Tether’s dollar-pegged stablecoin USDt reached a new all-time high market capitalization of $187.3 billion in Q4 2025, even as the broader cryptocurrency market declined following October’s major liquidation event. The milestone reinforces USDt’s growing dominance in the stablecoin sector during a period when several competitors struggled to maintain traction.
According to Tether’s latest quarterly report, USDt added $12.4 billion in market cap during the fourth quarter alone. While the crypto market faced heightened volatility, USDt continued to attract users, liquidity, and onchain activity.
Rival stablecoins saw mixed results after the October 10 liquidation cascade. Circle’s USDC, the second-largest stablecoin, fluctuated throughout Q4 but ultimately ended the quarter close to its starting level. Meanwhile, Ethena’s synthetic dollar USDe experienced a sharp 57% decline, highlighting the market’s preference for more established, asset-backed stablecoins.
USDt Onchain Activity and Treasury Holdings Hit New Highs
USDt’s onchain metrics reached record levels during the quarter. The average number of monthly active wallets climbed to 24.8 million, accounting for nearly 70% of all stablecoin-holding wallets. Quarterly transfer volume surged to $4.4 trillion, while total onchain transfers reached 2.2 billion, reflecting sustained global usage across exchanges, payments, and decentralized finance.
Tether also reported $192.9 billion in total reserves by the end of Q4, up $11.7 billion from the previous quarter. This left the company with $6.3 billion in net equity. Its exposure to US Treasuries increased significantly to $141.6 billion, placing Tether among the world’s largest holders of US government debt—surpassing several sovereign nations.
User behavior remained relatively stable. Roughly two-thirds of USDt supply is held in savings wallets and centralized exchanges, while the remaining third supports payments, remittances, and DeFi activity across multiple blockchains.
Regulation, Illicit Use, and Expansion Into the US Market
Despite its growth, USDt continues to face scrutiny over illicit activity. Blockchain analytics firm Bitrace reported that $649 billion in stablecoins, or about 5.14% of total stablecoin transaction volume, passed through high-risk addresses in 2024. Tron-based USDt accounted for more than 70% of that activity.
In response, Tether has expanded its compliance and monitoring efforts, partnering with TRM Labs and the Tron network to track, freeze, and prevent illicit fund flows.
In January, Tether also launched USAt, a US-focused, dollar-pegged stablecoin designed to comply with the GENIUS Act. Issued by Anchorage Digital Bank, USAt launched with a $10 million supply on Ethereum, marking Tether’s most direct move into the regulated US stablecoin market.
