Tether USDT, the largest dollar-pegged stablecoin, saw its market value drop by more than 1% over the past week, raising concerns over the broader crypto market’s stability.
Historic Drop in USDT Market Cap
USDT’s market cap fell to $137.24 billion in mid-December after reaching a record high of $140.72 billion. This decrease mimics the consequences of the FTX exchange crash in November 2022. The decline is attributed to major European exchanges and Coinbase removing USDT from their platforms due to non-compliance with new European regulations.
EU Delistings: Concerns and Prospects
The delisting of USDT from MiCA-compliant platforms in the EU has sparked concerns of a broader downturn in the crypto market. Some analysts, however, argue that these concerns might be overstated, noting that the bulk of crypto trading volume occurs in Asia and the U.S., where USDT remains accessible.
Tether’s Response to New Regulatory Challenges
Tether is making efforts to align with new regulatory requirements by investing in MiCA-compliant firms. This proactive stance helps the stablecoin maintain its growth trajectory despite the evolving global regulations.
Despite challenges in Europe, USDT continues to be a key player in the global crypto market, especially in Asia and the U.S.
