Tether USDt's market capitalization has seen a multibillion-dollar decline, falling 2.8% since hitting $141 billion on December 19, 2024. Daily trading volumes also dropped significantly, decreasing from about $154 billion in mid-December to $55 billion by January 6, 2025. Matrixport, a crypto financial services platform, suggests that this downturn is typical of a holiday trading slowdown rather than a bearish market signal. They anticipate that as the new year progresses, trading volumes may return to bullish levels. Matrixport notes that while a decline in volume often precedes consolidation phases in the crypto market, it may be premature to adopt a bearish outlook. Additionally, comments surrounding Tether’s market drop were influenced by concerns over new European Union regulations, although these claims have been criticized as fear, uncertainty, and doubt (FUD) by many in the crypto community. Notably, despite ongoing discussions about Tether's status, major exchanges like Binance continue to support USDT pending further regulatory clarity.

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