Bitcoin ($BTC) trading with Binance’s stablecoin $BUSD is up nearly 400% year-to-date: report

Bitcoin ($BTC) trading on Binance’s stablecoin BinanceUSD ($BUSD) is up 394% year-to-date after trading volume rose 0.44% to 2.14 million bitcoin in the month of August as the stablecoin from the leading cryptocurrency exchange its importance recognizes rise.

According to CryptoCompare’s August 2022 stock market report, year-to-date BTC/BUSD trading volume is up a whopping 304% to a new all-time high, while USDC and TUSD trading volume is down 11.4% and 63%, respectively.

Bitcoin trading on Tether’s USDT stablecoin surged 15.4% to 10.1 million BTC in August as “trading volatility returned to markets.” According to the company, this is the highest volume recorded for BTC/USDT since June 2020, with USDT’s market share of BTC trading fiat or stablecoin rising to 66.4%.

The surge in BUSD trading volume is relevant as Binance announced earlier this month that it will start adding existing user balances and new deposits from USD Coin (USDC), Pax Dollar (USDP) and True USD (TUSD) to its own stablecoin Convert Binance USD (BUSD).

The transition is set to begin on September 29 and essentially means that Binance will stop supporting several major stablecoins, including the second-largest USDC. It is issued by Circle Financial and has a market cap of nearly $51.8 billion, which trails only Tether’s $67.5 billion market cap when it comes to stablecoins.

According to Binance, the move is intended to “improve liquidity and capital efficiency for users.” The exchange will also remove and stop trading spot pairs with USDC, USDP and TUSD.

Analysts at JPMorgan have said the move will benefit Binance Tether as it will increase the cryptocurrency’s prominence in crypto trading. The investment bank noted that Tether’s market share in the stablecoin ecosystem has declined over the past 18 months, showing that its importance has waned. The company added:

In our opinion, the importance of Tether is not only limited to its share of the market capitalization in the stablecoin universe, but also depends on its use, especially in trading.

CryptoCompare’s report also notes that over the past month, derivatives trading volume across all centralized exchanges has increased by 1.91% to $3.16 trillion, marking the first increase in three months. Spot volume rose 36.8% to $1.91 trillion, posting the second-biggest month by volume of the year.

According to the report, the derivatives market has historically dominated crypto trading volume. Loss of market share “reflects uncertain macroeconomic conditions with rising inflation rates and looming recession”

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