Stablecoin supply falls $14.2B in biggest 30-day drop since June 2022

Stablecoin supply fell by $14.2 billion over 30 days, the biggest drop since June 2022, according to Glassnode.

Key points:

• The total supply of stablecoins fell by $14.2 billion over the 30 days to Nov. 11, the largest 30-day drop since June 2022.
• Tether (USDT) is trading slightly below it sUS dollar peg.
• The Coinbase Premium Index remains negative after dropping to its lowest level in four years at the end of October.

Stablecoin supply drop most acute since June 2022

The rolling 30-day contraction stablecoin supply hit $14.2 billion this week, more than the $9.5 billion drop seen as Bitcoin (BTC) fell below $58,000 on July 1. It also marks the most pronounced drawdown since June 2022, when supply fell by nearly $30 billion.

Selected stablecoin supply data. Source: Glassnode

Stablecoin liquidity is a key yardstick for gauging crypto market sentiment.

“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 commented. 

USDT, the largest stablecoin by market cap, continues to trade slightly below its $1 peg, per data from TradingView. Glassnode attributes the phenomenon to the “same pressure” from investors rotating out of the stablecoin market.