Tether registered a second consecutive monthly decline in market capitalization. In February, the market capitalization of Tether declined by 0.8% to $183.61 billion. The decline in market capitalization is a continuation of the 1% decline in January, marking the first two-month contraction since 2022’s major market disruption.
The last comparable pullback followed the collapse of Terraform Labs. The failure resulted in the failure of Terra USD. Since then, the supply of USDT has been increasing steadily amid increasing adoption rates and engagement in the crypto market across the globe.
As of today, Tether is trading at $0.9999, with a 24-hour trading volume of $124.62 billion, a market cap of $183.60 billion, and a market dominance of 8.07%. The price has increased 0.01% in the last 24 hours, reflecting a relatively stable performance amid cautious market sentiment.
Tether Shrinks as Liquidity Demand Moderates
Usually, the supply of stablecoins increases during a period of heightened trading activity. Stablecoins are a type of asset whose supply increases during a period of heightened trading activity.
The decline in the supply of USDT indicates a moderating liquidity demand. Analysts interpret the decline as a sign that investors are deploying capital more cautiously.
A crypto analyst, pointed out that stablecoins are an essential component in the crypto market. Stablecoins are a type of asset whose supply increases during a period of heightened trading activity.
The decline in the supply of USDT indicates a moderating liquidity demand. The moderation in trading activity has been analyzed to reflect a cautious investment trend in the crypto market.
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USDC Recovery Remains Limited
The Circle-issued USDC has also demonstrated relative resilience in the market. The asset’s market capitalization recovered to about $75 billion after declining to around $70 billion in January.
Despite this relative recovery, the asset is still flat year to date, indicating that there is limited inflow into dollar-pegged digital assets.
Stablecoins are usually used to maintain parity with fiat currencies like the US Dollar but can also act as a hedge against currency fluctuations in the broader crypto markets. Over time, these assets have evolved to become an integral component in facilitating trading activities in both developed and emerging markets.
The stagnancy in the top-performing stablecoins indicates that there is no movement in terms of capital rotation in the broader digital asset space. The limited demand for US-listed spot Bitcoin ETFs also indicates that the recovery in top-performing assets like Bitcoin may not be sustainable.
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