Tether USDT Market Capitalization Declines for Second Straight Month

The Tether USDT market capitalization has declined for the second straight month, reaching $183.6 billion in February, down 0.8% from January's value. This marks the first back-to-back monthly decline since 2022 and reflects slowing stablecoin expansion.

Despite the decline, analysts argue that this is not a disorderly retreat from the asset class, but rather a stall in net stablecoin growth. The availability of settlement capital, also known as 'the fuel that powers crypto markets,' is cited as a key issue affecting USDT's market value.

The contraction in USDT supply can have significant implications for the broader cryptocurrency market. A shrinking float can tighten order books, constrain leverage, and reduce depth across decentralized finance (DeFi) pools.