Tether's USDT stablecoin demonstrated remarkable resilience during the severe crypto market contraction in late 2025, achieving record growth in both market capitalization and user adoption according to its Q4 2025 market report. The stablecoin's market cap reached a new peak of $187.3 billion, representing a quarterly increase of $12.4 billion.
The report revealed that USDT added an estimated 35.2 million new users in Q4 2025, bringing its total user base to 534.5 million. This marks the eighth consecutive quarter where USDT gained over 30 million new users. On-chain metrics showed the number of wallet holders increased by 14.7 million to 139.1 million, with USDT wallets now accounting for 70.7% of all stablecoin wallets. Monthly active on-chain users reached a record average of 24.8 million per quarter.
Tether's total reserves expanded significantly to $192.9 billion, up $11.7 billion from the previous quarter. These reserves include $141.6 billion in US Treasury bonds (which would place Tether among the world's largest Treasury holders if it were a country), 96,184 BTC, and 127.5 metric tons of gold. The company attributes USDT's growth to its dual role as both a store of value and a means of transfer, with demand coming from savings, payments, and cross-border transfers rather than purely speculative trading.
Despite the broader cryptocurrency market capitalization declining by more than one-third after the October 10, 2025 liquidation wave, USDT's supply grew by 3.5% through February 1, 2026. On-chain transaction volume reached $4.4 trillion in Q4, and USDT's share of spot trading volumes on centralized exchanges climbed to 61.5%, highlighting its dominant role as the primary settlement asset in crypto markets.
Recent issuance activity suggests continued demand, with Tether minting $1 billion in USDT on February 4, 2026, part of approximately $3 billion in stablecoins issued by Tether and Circle over three days. However, this rapid expansion has intensified scrutiny, with USDT briefly slipping to around $0.9980 in early February—its weakest peg level in over five years—sparking concerns about stability.
The scale of Tether's growth has fueled speculation that USDT could eventually challenge Ethereum's position as the second-largest cryptocurrency by market capitalization, particularly during periods of risk aversion when capital rotates into stable assets. This concentration of liquidity and systemic importance in a single instrument means that the stability of Tether's peg is increasingly tied to the resilience of the entire crypto market.
