Tether’s USDT stablecoin has experienced a 2.8% decline in market capitalization, dropping from a peak of $141 billion on December 19, 2024, to approximately $137 billion by early January 2025. Additionally, daily trading volumes have decreased by 64%, from around $154 billion in mid-December to $55 billion on January 6, 2025.
Matrixport, a crypto financial services platform, attributes this downturn to a typical slowdown in trading activity during the holiday season, suggesting that it may not indicate a bearish market trend. They note that increased stablecoin trading volumes usually signal bullish momentum, reflecting more fiat money entering the crypto ecosystem. Conversely, declining volumes often suggest a consolidation phase for Bitcoin and the broader crypto market.
The firm advises against premature bearish interpretations, proposing that the observed trends could simply be a seasonal lull. With the new year underway, they anticipate that it won’t be long before the market’s bullish momentum potentially resumes.
This perspective comes amid community discussions linking USDT’s market cap decline to the European Union’s Markets in Crypto-Assets Regulation (MiCA). Some reports suggested that European crypto exchanges might delist USDT due to MiCA compliance issues. However, local regulators have not provided such guidance, and trading of USDT has continued across Europe, with major exchanges like Binance maintaining support for the stablecoin.
