Tether’s USDt stablecoin has experienced a 2.8% market cap decline since its peak of $141 billion on Dec. 19, 2024, as reported by CoinGecko.
Trading volumes for USDT have also dropped significantly, plummeting 64% from approximately $154 billion in mid-December to $55 billion by Jan. 6, 2025.
Despite these figures, Matrixport, a crypto financial services platform, suggests this trend is not indicative of a bearish market turn.
In a Jan. 6 post on X, Matrixport attributed the decline to the holiday season slowdown in trading activity rather than a fundamental shift in market sentiment.
Matrixport remains optimistic, predicting that bullish momentum will resume shortly.
The firm noted that increasing stablecoin trading volumes often signal bullish trends as they reflect greater fiat inflows into the crypto ecosystem.
“However, when these trends reverse, it often signals a consolidation phase for Bitcoin and the broader crypto market,” Matrixport stated.
“While Tether’s market cap has declined recently and trading volumes have tapered off, it may be premature to turn bearish. These trends could simply reflect the seasonal lull during the Christmas holiday period. With the new year underway, it won’t be long before we see whether the market’s bullish momentum resumes,” the post added.
Other analysts have echoed Matrixport’s perspective.
CryptoQuant’s Axel Adler commented on Jan. 4 that Bitcoin needs increased trading volume to trigger a strong bullish impulse, which is likely to return after the holiday season.
Meanwhile, community discussions around Tether have criticized reports linking its market cap decline to the European Union’s Markets in Crypto-Assets Regulation (MiCA).
Although some reports suggested Tether would be delisted from European exchanges by Dec. 30, 2024, local regulators have issued no official guidance to that effect.
The European Securities and Markets Authority (ESMA) has also refrained from commenting on USDT’s compliance under MiCA.
