Tether's USDT lost nearly $1 billion in market capitalization over five days in mid-October 2026, according to Crypto Briefing. The contraction puts pressure on Bitcoin's recovery, while competing stablecoins are not yet absorbing the full outflow.
Tether's USDT shed nearly $1 billion in market capitalization over five days in mid-October 2026. The contraction is putting pressure on Bitcoin's recovery at a delicate moment, Crypto Briefing reports.
Exchanges rotate away from USDT
On-chain analytics firm CryptoQuant tracked the $1 billion decline as Bitcoin was attempting to rebuild upward momentum. Data compiled by Crystal Intelligence gives the broader picture: USDT balances across 19 major exchanges and lending platforms fell by $4.6 billion between early July and October 1, 2026.
Over the same period, those platforms absorbed approximately $1.9 billion in competing stablecoins, primarily USDC and RLUSD. The source reads this as a sign that traders did not exit the market entirely but rotated away from Tether specifically.
Bybit showed the shift most sharply. The exchange shed $1.66 billion in USDT while adding $315 million in RLUSD, the largest net USDT outflow of any platform in the dataset.
Supply slips toward $183 billion
Overall USDT supply declined about 0.4%, or approximately $647 million, through September 2026, leaving the total near $184 billion. By October 20, it had slipped to around $183 billion.
According to Crypto Briefing, the 2024 and 2025 Bitcoin rallies coincided with repeated multi-billion-dollar expansions in USDT's market cap. However, the $1.9 billion that flowed into USDC and RLUSD is a gap, not a replacement for the $4.6 billion USDT lost at exchanges. Competing stablecoins are growing, but not yet in volumes large enough to make the overall liquidity picture neutral.
What to watch next
Crypto Briefing points to three indicators. First, net USDT issuance: a return to net minting, especially in large tranches, would indicate that demand for stablecoin liquidity is recovering. Second, USDC and RLUSD inflows at major exchanges, which will show whether their combined growth can offset USDT's retreat. Third, Bybit's balance sheet, since its trajectory could signal whether exchange-level stablecoin rotation is accelerating or stabilizing.
Source: Crypto Briefing
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