Tether’s USDT stablecoin witnessed its largest monthly supply contraction in years during February, shedding $1.5 billion as major holders redeemed tokens. This decline was partially offset by purchases from new investors, while the broader stablecoin market showed resilience with a slight increase in total capitalization.
Tether’s USDT recorded a $1.5 billion decline in circulating supply in February, marking its largest monthly retreat in years, according to data from Artemis Analytics. Whale addresses are redeeming the tokens, following a $1.2 billion decline in January that approaches levels seen after the collapse of FTX.
While USDT’s market share fell, the overall stablecoin market held steady. The total capitalization of all dollar-linked stablecoins increased slightly to $307 billion, as indicated by DeFiLlama.
Recent blockchain data reveals divergent investor behavior. Over one week, 22 whale wallets sold $69.9 million USDT, while wallets less than 15 days old purchased approximately $591 million, according to Nansen data. This indicates market forces are changing, with new entrants supporting USDT’s position.
The reduced supply of Tether’s USDT may affect liquidity in the crypto space and impact trading volumes for Bitcoin and other cryptocurrencies. Investors should account for on-chain data and regulatory factors when analyzing stablecoin trends.
