Tether Loses $4.6 Billion in Exchange Liquidity

Tether saw a $4.6 billion reduction in its USDT supply across 19 exchanges and lending platforms during the third quarter. This shift comes as rival issuers offer lucrative incentives to capture a larger share of the liquidity market.

Financial institutions added approximately $1.9 billion in competing tokens during the same period. Circle's USDC received $569 million while Ripple's RLUSD gained $493 million in new inflows.

The Bybit exchange led the decline in USDT with $1.66 billion in withdrawals. Meanwhile, the Binance platform reduced its Tether holdings by $987 million and OKX cut $899 million of the asset.

Derivatives platforms such as Hyperliquid expanded their use of USDC through strategic partnerships. This model allows the platform to receive a portion of the revenue generated by the asset's reserves which creates an additional income stream for the business.

The global stablecoin market shows an intense battle for working capital. Although USDT still accounts for 84% of the value of classified payments, the 59% growth in RLUSD supply reflects a change in exchange custody preferences.