Over the past five months, the First Digital USD (FDUSD) stablecoin has surpassed the Circle-issued USD Coin (USDC) as the second most preferred Bitcoin trading pair, largely due to Binance’s zero-trading fee initiative.
The latest stablecoin analysis from CCData highlights a marked increase in FDUSD’s trading volume on centralized exchanges, especially Binance, pushing its market value to new heights.
FDUSD’s trading activity soared by 51.1% to $122 billion in January, ranking it just behind Tether’s USDT as the most favored trading pair.
The total trading volume for stablecoins on centralized exchanges increased by 4.54% to $1.05 trillion in January, reaching its highest point since December 2021.
Rise of FDUSD
The report indicates that the BTC/FDUSD trading pair on Binance accounted for the majority of the volume, becoming the most traded Bitcoin pair on the exchange following the green light for spot Bitcoin ETFs in the US.
In January, this pair achieved a monthly trading volume of $80.8 billion, surpassing the BTC/USDT pair on Binance, which recorded about $60 billion in the same timeframe.
The market capitalization of FDUSD saw a rise of roughly 13% to a record-breaking $2.44 billion, increasing its share of the stablecoin market to 15.6%.
FDUSD has risen to prominence as a leading stablecoin in recent times, significantly aided by Binance’s active promotion of the asset.
After facing regulatory challenges with Binance USD (BUSD), the cryptocurrency exchange encouraged its users to switch to FDUSD and launched multiple new offerings to promote the use of this stablecoin on its platform.
USDT remains king
Despite FDUSD’s recent rise, Tether’s USDT continues to lead the stablecoin market by a significant margin, holding approximately three-quarters of the market share among the top 10 stablecoins.
USDT still ranks as the most traded pair on centralized exchanges, with its total monthly trading volume reaching $241 billion.
In February, USDT’s market capitalization increased by 1.23%, reaching a new high of $97.3 billion, indicating the peak circulation of the stablecoin. As of February 20, USDT’s market dominance stood at 70.6%.
Analysts at JPMorgan have recently issued warnings about USDT’s prevailing dominance in the crypto sector, suggesting it could be harmful to the industry. However, Tether CEO Paolo Ardoino strongly disputed these claims.
Update as of February 23, 11:09 UTC: The headline has been updated to clarify that FDUSD is produced by First Digital Labs.