The Unthinkable Happened: USDT Supply Is Declining

The total supply of Tether tokens has been shrinking for the second month in a row. For me, that comes as a real surprise. Year after year, I got used to seeing the supply grow and grow. It felt like every other day there was another headline about Tether minting yet another billion.

For the supply to decline, it is not enough to simply pause new issuance. Someone has to redeem their tokens - return them to Tether and receive back the dollars that originally backed them. Critics used to claim this was practically impossible, arguing that Tether would not hand over the cash and that the total amount of USDT could only move in one direction - up.

And now we are seeing two consecutive months of contraction, and on a significant scale. In February alone, the total supply of USDT has already dropped by $1.5 billion. Someone is clearly exiting the asset in size.

By the way, can you imagine a bank that would let its client receive a billion - or even a million - dollars from Tether Ltd. without freezing the funds? It is hard for me to picture that scenario. So if you are also considering reducing your exposure to USDT, it is much easier to swap it for another stablecoin or any cryptocurrency on rabbit.io - no limits, no registration required.