Top Stablecoins Shed $7B In May As Traders Redeem Tokens En Masse

The top four stablecoins by market capitalization have shrunk around 4% in May, with Tether losing 11% of its supply to redemptions


Blockworks Exclusive Art by Axel Rangel


key takeaways

  • Stablecoin holders are exchanging their tokens for cash, in some cases reducing the coins’ overall supply
  • Tether and DAI have shrunk the most throughout May so far

The top four stablecoins by market capitalization have lost nearly $7 billion from their collective supplies this month, as big money traders seek to redeem their tokens for cash.

Stablecoins Tether (USDT), Circle’s USD Coin (USDC), Binance USD (BUSD), and DAI together boasted nearly $159 billion supply at the start of May.

Intense market volatility and reduced risk tolerance in light of Terra’s collapse has sent that figure below $152 billion — a drop of more than 4%.

MakerDAO’s overcollateralized stablecoin DAI has lost the most supply this month on a percentage basis. Its market value on May 1 was $8.5 billion, according to CoinGecko data. Now, it’s a little over $6.2 billion — representing a 26% fall.

USDT was the second-hardest-hit. The largest stablecoin has shrunk by $9 billion in the month-to-date, an 11% drop. Bitcoin’s price fell around 25% in that time while ether crumbled by 30%.

USDT and USDC holders can exchange their tokens for US dollars from Tether and Circle respectively at a 1:1 ratio. Low demand leads to those redeemed tokens being burned.

BUSD users, however, can’t redeem their tokens via Binance directly. White-label stablecoin issuer Paxos handles BUSD redemptions instead. DAI is more decentralized — users can only redeem tokens for collateral under certain emergency conditions.

USDC and BUSD have actually grown throughout May’s market turmoil. USDC’s market value has jumped almost 7.5% — from more than $49 billion to a tad less than $53 billion. This is despite losing more than $3 billion from its market value throughout March and April.

Crypto exchange Binance’s stablecoin offering has added 5.5% so far this month; its market value rising from around $17.7 billion to $18.6 billion at press time.

At Blockworks’ Permissionless conference in Palm Beach on Wednesday, Circle’s Joao Reginatto told the crowd the stablecoin issuer had redeemed $7 billion USDC last week, equal to 11% of Circle’s total redemptions from 2021. 

But while May has seen the top stablecoins shrink, their total market value is still up 5.5% in the year-to-date, having added almost $8 billion.

USDC has grown 20% with $10.6 billion more tokens in circulation. BUSD boosted up 22% — representing growth of $4.2 billion. USDT has shed about $4.1 billion, a 5% reduction, while DAI dwindled by 30% — from $8.9 billion to $6.2 billion.

Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.

Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.

Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.


upcoming event

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. This year’s event will be held in our nation’s capital, where industry leaders, policymakers, and institutional experts will come together to discuss the latest developments and challenges in the ever-evolving world of cryptocurrency. […]

upcoming event

MON - WED, SEPT. 11 - 13, 2023

2022 was a meme.Skeptics danced, believers believed.Eventually, newcomers turned away, drained of liquidity and hope.Now, the tide is shifting and it’s time to rebuild. Permissionless II is the brainchild of Blockworks and Bankless. It’s not just a conference, but a call […]

recent research

Solana Q2 Update


While most alternative Layer 1 networks, have seen lackluster usage since the market downturn, Solana has continued to show significant potential throughout 2023.



The company is looking to raise $25 million by this weekend, sources said


The exchange’s NFT platform has been in the works for years


It could take some time for a return to a crypto bull market, Galaxy CEO Mike Novogratz says


The no-loss lottery protocol faced a lawsuit from a former staffer of Sen. Elizabeth Warren, but a judge found he lacked standing


In his first public remarks directly on recent SEC enforcement actions, Gensler was having no tolerance for any company who refuses to register


The bill could be slipped into the US Farm Bill up to be renewed in September 2023, Sen. Tommy Tuberville said