In 2023, the supply of USDT on cryptocurrency exchanges decreased by 28%, suggesting a general decline in the demand for stablecoins. The ongoing unrest in the U.S. dollar-backed stablecoin market has benefited Tether, which saw its market capitalization rise significantly in Q1 2023 at the expense of other stablecoins.
The USDT has regained its dollar peg after losing it at the height of the banking crisis, but investors are staying away from local companies due to the U.S. government’s intensifying crackdown on cryptocurrency.
The total stablecoin balance across all exchanges has decreased by 41% to $22.31 billion, while the balance of Tether on exchanges has decreased by 28% year to date to 12.88 billion USDT. A crypto market rally and a decline in stablecoin reserves may indicate that traders have been converting their crypto dollars to buy Bitcoin and Ether.
