Stablecoin

On February 5 and 6, Bitcoin slipped below $61,000 before rebounding to $66,000–$68,000, while realized losses peaked near $1.24 billion per day and later eased to about $480 million. In early January 2026, USDT supply was about $187 billion and fell under $184 billion by mid‑February, with a 60‑day market‑cap change below ~$3 billion. Some analysts view these extremes and a Fear & Greed low near 5 as potential signs of market exhaustion.

Stablecoin issuers are poised to become major buyers of short‑dated U.S. Treasuries, potentially adding $0.8T–$1T of demand by 2028. Market capitalization is projected to approach $2T, with reserve requirements under the July 2025 GENIUS Act concentrating assets in 0–3 month T‑bills. Emerging‑market adoption is expected to drive most of the expansion.

In a report on February 23, 2026, the Bank of Korea urged that only licensed commercial banks be allowed to issue won-backed stablecoins at the outset. Options under debate include a bank-led consortium with at least 51% equity control and 100% reserves in high-quality liquid assets, following a February Bithumb error involving $40 billion that heightened stability concerns.

Over the weekend, Bitcoin fell below $65,000 before stabilizing on Monday, while Polymarket showed a 72% probability of BTC dropping under $55,000 with $1.2 million in volume. Bitcoin market capitalization decreased to $1.31 trillion, ranking 15th globally, and traders also priced 61% and 47% odds for dips below $50,000 and $45,000.

In the week of Feb. 15–22, US spot Bitcoin ETFs recorded $165.8 million in outflows on Thursday, bringing weekly redemptions to $403.9 million and pushing year-to-date losses to $2.7 billion, while trading volumes fell 21%. Metaplanet CEO Simon Gerovich rejected accusations that the firm delayed or obscured disclosures around its Bitcoin purchases, options strategy and BTC-backed borrowings. The period also saw fresh debate on stablecoin rewards in US Senate negotiations and ongoing discussions over quantum risks, with Bitcoin developer Matt Corallo arguing that such fears do not explain Bitcoin’s recent 46% drawdown.

The White House held a third closed-door session on Thursday to assess rules for rewards tied to stablecoin balances, a key element of a broader US crypto market-structure bill. The meeting began at 9 a.m. ET and included Ripple, Coinbase, bank trade groups, and industry associations; participants called it constructive, but no agreement emerged.

USDT Dominance hit 9% resistance and printed a weekly rejection with RSI near 78, according to ParaboliXBT. BTC Dominance broke below a weekly rising wedge and closed around 58.99% as momentum softened on TradingView. With sentiment at extreme fear in February and BTC roughly 46% below its October 2025 peak, traders are watching for an altcoin rotation.

Staff at the SEC’s Division of Trading and Markets clarified last week that broker-dealers may apply a 2% haircut to stablecoin balances when calculating net capital. Commissioner Hester Peirce welcomed the change, and industry voices said it lets firms hold and use stablecoins without skewing capital ratios.

Digital asset firm New Frontier Labs has selected BitGo Bank & Trust National Association, part of crypto infrastructure company BitGo, to issue and custody the FYUSD dollar-pegged stablecoin for institutional investors in Asia. FYUSD follows the GENIUS Act framework, including 1:1 backing with cash or short-term US Treasurys and AML/KYC controls, and is supported by Fypher tools that enable programmable settlement for AI-driven commerce.

According to CryptoOnchain via CryptoQuant QuickTake, TRC-20 USDT balances on Binance climbed from about $385 million on December 24 to roughly $5.2 billion by February 21. The analyst said the jump coincided with Bitcoin and Ethereum testing key supports, implying liquidity rotation and positioning. Bitcoin was around $67,971 at the time of writing.