The largest stablecoin by market capitalization has seen its circulating supply decline to around $73 billion on Monday from $83 billion on May 10, according to data from CoinGecko.
Investors have withdrawn over $10 billion worth of Tether in the past two weeks, over heightened concern and regulatory scrutiny around the stablecoin.
By contrast, USD Coin USDCUSD, -0.01% and Binance USD, the second and third largest stablecoins, saw their market capitalization increase by $5 billion and $1.5 billion, respectively, over the same period, according CoinGecko data. “Tether’s redemption mechanism is reserved for verified users and only executed above a $100k threshold, which leaves market sell orders as the easiest route for smaller traders to cash out, adding to the selling pressure throughout the week,” analysts at Kaiko Research wrote in a Monday note.
Different from algorithmic stablecoin USDTerra, which collapsed earlier this month, Tether is backed by a reserve of assets. However, critics have long expressed concerns over the composition of its reserve, as 25% of the assets, or $20.1 billion, was in commercial paper and certificates of deposit, which are considered less liquid than cash, as of March 31.
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