Since the beginning of February, the volume of tokens in circulation has decreased by $1.5 billion, which contrasts with the growth of the sector as a whole
The market capitalization of Tether's USDT, the world's largest stablecoin, has seen its most significant monthly decline since December 2022. This comes amid no noticeable negative dynamics for most other stablecoins and growth in market capitalization for its main competitor, Circle's USDC.
Bloomberg described the situation as “poised for its biggest monthly drop since the FTX collapse,” citing stablecoin data from Artemis Analytics. By February 18, the total market capitalization of stablecoins had grown to $304.6 billion since the beginning of the month, compared to $302.9 billion at the end of the previous month.
If the capitalization of USDT decreases, it means that there are fewer tokens in circulation. This usually happens when large holders exchange stablecoins for dollars, and the issuer redeems the tokens received, i.e., “burns” them.
Similarly, when the capitalization increases, Tether issues new USDT when customers deposit dollars into the company's account, after which it issues the corresponding number of tokens and puts them into circulation. Thus, a change in capitalization reflects the inflow or outflow of liquidity from the crypto market.
Redemption (burning), like the issuance of USDT, occurs at a 1:1 ratio. For example, to redeem, the holder transfers tokens to the issuer and receives dollars, after which the corresponding amount of USDT is burned.
The sale of USDT on an exchange to other market participants is not a redemption, as the tokens continue to exist and simply transfer to a new owner.
Against this backdrop, the supply of USDC, the second-largest stablecoin by market capitalization, increased to $75.7 billion, which is almost 5% more than at the beginning of February. At the same time, USDT lost $1.5 billion in market capitalization, which fell to $183 billion. The third-largest stablecoin, USDS from the Sky project, rose above $6.8 billion in capitalization, with an increase of approximately 10%.
Experts attribute the dynamics of USDT to the general sell-off in the cryptocurrency market, which began in October and has accelerated in recent weeks. Artemis analysts note that USDT is more often used for storing value and everyday payments, while USDC is the preferred instrument on decentralized finance (DeFi) platforms, where high transaction activity can sustain demand for the token even in a downturn.
In 2022, when the previous record decline occurred, FTX collapsed, as Bloomberg recalls. At that time, the crypto industry experienced two powerful crises. First, the collapse of one of the largest crypto projects, Terra, and its dollar-pegged stablecoin, UST, followed by the bankruptcy of one of the largest exchanges at the time, FTX. Many investment companies and crypto projects were unable to survive the consequences.
At the beginning of 2022, USDT's capitalization peaked at nearly $83 billion, and by the end of that year, the figure had fallen below $66 billion. Since then, USDT's capitalization has grown almost without correction to a peak above $187 billion in late 2025 and early 2026. And although USDT's February performance is actually inferior to its competitors, the $1.5 billion decline in capitalization from $185.2 billion is only 0.8%.
USDC's performance was different: the capitalization of this token fell until the end of 2023 to just over $24 billion. The decline came from a peak in mid-2022 of nearly $66 billion. Since the beginning of 2024, USDC has grown almost without interruption, peaking at the end of 2025 at $77.4 billion.
The 5% growth in February followed a January decline from $76.3 billion to $72.2 billion. In other words, this month's growth brought the capitalization back to its late December 2025 levels.
A year of records and recognition
The current February decline looks particularly stark against the backdrop of the impressive results of 2025, which was a record year for stablecoins. After US President Donald Trump returned to the White House in early 2025 and declared digital dollars a national priority, the market experienced explosive growth.
According to Artemis, by the end of 2025, the total volume of stablecoin transactions had soared by 72% to $33 trillion. The passage of the GENIUS Act in July last year established clear legal norms for issuers, prompting traditional business giants, including Standard Chartered Bank, Walmart, and Amazon, to adopt the technology.
In the structure of last year's transactions, USDC took a dominant position with a volume of $18.3 trillion, while USDT processed $13.3 trillion. Experts explained this by the different nature of their use: USDT is more often used for real settlements and transfers between users, rather than for high-frequency trading on DeFi exchanges.
“If we only consider transactions in which a user sends only stablecoins to another user, USDT accounted for approximately 70% of the total volume in 2025 among all stablecoins,” said Tether CEO Paolo Ardoino.
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