Regulatory rumors surrounding USDT, particularly EU MiCA compliance and potential U.S. restrictions, threaten its market dominance ($137B market cap, March 2025). Exchanges like Coinbase delisting USDT in Europe signal a shift to compliant alternatives like USDC, eroding Tether’s 70% stablecoin share. This could disrupt liquidity on centralized exchanges, triggering altcoin sell-offs as traders pivot to decentralized platforms or rival stablecoins. Altcoins heavily reliant on USDT pairs may face short-term volatility, though decentralized finance (DeFi) ecosystems could benefit from increased DEX adoption. USDT’s resilience hinges on adapting to global regulations.