Tether USDT sees an all-time low in trading volume for the first quarter of 2022. Since the beginning of the year, the stablecoin has dropped lower without any sign of a bullish market.
The cryptocurrency market experienced negative trading volume in the first quarter of 2022. According to various sources, the market trends saw a significant drop due to the global crisis, mainly the Ukraine-Russia war.
Some cryptocurrencies rose upward during January but dropped in the second month. To recover from the loss, investors turned to stablecoins. Stablecoins is a category of cryptocurrency that offers price stability when the market is at a loss.
USDT is the native stablecoin of Tether Limited, a Hong Kong-based company. It operates on Bitcoin and Ethereum blockchains and was recently added to the Cardano blockchain as well. With a market capitalization of over $82 billion, USDT is the most common stablecoin.
Compared to the usual thought that USDT would rise in the crypto market, stablecoin failed to do so. The trading volume shows that investors are least interested in USDT.
Tether losses traders’ trust
The reason for Tether to experience a bearish market is due to the loss of traders’ trust. According to CNBC, last year, Tether bought a large amount of commercial paper (corporate loan) and refused to reveal details about it.
When the traders questioned its reserves, the company promised to release a proper breakdown of its digital currency with details but failed to provide any updates. The company provided its community with the quality ratings of the debt it owns.
This can be a clear indication of why USDT suffered in the first quarter of 2022.
USDT’s first quarterly report 2021 vs. 2022
Tether’s first quarterly report 2022 shows that the stablecoin maintained its trading volume at $5.3 trillion. When comparing prices with the first quarter of 2021, there was a 46% decline in the trading volume.
Transaction count: 2021 vs. 2022
Based on the data collected and compared, UDST recorded a huge difference in transaction count for the first quarter. Here is the monthly comparison report for a detailed explanation:
- January: In 2022, the transaction count was 17,385; however, in 2021, it was 15,211,685.
- February: In 2022, the transaction count for USDT was 4,266. In 2021, it was 17,214,849.
- March: In 2022, the transaction count dropped even lower to 4,803. In 2021, USDT rose to 20,032,728.
These monthly details show that in 2021 USDT increased every month in terms of transaction cost, but decreased in 2022.
Trading volume: 2021 vs. 2022
As mentioned above, USDT saw a 46% decline in the trading volume between the first quarter of 2021 and 2022. Here is a monthly report comparison:
- January: In 2022, USDT’s trading volume reached $1.8 trillion with a single-day peak of $90.4 billion. In 2021, the trading volume recorded about $3.4 trillion with a single-day peak of $183.6 billion. This shows a bad start for 2022 in the crypto market.
- February: In 2022, the trading volume decreased to $1.5 trillion with a single-day peak of $107.9 billion. In 2021, the trading volume increased to $3.7 trillion with a $195.9 billion single-day high. Between these two years, one can see there was progress last year, but a decline this year.
- March: USDT trading volume for 2022 rose to $1.9 trillion with a single-day high in the region of $90.4 billion. In 2021, the trading volume dropped to $2.7 trillion with a $111.2 billion single-day high. This shows progress in 2022 but not enough.
Price reaction: 2021 vs. 2022
Looking at the 2022 quarterly report, the chart shows there weren’t any significant lows or highs in the prices of USDT. From the opening price in January to the closing price in March, the range stayed the same, at $1.
The same was the case in 2021.
The data analysis for USDT shows that the stablecoin didn’t record any significant progress in the crypto market. Although the first quarter was a bad one for most cryptocurrencies, they all are slowly rising in the chart since the beginning of April.
Stablecoins are defined by their stability. If they fail to maintain their position, they easily lose trust. The same is the case with USDT.
If Tether makes an effort to attract traders, it can manage to recover from the first quarterly loss in the second or third quarter of 2022. Until then, nothing can be predicted.