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2d ago

Stablecoin Supply Contracts Sharply as Cash Leaves Crypto, Threatening Bitcoin Rebound

Analysts point to redemptions into fiat and flows into record‑rallying gold and silver that are draining on‑chain buying power and leaving markets vulnerable.

Erc 20 stablecoins log first major cap drop of this market cycle
Bitcoin [BTC]
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Stablecoin Market Drops $7B: What’s Next for Crypto?

Overview

  • ERC‑20 stablecoin market cap fell about $7 billion in a week to roughly $155 billion, marking the first sharp drop of this cycle, according to CryptoQuant data shared by Darkfost.
  • The combined value of the top 12 stablecoins declined by roughly $2.24 billion over 10 days, a slide that tracked Bitcoin’s move from about $95,000 to near $88,000, Santiment reported.
  • CoinDesk reports USDC led the pullback, shedding more than $4 billion in 10 days, while Tether fell just over $1 billion, taking their combined value to the lowest since late November and coinciding with outflows from U.S. spot bitcoin ETFs.
  • On‑chain services say shrinking stablecoin balances reflect investors redeeming to fiat rather than parking ‘dry powder,’ with capital rotating to safe havens as gold and silver notch record highs.
  • With less stablecoin liquidity to absorb selling, analysts warn rebounds may be weaker and downside risk higher for Bitcoin and especially altcoins, though it remains unclear whether this is a brief pause or a more structural shift.