Tether's USDt stablecoin has faced a noticeable decline in market cap and trading volume. Analysts and the public are considering the causes of these changes and their potential implications.
Current USDt Market Situation
According to CoinGecko data, USDt's market cap has decreased by 2.8% from a peak of $141 billion on December 19, 2024. Trading volumes have also dropped significantly, down 64% from $154 billion in mid-December to $55 billion by January 6, 2025.
Matrixport's Standpoint
Matrixport, a crypto financial services platform, notes that this decline does not indicate a bearish trend. In a January 6 post, they attributed this to a holiday season slowdown in trading activity rather than a fundamental shift in market sentiment. The company remains optimistic, predicting that bullish momentum will resume shortly. Increasing stablecoin trading volumes often signal bullish trends, reflecting greater fiat inflows into the crypto ecosystem.
Analytical Forecasts and Public View
Other analysts echo Matrixport's perspective. Axel Adler from CryptoQuant commented on January 4 that Bitcoin needs increased trading volume to trigger a strong bullish impulse, which is likely to return after the holiday season. Meanwhile, community discussions around Tether have raised concerns about reports linking its market cap decline to the European Union's Markets in Crypto-Assets Regulation (MiCA). Though some reports suggested Tether would be delisted from European exchanges by December 30, 2024, local regulators have issued no official guidance to that effect. The European Securities and Markets Authority (ESMA) has also refrained from commenting on USDt's compliance under MiCA.
It is difficult to draw definitive conclusions given the seasonal nature of changes. It will soon become clear whether the market will return to bullish trends or if the changes are of a more fundamental nature.
