Tether Hits Record $187.3B Supply as USDT Shows Weakest Peg in 5+ Years
Tether’s USDT reached a record circulating supply of $187.3 billion in Q4 2025, even as the wider crypto market faced headwinds after October liquidation events. On-chain activity for USDT surged: monthly active wallets averaged 24.8 million (about 70% of stablecoin wallets), quarterly transfer volume rose to $4.4 trillion, and transfers hit 2.2 billion. Tether reported $192.9 billion in total reserves and roughly $6.3 billion in net equity at quarter-end, with US Treasury holdings increased to $141.6 billion. Distribution shows ~two-thirds of supply sits in savings wallets and centralized exchanges, while the remainder fuels payments, remittances and DeFi. Despite these fundamentals, USDT briefly weakened to $0.9980 — its weakest peg in over five years — raising depegging concerns among analysts. Given that an estimated >87% of crypto trading volume routes through USDT, a material depeg could dent market liquidity and price discovery. Regulatory progress continued: USDT was designated an Accepted Fiat-Referenced Token (AFRT) by Abu Dhabi Global Market and made available across many blockchains (including TRON, Aptos, Celo, Cosmos, Near, Polkadot, Tezos, TON). Tether also faces scrutiny for illicit-use metrics — Tron-based USDT accounts for a large share of high-risk flows — and says it has monitoring and freeze programs with partners such as TRM Labs. Recent product moves include issuing a GENIUS Act–compliant USD stablecoin via Anchorage Digital Bank (USAt) and integrating USDT/Tether Gold into Opera’s MiniPay for emerging markets. For traders: monitor USDT peg stability, reserve disclosures, on-chain flow from exchanges, and regulatory signals — any renewed stress or withdrawal flows could tighten liquidity and amplify volatility across crypto markets.
Neutral
The news mixes positive scale and on-chain usage with a clear weakness in peg and illicit-use scrutiny. Record supply, rising transfer volume and sizable reserves argue for structural importance of USDT and reduce short-term solvency concerns. At the same time, a measurable slip in the peg to $0.9980, reports of high-risk flows (especially on TRON), and the potential for large withdrawal or exchange outflows create credible short-term downside risk. For the USDT price itself, these forces counterbalance: strong demand and reserves support the peg, while depeg scares and regulatory/forensic scrutiny increase the chance of temporary stress. Therefore the expected price impact is best classified as neutral — traders should expect possible short-term volatility around peg events, but no clear directional bias absent larger reserve shortfalls or regulatory actions. Practical implications: monitor exchange net flows, on-chain concentration, reserve reports and any freezing/partnership enforcement updates; large withdrawals or loss of market-making support would turn the outlook bearish, while continued reserve transparency and steady inflows would restore confidence.