While the broader cryptocurrency market endured one of its steepest contractions in years, Tether’s USDT quietly delivered a striking counter-narrative. Even as total crypto market capitalization fell by more than a third, USDT expanded its global footprint, adding over 35 million users in a single quarter and lifting its total user base beyond half a billion. The stablecoin’s market capitalization, reserve strength, and user engagement metrics all reached historic highs, underscoring its role as crypto’s de facto liquidity backbone. In a market defined by volatility and retrenchment, Tether emerged not merely intact — but structurally stronger.
The fourth quarter of 2025 delivered a stark contrast between the fortunes of the broader cryptocurrency market and the world’s largest stablecoin. While total crypto market capitalization declined by more than one-third between October 2025 and early February 2026, Tether’s USDT continued to expand across nearly every measurable dimension.
During the quarter, USDT added an estimated 35.2 million new users, lifting its cumulative user base to 534.5 million. This figure captures both on-chain wallet holders and users interacting with USDT through centralized exchanges and custodial platforms. The result marked the eighth consecutive quarter in which Tether added more than 30 million users, a streak that stands in sharp contrast to the contraction seen across most crypto assets.
At the asset level, USDT’s market capitalization reached $187.3 billion, further consolidating its position as the dominant dollar-pegged stablecoin globally.
The most striking growth came directly on-chain. On-chain USDT holders increased by 14.7 million during Q4, pushing the total to 139.1 million wallets — the largest quarterly expansion ever recorded for the token.
User behavior within these wallets highlights USDT’s evolving utility profile:
30.8% of wallets acted as full savers, retaining 100% of the USDT they received
6.7% qualified as partial savers, holding between two-thirds and all incoming funds
62.6% functioned primarily as senders, retaining less than two-thirds of received USDT
This distribution underscores USDT’s dual role as both a store of value during volatility and a transactional medium for cross-platform liquidity.
Beyond raw wallet counts, engagement data reinforces Tether’s growing centrality within the stablecoin ecosystem. Monthly active on-chain USDT users averaged 24.8 million, accounting for 68.4% of all stablecoin monthly active users — the highest proportion ever recorded.
This dominance suggests that even as speculative trading activity declined, USDT remained the preferred liquidity rail for users navigating market stress, exchange transfers, and capital preservation strategies.
Tether’s operational resilience is closely tied to the scale and composition of its reserves. By the end of Q4 2025, total reserves reached $192.9 billion, reflecting steady accumulation across multiple asset classes.
Key reserve components included:
96,184 BTC, representing an increase of 9,850 Bitcoin during the quarter
127.5 metric tons of gold, up 21.9 metric tons
$141.6 billion in U.S. Treasuries, rising by $6.5 billion in Q4 alone
Net equity stood at $6.3 billion, reinforcing the company’s capital buffer.
On an annual basis, Tether emerged as a major sovereign-scale buyer of U.S. government debt. In 2025, the firm added $28.2 billion in U.S. Treasuries, ranking as the seventh-largest purchaser globally — surpassing national buyers such as Taiwan and South Korea.
The October 10, 2025, crypto liquidation cascade triggered a prolonged downturn that rippled through digital asset markets. Yet USDT diverged sharply from its peers.
During the period following the liquidation event:
This divergence highlights USDT’s status as the primary refuge asset within crypto, absorbing capital as investors exited higher-risk tokens.
By quarter-end, USDT holdings were distributed across multiple user segments:
Savers increased their holdings by $2.9 billion, reaching $62.1 billion, while senders added $2.2 billion. In contrast, USDT held in decentralized exchanges and DeFi protocols declined by $3 billion, falling to $7.1 billion.
The shift reflects a broader retreat from DeFi risk exposure during market stress, alongside a migration toward custodial venues and conservative holding strategies.
Alongside its operational performance, Tether has also been recalibrating its capital strategy. Reports earlier this month indicated that the company scaled back a proposed fundraising round after investors expressed resistance to a $500 billion valuation.
Advisers are now exploring a fundraise closer to $5 billion, substantially lower than the $15-$20 billion initially discussed. According to CEO Paolo Ardoino, the higher valuation was never a formal target, and Tether does not face an urgent need for external capital.
Discussions remain preliminary, with no finalized decision on timing or deal size, reflecting Tether’s strong balance sheet and strategic optionality.
Tether’s Q4 performance offers several broader insights:
Liquidity concentrates during stress, and USDT has become the default settlement layer for that capital
User growth is decoupling from speculative cycles, signaling structural adoption rather than trading-driven inflows
Balance-sheet scale now rivals sovereign actors, especially in U.S. Treasury markets
Stablecoins are increasingly macro-relevant, blurring the line between crypto infrastructure and global finance
In a quarter defined by retrenchment, USDT’s expansion suggests that the stablecoin layer may be emerging as crypto’s most durable foundation, even as risk assets fluctuate.
