Over the past few weeks, the market value of True USD (TUSD) has surged and it is now ranked, according to Coin Market Cap, as the fifth largest stablecoin by market capitalization.
In the past 24 hours, the market capitalization of TUSD has increased by over 15%, currently reaching over $1.1 billion.
Net TUSD outflow rises to meet demand
Glassnode’s Netflow metric is a useful tool for analyzing the activity of a cryptocurrency like True USD. Netflow refers to the difference between the number of coins entering and leaving a particular exchange or mining pool. When the Netflow value is greater than 0, it indicates that more coins have flowed into the exchange/mining pool than have flowed out.
Using this metric, Glassnode observed that True USD activity levels have been increasing recently. This can be seen in the significant drop in activity levels on the chart prior to February, followed by a noticeable recovery during that month.
Additionally, the Netflow chart showed a significant positive increase, which has not been seen since October 2021. At the time of writing, the Netflow for True USD has exceeded 478,000 TUSD.
Santiment shows bullish behavior on TUSD volume year-to-date
Examining Santiment’s volume metric reveals that the TUSD had been showing a rather unimpressive level of activity. However, there are indications of a slight increase in engagement.
The stablecoin market is heating up
There are several types of popular stablecoins on the market, including decentralized under-collateralized algorithms (UST), decentralized asset-backed (DAI), and centralized 1:1 versions such as USDC, USDT, and BUSD .
Over the past 24 months, BUSD and USDC have seen remarkable growth, rising by around 1409% and 912% respectively. Stablecoins are most commonly available through centralized exchanges (CEX) and bridges. An overview of the big four:
BUSD leak likely fuels growth of other stablecoins
Recent blockchain research by Nansen reveals that Binance USD (BUSD) has faced a drop in demand, while TUSD has gained popularity in the market. This change in demand could be due to recent news that Coinbase intends to delist BUSD due to regulatory issues.
According to the same Nansen report, Binance appears to be trying to recoup its position by hitting around $130 million worth of TUSD last week, suggesting a growing reliance on TUSD by the exchange. The move could further contribute to increasing the market capitalization of TUSD, as investors doubt the sustainability of BUSD in the market.
However, despite the recent rise of TUSD, its market valuation is still considerably lower than that of Dai (DAI), which is currently the fourth largest stablecoin by market capitalization, worth over $5 billion. This suggests that even though TUSD is gaining traction, it still faces fierce competition from major players in the stablecoin market.