insolvency. This was written about by Adam Cochran, Managing Partner at Cinneamhain Ventures.

Conclusion

By comparing the risk metrics of the three major crypto exchanges to FTX, Glassnode highlights the stable position of Coinbase and Binance. For HTX (Huobi), analysts note that some caution may be justified.


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The number of active addresses in Ethereum exceeded 1 million

Ethereum is celebrating the anniversary of its transition to a PoS algorithm. On 15 September 2022, the network declined miners' services in favour of validators. On the same day, SEC Chairman Gary Gensler announced that all PoS coins could be considered securities. According to Gensler, only securities have the privilege to provide passive income.

Promoting this narrative, the regulator sent out pre-enforcement action notifications to crypto companies in the US in early 2023 for engaging in staking. Most followed the SEC's requirements and prohibited their users from staking coins. This has hurt investment attractiveness, causing institutional players to withdraw $108 million from Ethereum funds over the past 12 months. At the same time, some altcoins have experienced an inflow of investments.



However, recent proceedings have exposed a weakness in the SEC's reasoning. When considering an appeal by Grayscale, the judges called the regulator's position "arbitrary and capricious" (see more in our article). Grayscale has applied to re-form its Bitcoin trust fund into an ETF. If the SEC is forced to approve it (everything is leading up to this), the company's next move will be to request to re-form its Ethereum fund into an ETF.

It's hard for the SEC to defend its position because the regulator lacks criteria to distinguish cryptocurrencies as commodities or securities. When Gensler was called before Congress, he couldn't answer that question clearly.

In anticipation of permission to open Bitcoin spot ETFs, investment companies rushed to apply for Ethereum spot ETFs. The SEC has now received applications from ARK Investment, 21Shares, and Hashdex, and the first US-based Ethereum futures ETFs are due to roll out in October. With the emergence of these funds, interest in altcoin investments will increase significantly among US investors.



At the same time, the international community's interest in Ethereum and staking is gaining momentum. Almost a quarter of all issued coins is staked for passive income, and the overall inflow covers the outflow from US platforms.



Ethereum maintains its leadership as a Layer-1 blockchain for various projects. Coinbase's recently launched Base is a Layer-2 network powered by Ethereum. The growing popularity of L2-based products is having a positive effect on Ethereum. On 13 September, for the third time in history, the number of active addresses exceeded 1 million daily.



Ethereum is leading the way as a crypto tool for passive income and is the first among blockchains that support smart contracts. The emergence of ETFs in the US will outweigh the negative influence of regulatory tightening and become a new growth driver for the altcoin.


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Players flee Axie Infinity. AXS token's value has fallen three-fold in a year

The NFT sector is suffering huge losses amid the cryptocurrency market's fall, with Play-to-Earn games being affected the most. According to all-time data, Axie Infinity collections still lead the NFT market with 20 million transactions and a $4.3 billion turnover. But in terms of last month's ranking, they're 29th.



Players are fleeing the platform. In January 2022, there were 2.8 million users. Now, however, that number is less than 350,000. In other words, the user base decreased by 88%.



The reason is simple: the lack of an opportunity to invest and earn. At the same time, the intra-game tokens used to upgrade and buy Axie pets dropped by 95% (valid for both SLP and AXS).



Players see no point in buying additional gaming elements or upgrading characters, as all the mid- and long-term efforts will be destroyed by the tokens' declining value. On top of that, it seems the gameplay itself isn't engaging enough.

Developers who continue to hand out coins from the reserves at a shocking pace are adding fuel to the fire. Another 200 million AXS, a quarter of the total issuance, will be unlocked within 3 years. The soonest such occurrence is expected to happen on 20 October, with 14.8 million AXS worth $67 million being unlocked.



Earning is the key to attracting players in PtE-model games. Since February 2022, players have mostly suffered losses, which resulted in expected disappointment. If the trend persists, AXS will drop even further, and the last users will leave the game.


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Escalation of the Binance vs SEC conflict

The SEC sued the crypto exchange and its CEO Changpeng Zhao for violating a number of US laws. These include the parent company (Binance Ltd) accessing American clients' funds, mixing client funds with company funds, violating the Securities Act (the SEC recognises a number of cryptocurrencies as securities) and misleading investors.

The regulator requested an extensive list of documents to conduct its investigation and received 220 documents that "consist of unintelligible screenshots and documents without dates or signatures", the SEC claimed. In response to a request from the SEC for some documents, the crypto exchange's subsidiary, BAM Trading, refused to provide them, saying that they simply didn't exist. However, the regulator managed to receive over 6,500 documents from the company that audited BAM.

The regulator has also called Binance US executives as witnesses and is particularly interested in the testimony of CEO Brian Schroeder. Instead of top executives, the crypto exchange provided mid-level managers and stated that the whereabouts of Schroeder, who abruptly resigned on 12 September, were unknown.

Since filing the lawsuit in June 2023, 10 top executives have resigned from the crypto exchange:

- Senior Director of Investigations Matthew Price
- Global Vice President of Marketing & Communications Steve Milton
- General Counsel Han Ng
- Chief Strategy Officer Patrick Hillmann
- Senior Vice President Stephen Christie
- Head of Asia and the Pacific Region Leon Fung
- Head of Product Mayur Kamat
- Vice President for Eastern Europe, Turkey, CIS, Australia and New Zealand Gleb Kostarev
- Executive Vice President Helen Hai
- US division CEO Brian Schroeder

On 15 September, the SEC accused the cryptocurrency exchange and CEO Changpeng Zhao of withholding information and obstructing the investigation. The regulator petitioned the court to conduct a forensic audit, subpoena key witnesses, and issue a court order to provide all requested documents.

A major hitch for the regulator is the link between Binance US and Ceffu. Binance US claims that it only used Ceffu as a software provider. However, prior to February 2023, Ceffu was called Binance Custody (legal name: Bifinity). In financial reports, Changpeng Zhao is listed as the sole shareholder.



The SEC claims that US funds could flow out through Ceffu and that the company plays a much larger role than just that of an "equipment provider". The regulator needs the requested documents and testimony that Binance has persistently refused to provide in order to confirm the ties between the two entities.

Due to the controversy and some restrictions imposed, there has been a significant outflow of employees and clients from Binance US. In one year's time, the exchange's turnover dropped 50-fold from $230 million to $5 million.



The problems also affected the international division, which saw the largest decline in market share among major players.



Binance's own coin, BNB, also went underwater this year and is trading at a 12% discount.



For its defence strategy, Binance decided to drag the trial out and failed to provide the requested documents, calling the SEC's requirements "unduly burdensome".


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Crypto market participants' sentiment

Institutional investors using ETFs increasingly resemble short-term holders in terms of their behaviour. After news emerged of mass applications for Bitcoin spot ETFs to the SEC, they increased investments at a record pace for the past year, investing $200 million a week.

Not getting the desired permission within a month and being disappointed by crypto trends, institutional investors began to withdraw their capital. Over the past nine weeks, the outflow totalled $455 million.



Short-term Bitcoin holders are showing similar behaviour. After skipping the accumulation phase in early 2023, they have bought up BTC between $27,000 and $30,000.



However, the loss of momentum and the subsequent correction disappointed this group, too, resulting in their total reserves declining to 12-year lows. On the contrary, long-term holders have set a new record by accumulating 14.7 million BTC.



Despite some groups' mood swings, the market remains neutral. Realised weekly profits and losses account for only 0.02% of market capitalisation. During major shocks, that figure reached 3%.



In 2023, new investors were just starting to show interest in Bitcoin, but the indicator of fresh capital inflow still didn't surpass the median price.



The flow of investments into cryptocurrency is limited by the Fed's high rates, which are enticing large capital to stick to the stable yield on Treasury bonds, as well as the tightening of crypto regulations with the prosecution of individual players. However, that doesn't lessen the growing interest in cryptocurrencies around the world, and the approval of Bitcoin spot ETFs in the US has the potential to be a leading factor in a new rally.


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Why Maker (MKR) grew by 160% in 2023

MKR is a management token on the decentralised Maker platform. Its holders can either make suggestions on changes to the ecosystem or vote for innovations by sending coins. The main product of DAO Maker is the DAI stablecoin, launched in 2017 and pegged to the US dollar.

To mint DAI, users must make an excess deposit in cryptocurrency, the size of which varies between 110% and 200%. To get 100 coins, one must deposit Ethereum worth $150. In other words, 150% of the issued volume is reserved in a smart contract. If ETH's price declines and approaches 100%, the collateral will be sold for the liquidators' DAI at auction. After all settlements with participants are done, DAI are burned.

This system has its drawbacks, but it has survived several crypto crises, including the one that hit UST (Terra). In terms of stability, the coin is performing better than the USDC issued by the US emitter. For the past two years, DAI traded at a 10-cent discount for 20 minutes, with USDC taking 23 minutes.



DAI ranks first by market capitalisation among decentralised stablecoins with a $5.5 billion market cap. A significant spike in the indicator happened in August when users voted for an increase of the staking floating rate to 8% APY. Since then, the capitalisation has skyrocketed to $1 billion.



The rate hike was possible due to the system's yield increase, including investments in US Treasury bonds. For the past six months, community revenue increased 4.4 times to $185 million, and the expected annual profits jumped from $15.5 million to $57.9 million.



The increase in DAI coins also has a beneficial effect on MKR, as additional interest paid by borrowers goes toward purchasing MKR that is subsequently burnt.



However, potential investors should be careful. If a large borrower is liquidated, the value of the collateral drops below 100%, and there is a shortage of DAI in MakerDAO's reserves, the deficit will be covered by an additional issuance of MKR.


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Ethereum developers raise the alarm about too many validators

After the switch to PoS, the network began to rely on validators instead of miners, and users were happy with the opportunities to make passive income. Ethereum staking became so attractive that even pressure on the staking programme in the US and its rejection by some crypto exchanges didn't affect the increase in the number of validators. There are now over 800,000 validators, and the number is expected to reach 1 million in November and 2 million by mid-2024.



On the one hand, a large number of validators provide a high degree of decentralisation and network security. It also supports ETH's value since the reduction in the coin's circulating supply increases deflationary pressure.



On the other hand, the load on the network is increasing since participants have to exchange messages to validate blocks. Sometimes, this causes full-scale failures and delays in completing transactions, just like what was seen in May 2023 (read more on the issue in the developers' forum).



ETH's developers are looking for ways to reduce the inflow of validators. The first method, which has already been included in the new update, is to limit validator activations to 8 per epoch. The current number is 12 and could be expanded dynamically. The update is due to arrive in late 2023 or early 2024.



The limitation on the inflow of validators will give developers additional time to come up with a solution. One promising option is to cut the profitability of staking by limiting the number of coins staked as opposed to the number of validators (as is the current situation).



In other words, the more ETH is staked, the lower the profitability is. There are currently 27 million ETH, or 23% of the total supply, staked on the network, and the yield is 3.8% APY.



Another thing being considered is the introduction of a floating minimum balance with the exclusion of small players during periods of high network loads, the introduction of fines when exceeding the maximum number of validators, and the differentiation of remuneration depending on the amount each validator stakes.

Some methods are difficult to implement, while others lead to increased centralisation. This is exactly why developers need a delay to make an informed decision.


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Changes in the stablecoin market

Stablecoin market capitalisation has decreased for the 18th month in a row, declining to $124 billion. This is the lowest it's been since September 2021. The share in the total volume of coins also continues to decline, reaching 11.6% of the crypto market's total capitalisation. It reached the highest point of 16.6% in December 2022.



Trading volumes that involve stablecoins may also continue their downward trend. They amounted to $462 billion in August and as low as $174 billion in the first 18 days of September. Last year, the trading volume exceeded $1 billion.



Among the old-school stablecoins, only USDT strengthened its position over the past 12 months, reaching a market capitalisation of $83 billion. USDC lost about half of its value, dropping to a capitalisation of $25 billion after the March crisis in US banks that held the coin as collateral. BUSD is also living out its last days. In February, the stablecoin will no longer be supported by Paxos and Binance.



Binance is garnering interest in newer coins. Since March, the crypto exchange has promoted zero-commission transactions on TUSD, bursting trading volumes several times over. However, the stablecoin's lost peg to the US dollar in June has disappointed users.



Binance now offers zero commissions on trading FDUSD. The coin of the Hong Kong-based First Digital Group was released three months ago. Compared to August, its capitalisation increased by 22% to $394 million.



Capitalisation and trade volume drop, on the one hand, due to a significant rise in cryptocurrencies' value. Since stablecoins serve as a link between fiat money and digital assets, interest in them leads to Bitcoin's price growth. However, over the past six months, it's been stuck within the $25,000-$30,000 range.



On the other hand, the trust in stablecoins was undermined by the collapse of some projects, unpegging USDC and growing pressure from the US and European regulators. This has reduced interest in stablecoins as a store of value.


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