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Stablecoin Supply Drops $14.2 Billion as Bitcoin Faces ETF Outflows
Glassnode records the steepest contraction since the 2022 bear market as CryptoQuant flags weakening USDT supply
TL;DR
- Global stablecoin supply contracted by $14.2 billion over 30 days, falling below $280 billion for the first time since September 2025.
- U.S. spot Bitcoin ETFs recorded about $1.6 billion in net redemptions, while Bitcoin traded below the average purchase price of short-term holders.
- CryptoQuant reported a significant decline in Tether's USDT supply, although Glassnode identified signs of accumulation among larger Bitcoin holders.
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The cryptocurrency market has experienced its sharpest stablecoin supply contraction since the 2022 bear market, with $14.2 billion disappearing from circulation over the 30 days through November 9, 2026, according to onchain analytics firm Glassnode. The findings, published Wednesday, November 11, showed that total stablecoin supply had fallen to just below $280 billion, a level last seen in September 2025, as Bitcoin faced weakening demand and continued withdrawals from U.S. spot exchange-traded funds.
Stablecoins, typically pegged to the U.S. dollar, serve as a source of liquidity for cryptocurrency trading. Investors use them to hold funds on exchanges and blockchain networks before purchasing other digital assets. A sustained decline in their circulating supply can indicate that investors are redeeming tokens for fiat currency and withdrawing capital from the cryptocurrency market.
"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.
The latest decline was the largest since June 2022, when the market experienced a nearly $30 billion contraction over a comparable period. That earlier downturn preceded Bitcoin's November bear-market low of $15,500 by roughly five months.
Glassnode identified a return to stablecoin supply growth as the "first sign that new money is coming in," making changes in circulating supply an important indicator of potential renewed demand.
Tether USDT Supply Declines as Stablecoin Liquidity Contracts
Tether's USDT accounted for a substantial portion of the latest reduction in stablecoin liquidity. A separate CryptoQuant analysis published Tuesday, November 10, showed that the largest stablecoin by market capitalization had experienced a particularly sharp decline.
CryptoQuant found that USDT's market capitalization had fallen considerably more than during a comparable period following the collapse of cryptocurrency exchange FTX. Meanwhile, data from The Block showed that USDT and Circle's USDC together had shed nearly $11 billion in supply over the previous month.
Gold-backed tokens have remained relatively stable compared with dollar-pegged stablecoins. Their earlier market capitalization peak coincided with gold reaching an all-time high of approximately $5,350 per troy ounce.
CryptoQuant also cautioned against interpreting stablecoin supply changes as an exact timing indicator for Bitcoin. The analytics firm said a local Bitcoin price bottom could form before USDT supply growth turns positive again.
Bitcoin ETF Redemptions Add to Weakening Market Demand
The reduction in stablecoin supply has coincided with additional signs of weaker demand for Bitcoin. Glassnode found that U.S. spot Bitcoin ETFs experienced approximately $1.6 billion in net redemptions across 20 trading sessions, while Bitcoin traded at a discount on Coinbase, an indicator of subdued demand from U.S. investors.
The Bitcoin price traded near $73,000 on Wednesday after slipping below the estimated $75,600 average cost basis of short-term holders. This left many recent buyers holding unrealized losses. Glassnode identified the lower price level as an important support area and said the broader trend change that began in August remained intact as long as Bitcoin stayed above its June low.
Selling pressure was also reflected in exchange activity. CryptoQuant separately reported that more than $3.6 billion worth of Bitcoin had recently been transferred to exchanges at a loss, potentially in preparation for selling.
Despite these developments, Glassnode identified several indicators suggesting that some investors were accumulating Bitcoin. Most leveraged long positions near the prevailing market price had been cleared, buy orders exceeded sell orders in the order book, and wallets holding between 100 and 10,000 BTC had begun increasing their holdings.
Major Banks Increase Competition in the Stablecoin Market
The stablecoin contraction comes as traditional financial institutions expand their involvement in the sector. Goldman Sachs, Citi, and Deutsche Bank are among the global banks backing a $270 million initiative challenging established cryptocurrency stablecoin issuers.
The development adds a competitive dimension to a market already experiencing declining circulating supply and weaker demand for digital assets. At the same time, the Federal Reserve has recently introduced stablecoin rules addressing reserves and capital requirements.
Together, the developments place the latest supply contraction alongside changes in institutional participation and the regulatory environment for stablecoin issuers.
This article has been refined and enhanced by ChatGPT.
