USDT was commonly seen as the troubled child amongst all the stablecoins, but things rapidly changed as TerraUSD [UST] came into the picture only to crash and burn. At press time, the ex-stablecoin was trading at $0.1258 and had a market cap ranking of 44. By comparison, Tether looked much better off – but is its stability an illusion as well?

CryptoWhale has an opinion

The crypto analyst known for contrary opinions tweeted that Tether’s “implosion” was drawing near. This might not be a particularly surprising comment from said analyst, who has previously slammed Tether’s ethics. But what was worrying was a chart showing Tether’s falling market cap.

Indeed, at press time, USDT’s market cap had fallen drastically to revisit levels last seen around December 2021. This is a concerning sign for investors, even if USDT’s market cap ranking did not move. However, it’s worth noting that at press time, Tether was trading at $0.999.

Source: Santiment

If that wasn’t reason enough to be vigilant, Tether supply on exchanges rose by more than two billion in recent days, with an especially drastic rise in stablecoins returning to the exchanges noted from early May.

However, another interpretation is that investors are bringing their USDT to the exchanges in order to buy the dip and walk away with shiny new alts.

Source: Santiment

Tether claimed that all was business as usual and a 16 May report by Glassnode noted,

“If we look to the supply of USDT, we can see that indeed, over $7.485 Billion worth of USDT has been redeemed with week. The total USDT supply declined from near the $81.237B ATH to $75.75B.”

Tether at the end of its rope?

Tether might be on a short leash, but one stablecoin which is rapidly winning is none other than USD Coin [USDC], which rose to become the fourth biggest crypto by market cap. Santiment data attested to this steady rise in market cap since 12 May – even as Tether’s market cap was plunging.

Source: Santiment

Meanwhile, Glassnode’s report suggested that crypto investors might be rethinking their go-to stablecoin. It observed,

“Given the dominant growth of USDC over the last 2yrs, this may be an indicator of changing market preference away from USDT and towards USDC as the preferred stablecoin.”


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