USDT Supply Drops by 1.5 Billion Dollars in February: Analysis

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USDT Supply Drops by 1.5 Billion Dollars in February: Analysis

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. USDTs 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 Financials 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.