Tether's USDT stablecoin has reached an important milestone, surpassing 534 million users, even as the broader crypto market remains under pressure due to a severe contraction that began in October 2025.
According to the company's Q4 2025 USD₮ Market Report, the stablecoin added over 35 million users in the quarter, marking the eighth consecutive quarter with more than 30 million new users.
USDT expands as a global store of value even as the crypto market capitalization contracts
This growth comes during a period characterized by reduced risk appetite. Since the collapse recorded on October 10, the total market capitalization of crypto has fallen by over a third (30%). Meanwhile, the supply of USDT has continued to increase, albeit moderately.
Tether reported that its market capitalization rose to $187.3 billion, an increase of $12.4 billion in Q4, even as some competing stablecoins recorded a contraction.
Tether attributes this resilience to the demand for savings, payments, and cross-border transfers, rather than solely speculative trading.
The on-chain data cited in the report shows that the wallet balances among long-term holders are increasing, along with record transaction volumes.
However, estimates of total users include both on-chain wallets and estimates of exchange users, making independent verification difficult.
Communications regarding reserves also highlight further expansion. Total reserves have reached $192.9 billion, of which $141.6 billion is in U.S. Treasury securities, a figure that would position Tether among the top holders of Treasuries in the world, if it were a country.
The company has also increased its reserves in Bitcoin to 96,184 BTC and its gold reserves to 127.5 metric tons, reflecting a strategy of diversifying collateral beyond cash-equivalent assets.
On-chain activity has continued to grow rapidly. The number of USDT holders has risen to 139.1 million, while monthly active users have reached 24.8 million, both new historical records.
The value transferred on-chain in Q4 reached $4.4 trillion, and the share of USDT in spot trading volumes on CEX rose to 61.5%. This underscores its role as the primary settlement asset in crypto markets.
The increase in minting, the fluctuations of the peg, and discussions about the flippening highlight the increasingly systemic role of USDT.
Recent issuance activity suggests that demand has remained steady even at the beginning of 2026. On February 4, the on-chain analytics account Lookonchain reported that Tether minted $1 billion in USDT, part of the over $3 billion in stablecoins issued by Tether and Circle in three days.
Large issuances are often interpreted by traders as a signal of incoming liquidity, although newly minted tokens are not always immediately put on the market.
At the same time, Tether's growing dominance has intensified scrutiny. Market attention has slightly turned to the stability of USDT after the token fell to around $0.9980, its lowest level in over 5 years.
Although the deviation has been mild and short-lived, a prolonged loss of confidence in the peg could potentially impact excessively, given the central role of the stablecoin in the trading infrastructure.
Market estimates often suggest that most crypto trading volumes pass through USDT pairs, making it a fundamental backbone of liquidity.
The scope of Tether's expansion has also sparked debate about its role in the crypto hierarchy. Some market observers have speculated that, if current trends continue, USDT could potentially challenge Ethereum's position as the second most capitalized cryptocurrency, especially during prolonged periods of risk aversion when capital shifts towards stable assets.
Meanwhile, the latest data shows that USDT continues to expand in terms of users, reserves, and traded volume, even as the crypto market as a whole contracts.
However, this same growth is concentrating liquidity and systemic importance in a single instrument. The stability of Tether's peg is increasingly tied not just to a single company, but to the resilience of the entire crypto market.
