tether’s $USDTThe world’s largest USD-pegged stablecoin is heading for its steepest monthly decline in years as large holders ramp up redemptions, according to blockchain data.
Circulating supply of USDt ($USDTSales have fallen by about $1.5 billion so far in February, following a $1.2 billion decline in January, according to data from Artemis Analytics reported by Bloomberg. This results in $USDT A few weeks after the collapse of cryptocurrency exchange FTX in November 2022, it recorded its biggest monthly decline in three years.
of $USDT Supply decreased by $2 billion in December 2022 after the bankruptcy of FTX and 150 of its subsidiaries shocked the crypto industry.
This decline may signal a reduction in liquidity in the cryptocurrency market. $USDT It is the main entry point for crypto investors. Its $183 billion market capitalization accounts for about 71% of the total stablecoin market, according to CoinMarketCap.
tether $USDTmonthly supply change rate, monthly aggregation. Source: Artemis Analytics, Bloomberg
Cointelegraph reached out to Tether for comment on the cause of February’s supply decline, but did not receive a response in time for publication.
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Stablecoin market capitalization remained flat in February
pull back $USDT It has not led to a broader contraction in dollar-linked stablecoins overall.
According to data from DeFiLlama, the market capitalization of stablecoins across all exchanges increased by 2.33% year-to-date in February, from $300 billion to $307 billion.
Total market capitalization of stablecoins. Source: Defilama
The two major stablecoins are $USDT And Circle’s $USDC ($USDC) and Trump family-owned World Liberty Financial fell 1.7% and 0.9%, respectively. $USD1 ($USD1) According to DeFiLlama, the stablecoin has recorded a 50% increase in market capitalization over the past month and was valued at $5.1 billion as of Friday.
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Unloading Whales and Smart Money Traders $USDTbut a new wallet intervenes
Whales, or large crypto investors, have been shedding funds. $USDT However, new participants are creating new demand for major stablecoins.
Whale’s Purse grossed $69.9 million $USDT According to cryptocurrency intelligence platform Nansen, sales rates increased 1.6x across 22 wallets in the past week.
$USDT Ethereum, Token God Mode, 1 year chart. Source: Nansen
Tracked as “smart money”, leading traders in terms of returns are also $USDT. At the same time, new wallets created in the past 15 days have generated approximately $591 million worth of $USDT According to the platform, within this week.
Despite overall stablecoin issuance remaining largely stable, this mixed flow highlights the market’s fragmentation between large holders redeeming and reallocating capital and new entrants seeking to enter the other side.
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