Tether’s USDT market capitalization contracted by $6.6 billion over the past 60 days, according to CryptoQuant, a decline that exceeded twice the comparable contraction in December 2022 following FTX’s collapse. The data suggests the pullback is not isolated to Tether, as Circle’s USDC also lost supply over the same period.
Stablecoin Market Shrinks
DefiLlama recorded total stablecoin capitalization at $289.81 billion on November 10, down 4.57% over 30 days and 1.62% over seven days. USDT accounted for approximately $176.23 billion, or 60.81% of the tracked market, despite its capitalization falling 4.26% over the preceding month. USDC declined 3.76% during that period, leaving its market capitalization near $70.38 billion.
The simultaneous declines at both major issuers challenge the argument that traders simply switched between stablecoins. Smaller tokens showed uneven demand: Ripple’s RLUSD gained 9.39% over 30 days, while Ethena’s USDe expanded 4.58%, but those gains did not prevent the broader market capitalization from falling.
Supply as a Liquidity Signal
Stablecoins provide dollar-denominated settlement assets for cryptocurrency trading and on-chain transactions. Their circulating supply offers a liquidity signal, but it does not measure actual Bitcoin purchases. In an October 21 analysis, CryptoQuant contributor Darkfost documented declining exchange stablecoin reserves, with Binance holding $41.6 billion in tracked ERC-20 stablecoins at that time.
Exchange transfers and circulating supply measure different activities. Users can move existing tokens between exchanges and private wallets without changing total issuance. A November 6 Blockonomi report noted tentative improvement in exchange inflows, but those transfers did not establish renewed stablecoin issuance or confirm stronger market-wide buying demand.
Tether Reserves Remain Separate
Tether’s October 30 disclosure listed $191.5 billion in reserves as of September 30, with $183.5 billion in liabilities and approximately $7.95 billion in excess reserves. That report describes an earlier reserve position, not November’s token supply. Tether said USDT issuance remained near $184 billion through September.
DefiLlama’s newer $176.23 billion reading reflects a later market snapshot. Differences in reporting dates and measurement methods also deserve attention. DefiLlama quoted USDT close to $1 on November 10. Falling capitalization alone does not establish reserve shortfalls or a loss of its dollar peg.
Market participants can monitor net issuance, total stablecoin capitalization, and executed spot buying together. Recovering supply could improve potential buying capacity, but would not guarantee higher cryptocurrency prices.
