The market capitalization of GUSD has significantly decreased over the past 7 months.
The demand for Gemini dollar (GUSD), a stablecoin by the Gemini cryptocurrency exchange, has significantly decreased in the past 7 months, while the market value of other stablecoins continues to soar.
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Gemini exchange has seen a significant decrease in demand for its Gemini dollar (GUSD) stablecoin over the past 7 months, while the market value of other stablecoins continues to soar.
Gemini Dollar Falling Behind
Since December 20, 2018, the market value of Gemini dollar stablecoin has been on a downward trend. It has dropped from its all-time high of $103.106 million to $7.981 million, a decrease of 92.25% in just seven months.
A report indicates that other stablecoins have outperformed Gemini significantly. For example, the market value of Paxos Standard Token PAX is around $168 million. Circle's USDC has a supply of approximately $405 million, and the leading Tether USDT has a market value of $4.25 billion.
Intense Market Competition
From a market perspective, Gemini exchange has lower trading volume on its platform. According to CoinGecko data, the exchange ranks 22nd in the past 24 hours with a daily trading volume of only $28.52 million.
The lack of sufficient competitive advantage may be one of the reasons for the decline in demand for Gemini dollar. It could also be due to the pressure from the New York State Department of Financial Services (NYSDFS) regulation.
Despite the controversial reserve issues, USDT has significant trading volume outside the U.S., especially on the Binance exchange. Additionally, USDC has higher liquidity on exchanges like Coinbase and Circle.
Apart from Gemini dollar, the market share of other stablecoins continues to grow steadily, with USDT still maintaining a dominant position.
Offering Securities Trading as a Turning Point
It is widely believed in the community that this year's market value decline is due to Gemini's aggressive discount battle when launching GUSD, offering discounts to large traders to reduce USDT's dominance. However, liquidity does not seem to have increased, instead being hoarded as a means to profit from arbitrage trading with USDT and other stablecoins on a 1:1 basis.
It is reported that founders Cameron and Tyler Winklevoss have applied for a license with the Financial Industry Regulatory Authority (FINRA). Once approved, Gemini will be able to officially offer securities trading, which may lead to an improvement in demand for GUSD.
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