USDT Market Cap Growth Turns Negative After Two Years

Movements in USDT, the market’s largest stablecoin by capitalization, are showing rare signals after many years: market cap growth has shifted from slowing to negative. CryptoQuant’s 60-day average USDT Market Cap Change data turned negative in February, the first time since Q3 2023.

This change raises concerns that a bear market may be beginning. Changes in USDT’s market cap act as a proxy for investors’ willingness to buy: when USDT expands, new liquidity enters the crypto market; when growth turns negative, capital leaves instead of waiting on the sidelines.

Analyst Crypto Tice said buying power weakens, downside support becomes fragile and rallies are sold off more quickly, adding that “Historically, sustained upside in $BTC doesn’t happen when stablecoin supply is contracting.” CoinGecko data shows USDT’s market cap declined from over $187 billion to $184.3 billion since early January.

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