Tether’s USDT, the largest stablecoin by market cap, has seen a notable drop in its valuation and trading volumes over the past few weeks. However, experts suggest this decline is linked to the seasonal holiday slowdown rather than a sign of a bearish shift in the crypto market.
Recent Developments
- Market Cap Decline: USDT’s market cap fell 2.8%, from a peak of $141 billion on Dec. 19, 2024, to approximately $137 billion.
- Trading Volume Plunge: Daily trading volumes dropped 64%, from $154 billion in mid-December to $55 billion as of Jan. 6, 2025.
Despite these numbers, financial services platform Matrixport highlights that this trend is typical during the holiday season and shouldn’t be interpreted as a negative market shift. Historically, such slowdowns often precede a period of consolidation, setting the stage for bullish momentum.
Expert Insights
Matrixport emphasizes that rising stablecoin trading volumes are a bullish indicator, signaling increased fiat inflow into the crypto ecosystem. The recent drop, therefore, aligns with a natural market cooldown rather than a long-term downtrend. Analysts also expect trading activity to pick up as the holiday lull subsides.
FUD Around MiCA and Tether
Amid the seasonal dip, rumors circulated about Tether’s delisting on European exchanges due to the EU’s Markets in Crypto-Assets Regulation (MiCA). However, local regulators have not issued such directives, and major exchanges, including Binance, continue to support USDT. Many community members have dismissed these rumors as unfounded fear, uncertainty, and doubt (FUD).
Looking Ahead
As the market recovers from the holiday slowdown, analysts predict that stablecoin activity will rebound, potentially fueling a broader crypto market recovery. While USDT’s recent numbers might appear concerning at first glance, the data suggests this is a temporary phase rather than a long-term shift.
The crypto world will be watching closely as 2025 kicks off, with expectations for renewed activity and growth in the coming weeks.
