The world’s largest dollar-pegged stablecoin, Tether USDT’s circulating supply, decreased by approximately 1.5 billion dollars in February due to withdrawals by large holders. According to Artemis Analytics data, following a 1.2 billion dollar drop in January, this is on track for the largest monthly supply contraction in three years since the FTX collapse. USDT’s 183 billion dollar market cap accounts for 71% of the stablecoin market (flows linked to ETH detailed analysis).
Tether USDT, monthly percentage supply change, monthly total. Source: Artemis Analytics, Bloomberg
USDT Supply Contraction and Stablecoin Market Rise
The total stablecoin market cap rose by 2.33% in February to 307 billion dollars (DeFiLlama). While USDT and USDC fell by 1.7% and 0.9% respectively, World Liberty Financial’s USD1 increased by 50% to 5.1 billion dollars. Whale wallets sold 69.9 million dollars worth of USDT last week, smart money investors were net sellers while new wallets made purchases worth 591 million dollars (Nansen).
Total stablecoin market cap. Source: DeFiLlama
USDT on Ethereum, token God mode, one-year chart. Source: Nansen
USDT Flows on Ethereum and BlackRock ETH ETF Developments
The Ethereum network, as USDT’s largest platform, is affected by this contraction. BlackRock’s application to receive 18% of staking fees from its new staked Ethereum ETF (February 20, 2026) could accelerate ETH flows. ETH price 1.933 USD (+0.57%), RSI 32.61 (Oversold), in downtrend.
- ETH Support Levels: S1 1.894 USD (Strong, 68% score), S2 1.748 USD
- ETH Resistance Levels: R1 1.955 USD (Strong, 74% score), R2 2.137 USD (EMA20)
- Supertrend: Bearish, EMA20: 2.136 USD
The largest contraction since FTX could increase volatility in ETH futures.
Frequently Asked Questions About USDT Stablecoin Contraction
Why is USDT supply decreasing?
Withdrawals by large whales are triggering the sharpest monthly drop since FTX.
How is ETH affected by USDT contraction?
While USDT flows on Ethereum slow down, the BlackRock ETF could provide new inflows.
What is the state of the stablecoin market?
Total 307 billion USD, newcomers like USD1 growing 50%.
Source: https://en.coinotag.com/usdt-supply-drops-by-15-billion-dollars-in-february-analysis
