Stablecoin Supply Sheds $14.2 Billion in Its Fastest 30-Day Drop

Crypto's dollar float is draining. Total stablecoin supply fell $14.2 billion over 30 days, the steepest contraction since the 2022 bear market, according to a Glassnode report published on Wednesday. Supply now sits just below $280 billion. Decrypt dated the window to 9 November and called it the fastest drop since June 2022, while The Block, carrying the same $14.2 billion figure, gave no end date for its 30 days. Both read the number the same way: fewer dollars parked on exchanges and on-chain means less money available to buy anything.

What a shrinking float means

"A shrinking supply means holders are redeeming stablecoins for dollars and taking that cash out of the market, which leaves less fuel for a rally," Glassnode wrote.

Stablecoins are tokens pegged to the dollar, and traders hold them as cash between positions. Redemption is the exit. A holder sends the token back to the issuer and the dollars leave the system. Glassnode said a return to supply growth would be the first sign that new money is coming in. For scale, The Block noted that the 30-day decline approached $30 billion in June 2022, about five months before bitcoin printed its bear-market low of $15,500 that November. That comparison appears in one account only.

Tether's share of the drop

CryptoQuant, in a report dated Tuesday, put the fall in USDT's market capitalization at $6.6 billion over the 60 days through 7 November. That is more than twice the $3.2 billion it recorded over a comparable stretch in December 2022, after FTX collapsed. USDT still accounts for about 62.8% of stablecoin supply on The Block's data, with Circle's USDC at 25.1%.

The Block's own standfirst says the two shed nearly $11 billion between them over the past month, a different window and a different basket from the headline figure. Those two numbers are not additive and this desk has not merged them. Gold-backed tokens barely moved, holding a combined $5.61 billion against February's $6.31 billion peak. Supply had already contracted for the first time in four years in late July, when it sat near $300 billion.

Where it shows up in price

Stablecoins are not the only money leaving. Glassnode counted about $1.6 billion in net redemptions from US spot bitcoin ETFs over 20 trading sessions, and bitcoin slipped under the average cost basis of short-term holders, roughly $75,600, which leaves most recent buyers underwater. Bitcoin traded near $73,000 on Wednesday after losing $74,000 on the October core inflation print a day earlier. Four readings taken during Thursday's sweep put it between $73,546 and $73,639, on clocks that are not the same.

The counterweights in the same report

Not everything Glassnode published points one way. Leveraged long positions near the current price have largely been flushed out, and buy orders outweigh sell orders in the order book. Wallets holding between 100 and 10,000 BTC have started accumulating. The firm flagged $73,000 as the level that matters and said the trend change that began in August holds while bitcoin stays above its June low.

CryptoQuant reads the same floor from the other side, arguing that a local bitcoin bottom could form before USDT supply turns positive again. Both are forecasts about one number. Neither has happened. The thing to watch is plainer than either: whether the float stops shrinking, and then whether it starts to grow.

Read also: Stablecoins Shed $7.7B in June as Transfer Volume Hits $1.79T