Tether USDt has experienced a notable decrease in market capitalization and trading volumes, but experts suggest it may not signal a bearish market shift. Since mid-December, Tether’s market cap has fallen by 2.8%, dropping from a peak of $141 billion, while trading volumes have plummeted 64% from $154 billion to $55 billion. Matrixport attributes this decline to a seasonal slowdown due to the holiday period, predicting that market momentum may soon rebound. The increase in stablecoin trading volumes is typically seen as a positive sign, indicating more fiat is entering the crypto space. However, as trends reverse, it could point to a consolidation phase for Bitcoin and other cryptocurrencies.
In addition, reports linking Tether’s market cap drop to the implementation of the European Union’s Markets in Crypto-Assets Regulation (MiCA) have faced criticism. Some claimed European exchanges should have delisted Tether by late December, but regulators have not issued specific guidance, and Tether remains tradable across the region. Statements suggesting major delistings were refuted as fear, uncertainty, and doubt (FUD) by community members. Despite concerns, market participants like Matrixport remain optimistic about the near-term prospects, stating the current trends reflect a temporary lull rather than a long-term downturn.
