The stablecoin market has experienced its most significant decline since 2022, with a 5.36% drop in capitalization over the past 30 days. According to Defillama data reviewed on Saturday, the market now holds just 91.59% of its peak value from May. Tether’s USDT remains the largest stablecoin, despite a 4.7% monthly decline, while Circle’s USDC has also contracted by 4.9%. Together, USDT and USDC account for $244.423 billion in circulating supply.
Smaller stablecoins have faced even steeper declines. Sky Dollar (USDS) fell 22.04%, World Liberty Financial’s USD1 dropped 24.79%, and Aave’s GHO stablecoin saw a dramatic 61.47% contraction. USD.AI also retreated by 54.56%. However, some stablecoins bucked the trend, with Ripple’s RLUSD rising 15.12%, Ethena’s USDe gaining 3.04%, and Open USD (OUSD) advancing 18.52%. Overall, the stablecoin sector has lost $26.15 billion since mid-May, with $17 billion of that decline occurring in the last 30 days.
The contraction extends to tokenized U.S. Treasury funds, which collectively represent $13.91 billion in value, down 5.36% over the last 30 days. Blackrock’s BUIDL fund declined 24.39% to $1.654 billion, while Circle’s USYC contracted 15.46% to $2.016 billion. Wisdomtree’s WTGXX recorded a 36.43% decline, and Invesco’s USTB shed 26.63%. Conversely, Franklin Templeton’s BENJI expanded 88.38%, Ondo’s SHVon climbed 43.84%, and JPMorgan’s JLTXX gained 4.03%.
The decline in stablecoin supply could signal reduced liquidity in cryptocurrency markets, as stablecoins serve as trading capital and collateral. However, the drop does not necessarily indicate capital flight, as institutional reallocations and collateral shifts may also be at play. The simultaneous contraction of stablecoins and tokenized Treasuries highlights the need for closer monitoring of blockchain-based dollar liquidity.