Tether Sheds $870M in 11 Days as Stablecoin Demand Weakens
Tether’s $USDT supply is shrinking after years of rapid expansion, adding to signs that some crypto capital is moving offchain rather than simply rotating between stablecoins.
Cryptoquant data shows $USDT’s 60-day rolling supply change at roughly negative $4 billion. About $870 million of that decline occurred over the past 11 days.
$USDT remains the dominant stablecoin, with around $184 billion in circulation and an estimated 60% share of total stablecoin supply. Still, the recent contraction has raised questions about whether investors are reducing exposure to crypto altogether.
Analyst Stacy Muur said part of the move appears to be a direct exit into fiat following bitcoin’s retreat from its 2025 peak. “Some investors are redeeming stablecoins for fiat and leaving crypto entirely,” she said.
Yield Competition Is Only Part of the Story
Changing stablecoin economics may also be contributing. $USDC offers a broader rewards ecosystem through platforms such as Coinbase, while lending protocols, including Morpho and Aave provide additional yield opportunities.
However, Muur noted that $USDC supply has also fallen sharply. That weakens the argument that capital is simply switching from Tether into Circle’s stablecoin.
“I think it’s just a mix of things,” she said. “Some capital chasing yield, some rotating back into fiat, and less demand for stablecoins as speculative activity cools.”
