Cryptocurrencies are notably below their peak and mounting concerns about stablecoins following the collapse of terraUSD’s (UST) has led to outflows from the largest stablecoin tether (USDT), Citibank (C) said in a report on Tuesday.

These concerns have most likely compounded declines in crypto markets, the report said.

“Volatility has affected user adoption,” the Wall Street giant said, noting that trading volumes and active addresses spiked around the time of the Luna (LUNC) collapse, which indicate user adoption, but these increases have since reverted to previous levels, or even lower.

According to Citi “tentative evidence suggests a reduction in trading volumes and futures positions but not wholesale declines in investor interest in the space.”

“After Luna’s collapse there were concerns about outflows in USDT, but these have since slowed, the bank said. Some flows went to the more “transparent and centralized” USD Coin (USDC) stablecoin, while others exited the market altogether.

Total value locked (TVL) in decentralized finance (DeFi) has fallen in U.S. dollar terms but is stable in terms of ether (ETH), especially when accounting for the value lost in the Anchor protocol following the collapse of UST and LUNC, the note said.

DeFi is an umbrella term used for lending, trading and other financial activities carried out on a blockchain, without traditional intermediaries.

Morgan Stanley (MS) said weakness in crypto markets, the failure of a dollar stablecoin and a reduction in leverage in DeFi was resulting in the “crypto equivalent of quantitative tightening,” in a report Tuesday.

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