Why did Tether USDT's market value and trading volume fall?

Crypto financial services platform Matrixport said that Tether USDT's market value and trading volume have fallen by billions of dollars recently, but this is not enough to indicate bearish signs in the market.

The market capitalization of Tether’s USDT stablecoin has fallen 2.8% since peaking at $141 billion on Dec. 19, 2024, according to CoinGecko.

USDT trading has also fallen sharply in the past few weeks, with daily trading volume plummeting 64% from approximately $154 billion in mid-December to $55 billion on January 6, 2025.

However, Matrixport said in a Jan. 6 post by X that USDT’s downward trend could be the result of slower holiday trading and should not be associated with a bearish turn in the cryptocurrency market.

Matrixport predicts bullish momentum will resume soon

In the article, Matrixport mentioned that an increase in stablecoin trading volume is typically a bullish indicator for the cryptocurrency market, reflecting more fiat currency flowing into the ecosystem.

“However, when these trends reverse, it often signals a consolidation phase for Bitcoin and the broader cryptocurrency market,” Matrixport reported.

Source: Matrixport

“While Tether’s market cap has declined recently and trading volume has tapered off, it may be too early to be bearish,” Matrixport wrote.

“These trends may simply reflect a seasonal lull during the Christmas holiday. We will soon see whether the market’s bullish momentum will resume as the New Year approaches.”

Matrixport isn’t the only company to highlight the current holiday liquidity shortage.

On January 4, CryptoQuant analyst Axel Adler said that Bitcoin needs to accumulate more trading volume to generate strong bullish momentum, which may appear after the market recovers from the holidays.

Community slams FUD surrounding Tether and MiCA

Matrixport’s comments on Tether come as the community reacts to earlier reports linking USDT’s market decline to the full implementation of the European Union’s Markets in Crypto Assets regulation (MiCA).

While some online reports suggest that European cryptocurrency exchanges should delist Tether’s USDT by December 30, 2024, local regulators have yet to give such guidance.

The European Securities and Markets Authority (ESMA), the lead oversight body for MiCA compliance, has repeatedly refused to comment on the status of USDT under MiCA, even after the Dec. 30 deadline.

USDT trading also continued across Europe after Coinbase delisted USDT, with exchanges such as Binance stating at the end of 2024 that they would continue to support USDT on the platform until further notice.

Source: Nostradamus

Many community members on X slammed reports of USDT being delisted from major EU exchanges, calling such reports fear, uncertainty, and doubt (FUD).

“All this ‘news’ about Tether USDT being delisted from major global crypto exchanges due to the EU MiCA law is just FUD,” one industry observer wrote on X on Jan. 6.