Tether’s USDT Supply Growth Hits Sharp Decline Amid Waning Demand

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The growth of the world’s largest stablecoin, Tether (USDT), has seen a notable decline recently.
Data from early 2023 indicated a significant increase in Tether’s supply, which was a major driving force for the market’s upward movement.
However, recent figures show a significant slowdown in Tether’s issuance, indicating a potential shift in market dynamics.

Discover the latest trends and shifts in the Tether supply and what it means for the crypto market.

Sharp Decline in Tether’s Supply Growth Observed

Tether’s supply surged dramatically towards the end of 2023 and the beginning of 2024, stimulating market rallies. During this period, Tether frequently made headlines with billions of dollars worth of USDT issuance. However, recent data reveal that Tether’s supply growth has markedly decelerated. As of June 24th, Tether’s monthly supply growth was less than 1.5%, compared to around 5% in April and May.

Decreased Demand for USDT Reflects Market Sentiment

The rapid issuance of USDT was particularly pronounced during the meme coin craze between March and May, which injected fresh enthusiasm into the market. Yet, in the past month, reduced investor interest has become apparent, with many meme coins losing around 40% of their value, thus diminishing the need for new liquidity.

Fadi Aboualfa, Head of Research at Copper, commented on the situation, noting that as the market continues to decline, demand for USDT liquidity is expected to further decrease:

This trend suggests that as Bitcoin and Ethereum face downward pressure, less liquidity flows into the crypto markets, leaving altcoins with slim chances of a significant rally in the short term.

Conclusion

The notable deceleration in Tether’s supply growth marks a significant shift in the crypto market’s dynamics. With reduced investor interest and a corresponding decline in meme coin values, the demand for USDT liquidity has sharply diminished. Stakeholders should closely monitor these trends as they could have substantial implications for future market movements.