USDT Market Cap Growth Turns Negative After 2 Years: What Does it Signal For The Mid Term?
USDT's 60-day average market cap growth turned negative in February for the first time since Q3 2023, signaling weakening buying power.Summary
The market capitalization growth of USDT, the largest stablecoin, has turned negative for the first time in two years, based on CryptoQuant's 60-day average data turning negative in February, last seen in Q3 2023. This contraction suggests that capital is leaving the crypto market rather than waiting on the sidelines, weakening buying power and making rallies fragile, as noted by analyst Crypto Tice who stated sustained Bitcoin upside historically does not occur during stablecoin supply contraction. This decline is partly attributed to Tether burning significant amounts of USDT, including two of the largest consecutive burns in history (3.5 billion and 3 billion USDT), which reflects investors converting stablecoins back to fiat. Historically, these negative phases have lasted about two months, coinciding with Bitcoin moving sideways and forming local bottoms, suggesting the current situation might lead to a stagnant low-level market or a deeper decline before any recovery.
(Source：BeInCrypto)