Recently, $USDT has indeed been having a tough time. In February 2026, its supply plummeted by approximately $1.5 billion, the most severe drop since the FTX collapse. The overall stablecoin market size didn't shrink much, as funds flooded into the more compliant USDC for safe haven. This loss of confidence mainly stems from the tightening of the European MiCA regulations and long-term doubts among large investors about Tether's financial transparency.