- TrueUSD (TUSD) market share rose to 49%, almost equaling the Tether (USDT) market share.
- It comes after Binance assigned a zero fee discount to the BTC-TUSD trading pair last month, waiving the promotion from BTC-USDT.
- Despite the narrow range, traders hesitate to use the TUSD, Tether still tops in trading volume.
TrueUSD (TUSD) stablecoin has narrowed the gap in market share on trading volume metrics, drawing closer to Tether (USDT) on the Binance exchange. The move comes after the giant cryptocurrency exchange platform implemented a zero-fee trading discount. However, despite the growth in market share, traders are still hesitant about using TUSD, data from crypto firm Kaiko shows.
TUSD shows massive growth in a brief period
TrueUSD is a dollar-pegged stablecoin issued by cryptocurrency firm ArchBlock, formerly TrustToken. According to the proof-of-reserve monitoring tool of the blockchain data provider ChainLink, the value of TUSD is fully backed by fiat assets. Noteworthy, the intellectual property rights of TUSD were acquired by Asian conglomerate Techteryx in 2020
Binance data on the two stablecoins shows that the market share for the Bitcoin/TrueUSD (BTC-TUSD) trading pair has grown to 49% relative to the Bitcoin0Tether (BTC-USDT) trading pair. The head of research at Kaiko, Clara Medalie, has commented on the narrow gap, saying,
This is a massive increase over just a few weeks.
Kaiko data shows that while the change is commendable, the growth recorded by TUSD is not enough to neutralize or countervail the lead in the BTC/USDT pair's trading volume even after Binance relinquished its zero-fee discount for Tether.
Furthermore, traders are still placing larger buy and sell orders for the BTC/USDT pair, indicating that market players are skeptical about using TUSD despite zero fees.
Why Binance adopted TrueUSD and the reason for TUSD growth
The growth displayed by the TrueUSD stablecoin is attributed to Binance after the world's largest crypto exchange by trading volume adopted TUSD as heir of its native Binance USD (BUSD) stablecoin that Paxos Trust formerly issued.
Notably, Binance resumed facilitating TUSD trades after a six-month suspension when Paxos decided to terminate its issuance of BUSD. The move to stop issuing BUSD paved the way for the zero-fee trading discount to the BTC/TUSD pair in a strategic attempt to promote the stablecoin as a possible alternative. Similarly, the exchange waived the promotion from BUSD and USDT beginning March 22.
Growing turmoil in the stablecoin market
The stablecoin market, worth around $132 billion, has undergone major turmoil as of late, originating from a regulatory clampdown and a series of banking crises across the United States. As a result, the New York Department of Financial Services (NYFDS), the highest-ranking financial regulator in the US, strong-armed Paxos into ceasing and desisting from minting BUSD beginning February 2023. Notably, BUSD is the third largest stablecoin, boasting a market cap of around $16 billion.
In March, the closure of pro-crypto institution Silicon Valley Bank (SVB) sent turbulence across the market, given that SVB was the reserve partner of USD Coin (USDC), the second largest stablecoin. As a result, the stablecoin suffered over $10 billion in withdrawals.
USDT and TUSD emerged winners amid crises in the banking sector
Amid the banking crises, Tether and TrueUSD have emerged as the distinct winners, with TUSD securing a place as the fifth largest stablecoin in the crypto market with a market cap of around $2 billion. In the same way, the circulating supply of USDT is up by $10 billion over the past few months as its draws near to peak.
The dominance of stablecoins during challenging times in the traditional finance sector indicates that this digital asset category is a crucial part of the crypto ecosystem. At their core, stablecoins facilitate trading on exchanges while at the same time providing a link between digital assets and government-issued fiat currency.
Also Read: Binance market share could drop after abolishing most zero-fee trading, boosts TrueUSD stablecoin
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.