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- Tether’s USDT supply falls sharply as major holders redeem billions, hitting a three-year low.
- Stablecoin market expands despite USDT’s decline, with USD1 posting a strong 50% monthly surge.
- Whale selling intensifies as new wallets accumulate USDT, revealing a split investor trend.
Tether’s USDT is on the path to its greatest monthly decrease in circulating supply in the past three years. This is due to a recent spate of redemptions from major holders. The data from the blockchain reveals a sharp decrease in USDT’s circulating supply. This is a major change in the stablecoin market.
USDT’s circulating supply is reducing at a rate of $1.5 billion in February. This is after a $1.2 billion decrease in January, according to data from Artemis Analytics, as per Bloomberg’s reporting. This is the greatest decrease in USDT’s circulating supply in the past three years.
USDT Records Sharpest Fall Since FTX Collapse
The last time USDT’s circulating supply declined at such a rate was in December 2022, when it declined by $2 billion. This is after FTX and its subsidiaries declared bankruptcy. Such a drop is a major event in the crypto market, leading to a severe outflow from it.
This is a major decrease in USDT’s supply and could indicate a decrease in crypto market liquidity. USDT is the main entry point in the crypto market for traders. Tether’s market capitalization is $183 billion and represents 71% of the total stablecoins in circulation, according to data from CoinMarketCap.
However, the stablecoin market has continued to rise. The capitalization of the stablecoin market has risen by 2.33%, increasing to $307 billion from $300 billion in the past month, according to DeFiLlama data.
Also Read: Stablecoin Market Stalls as Weak Dollar and Low Trading Hit Demand
Whales Exit USDT While USD1 Surges in Market Share
USDT and Circle’s stablecoin, USDC, have lost 1.7% and 0.9%, respectively, in the past month. However, World Liberty Financial’s USD1, which is backed by the Trump family, has risen significantly. According to DeFiLlama, the capitalization of USD1 has risen by 50% in the past month, increasing to $5.1 billion as of Friday.
Big investors have been selling USDT. The whale wallets sold $69.9 million in USDT in the past week, according to Nansen. The selling rate of this group of wallets has risen 1.6 times.
Source: Nansen
“Smart money” wallets have turned out to be net sellers of USDT. However, new wallets that have been created in the past 15 days have been net buyers of the stablecoin. New wallets have bought approximately $591 million in USDT in the same week, as per Nansen.
The contrasting flows show a divided market. Big holders are redeeming or reallocating capital. New participants are buying into USDT at a steady pace. Stablecoin issuance across the sector remains broadly stable, despite shifting investor patterns.
Also Read: TRON Developers Build a Node.js Wallet CLI With Gas-Free Transfers
