Tether Market Cap Dips 1%: Biggest Drop in Two Years
Concerns about market volatility have been raised by the biggest weekly drop in market value in two years for Tether’s USDT, the top dollar-pegged stablecoin in the world. According to TradingView data, USDT’s market capitalization fell more than 1% to $137.24 billion this week, marking the biggest drop since the FTX exchange meltdown in the second week of November 2022. In mid-December, it reached a record $140.72 billion.
Although the regulations on stablecoins, or cryptocurrencies whose value is tied to a real-world asset like the dollar, went into effect six months ago, the decline comes after several EU-based exchanges and Coinbase (COIN) decided to remove USDT due to noncompliance with the EU’s Markets in Crypto-Assets (MiCA) regulations, which went into full effect on Dec. 30.
To openly offer or trade asset-referenced tokens (ARTs) or e-money tokens (EMTs) within the EU, issuers must hold a MiCA authorization, according to the regulation. Although they are unable to trade USDT on centralized exchanges that comply with MiCA, traders based in the EU are still permitted to hold it in non-custodial wallets.
Tether’s EU Delistings Spark Speculation of Wider Crypto Decline
Investors use USDT widely to finance spot cryptocurrency purchases and derivatives trading, making it a doorway to the cryptocurrency market. Social media users are speculating about a wider decline in the cryptocurrency industry as a result of the delistings and market value decline. However, Karen Tang, the head of APAC partnerships at Orderly Network, a permissionless Web3 liquidity layer, stated in a post on X that these worries could not be justified and that the negative effects could, at most, be limited to the euro area.
Access to @Tether_to set to be restricted in the EU due to MiCa regulation isn’t going to harm USDT dominance. EU isn’t the largest crypto market. Most crypto trading volume occurs in Asia and U.S. All this will do is stunt the EU’s digital assets innovation, which is already slow due to convoluted overregulation. If I could short the EU, I would…
Tang
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