Stablecoin Withdrawals Indicate Capital Leaving While Bitcoin Remains Steady

Stablecoin Market Contracts Amid Bitcoin Slump

Over the past week, the total supply of stablecoins has continued to decrease, mirroring Bitcoin’s ongoing decline that began a fortnight ago.

According to data from on-chain analytics provider Santiment, the combined market value of the twelve largest stablecoins has dropped by approximately $2.24 billion in the last ten days. This outflow has paralleled Bitcoin’s fall from $95,000 to $88,441, as reported by CoinGecko.

Although Bitcoin has rebounded 1.4% today to reach $88,500, it is still down 4.2% for the week.

Santiment noted, “Typically, when traders exit Bitcoin or altcoins, their funds remain within the crypto ecosystem as stablecoins. A declining stablecoin market cap suggests that many are converting their holdings to fiat currency rather than waiting to re-enter the market on price dips.”

This trend is also evident in derivatives markets. Data from Velo shows that Bitcoin’s total open interest—the sum of all active positions—has been fluctuating between 245,000 and 267,000 BTC for several weeks.

Key Factors Behind Capital Outflows

Two main drivers are influencing the current capital flight: Bitcoin’s historical response to macroeconomic stress and a renewed preference for gold as a traditional safe haven.

Jordan Jefferson, founder of the Dogecoin app platform DogeOS, previously explained that Bitcoin often underperforms during periods of global economic uncertainty—a pattern that has repeated itself over time.

He added that the present downturn, which began after Bitcoin’s record high in October and has been fueled by shifting geopolitical dynamics and policy ambiguity, aligns with this established trend.

Tim Sun, a senior researcher at HashKey Group, told Decrypt, “Gold’s reputation is built on millennia of trust and its relatively stable price.”

Gold’s steady climb to a new all-time high of $5,100 per ounce this week highlights its enduring appeal as a safe haven.

Meanwhile, Bitcoin has struggled to attract similar demand.

“Its high price swings make it challenging to serve as a large-scale safe haven,” Sun observed. He also pointed out that most global wealth is held by individuals over 50, who have repeatedly relied on gold during times of crisis and may view Bitcoin as a speculative technology favored by younger generations.

For these investors, Sun said, Bitcoin is “still seen as a risky tech investment or a trend among the youth.”