Tether Hits ATH in Circulating Supply, but Is USDT Depegging Imminent?

Largest stablecoin Tether has hit an All-time High (ATH) on its circulating supply. The dollar-pegged stablecoin USDT recorded expansion to a record $187.3 billion in market capitalization in Q4, 2025. This is notable, given the bearish conditions in the broader crypto market following October’s liquidation season. There are questions about further unpegging.

Tether Records Multiple Milestones

The growing number of stablecoins from competitors has not been able to displace the coin. The broader crypto market experienced a major liquidation event on Oct. 10, triggered by the conversations around the US-China tariff war.

Upon this event, the market cap of Circle’s USDC, the second-largest stablecoin, saw some fluctuations in the rest of Q4. It later closed the period unchanged to a large extent. Also, Ethena’s synthetic dollar USDe, which secured the third position among stablecoins on CoinMarketCap, saw a 57% drawdown.

While its rivals struggled, the average number of monthly active USDt wallets spiked to 24.8 million. This represents 70% of all wallets holding stablecoins, while quarterly transfer volume jumped as high as $4.4 trillion. The number of onchain transfers increased to 2.2 billion.

Tether’s total reserves stood at $192.9 billion by the close of Q4 2025. This was a notable increase, considering that it was just $11.7 billion from the previous quarter. Net equity recorded was around $6.3 billion.

USDT Unpegging Raises Questions

Amid these interesting reports, USDT is at risk of unpegging from $1. It recently went to $0.9980, marking its weakest peg in more than 5 years.

On this basis, some analysts are beginning to believe that a full untethering could hit soon. Should this be the case, it could impact negatively on the broader crypto market. The extent of the potential downtrend is tied to the more than 87% of trading volume that flows through USDT.

Meanwhile, USDT was officially recognized in Q4 2025 as an Accepted Fiat-Referenced Token (AFRT) by the Abu Dhabi Global Market (ADGM). This meant that the stablecoin is officially available for use on multiple blockchains, including Aptos, Celo, Cosmos, Kaia, Near, Polkadot, Tezos, TON, and TRON.

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