Over five days in mid-October, USDT’s market cap shrank by nearly $1 billion.
On-chain tracking by CryptoQuant shows that this contraction took place as BTC was trying to rebuild upward momentum. DefiLlama data shows USDT’s total supply declining steadily, from about $184 billion in September to around $183 billion on October 20.
Here’s what the data shows:
1. The amount of USDT on exchanges is falling. USDT balances across 19 major exchanges and lending platforms dropped by about $4.6 billion between early July and October 1. Over the same period, about $1.9 billion in USDC and RLUSD flowed into these platforms. The money hasn’t left the market, but it is moving away from Tether (Crystal Intelligence data, compiled by CryptoBriefing, 10-20).
2. Historically, new USDT issuance has fueled bull markets. The two rallies in 2024 and 2025 both coincided with multiple expansions of USDT’s market cap by billions of dollars. Each large issuance added systemic buying power to the market. Now this indicator is moving in the opposite direction.
3. Prices haven’t reacted yet, but volume is falling. BTC closed at around $82,959 on October 20, up about 1.5% over 24 hours (BasisDesk, 10-21). But trading volume across the market is sluggish, and investors are generally sitting on the sidelines. Stable prices alongside money flowing out is a classic “not enough fuel” setup.
Takeaway: The key metric to watch next is whether Tether’s net issuance resumes. A large net increase in issuance would signal a recovery in demand for stablecoin liquidity. If growth in USDC and RLUSD fails to make up the shortfall, the overall liquidity picture will remain tight. Until then, it’s reasonable to remain cautious about the sustainability of the rally.
#USDT #Stablecoins
Personal opinion only; this is not investment advice
On-chain tracking by CryptoQuant shows that this contraction took place as BTC was trying to rebuild upward momentum. DefiLlama data shows USDT’s total supply declining steadily, from about $184 billion in September to around $183 billion on October 20.
Here’s what the data shows:
1. The amount of USDT on exchanges is falling. USDT balances across 19 major exchanges and lending platforms dropped by about $4.6 billion between early July and October 1. Over the same period, about $1.9 billion in USDC and RLUSD flowed into these platforms. The money hasn’t left the market, but it is moving away from Tether (Crystal Intelligence data, compiled by CryptoBriefing, 10-20).
2. Historically, new USDT issuance has fueled bull markets. The two rallies in 2024 and 2025 both coincided with multiple expansions of USDT’s market cap by billions of dollars. Each large issuance added systemic buying power to the market. Now this indicator is moving in the opposite direction.
3. Prices haven’t reacted yet, but volume is falling. BTC closed at around $82,959 on October 20, up about 1.5% over 24 hours (BasisDesk, 10-21). But trading volume across the market is sluggish, and investors are generally sitting on the sidelines. Stable prices alongside money flowing out is a classic “not enough fuel” setup.
Takeaway: The key metric to watch next is whether Tether’s net issuance resumes. A large net increase in issuance would signal a recovery in demand for stablecoin liquidity. If growth in USDC and RLUSD fails to make up the shortfall, the overall liquidity picture will remain tight. Until then, it’s reasonable to remain cautious about the sustainability of the rally.
#USDT #Stablecoins
Personal opinion only; this is not investment advice