The combined market capitalization of the top stablecoins has declined sharply in recent days, as some capital appears to be rotating out of the cryptocurrency ecosystem and into traditional safe-haven assets like gold and silver.
According to recent on-chain analytics, the total market cap of the 12 largest stablecoins fell by approximately $2.24 billion over the past 10 days, reflecting a meaningful contraction in stablecoin supply and liquidity available for crypto trading or re-entry.
According to a post on X by cryptocurrency analytics firm Santiment, stablecoin market capitalization has declined significantly, along with Bitcoin’s price. However, demand for gold and silver has increased, indicating that people are moving their money from cryptocurrencies to traditional safe-haven assets amid higher uncertainty.
Investors move money from crypto to gold and silver
According to Santiment, the reduction in stablecoins has happened at the same time that gold and silver have reached new all-time highs. This further supports the notion that people are choosing safety over risk as uncertainty increases.
This is a common occurrence during market stress, so investors tend to shift funds from risky assets, such as cryptocurrencies, to more stable options, such as gold and silver.
The analytics firm further stated that, in general, money does not leave the cryptocurrency market immediately after traders sell their Bitcoin or other cryptocurrencies. The money is usually held in stablecoins while investors await market signals or buying opportunities.
This time, however, the decline in stablecoin market value indicates a withdrawal of funds from the crypto system and an investment in cash or other commodities.
This change is much clearer now, especially since Bitcoin has continued to lose value following a significant market drop in October. During this period, over $19 billion in borrowed crypto bets were wiped out, causing Bitcoin to drop sharply in a single day and then continue to decline. Meanwhile, gold has been rising, up over 20% and past the $5,000 level.
Santiment noted that the value of cryptocurrencies is declining while that of precious metals such as gold is rising, indicating where the money is flowing. It was also noted that this is not just a trend among individual investors; there is growing interest in gold among people in the cryptocurrency industry as well.
For example, the stablecoin company Tether increased its gold reserves in the fourth quarter of 2025 by buying 27 metric tons worth $4.4 billion, according to Santiment. This indicates that even crypto companies are seeking stability in traditional assets amid uncertain market conditions.
Fewer stablecoins make it harder to buy crypto
In this regard, Santiment explained that stablecoins are an essential source of liquidity in the crypto market because they are primarily used to buy and sell digital assets. When the supply of stablecoins is high, there is an abundance of funds available to enter the market, thereby helping stabilize it.
However, when the supply is low, there is less money available to buy assets. The analytics firm further warned that when the stablecoin’s liquidity is low, its recovery tends to be slower and less convincing, especially during uncertain times.
Without the influx of new capital into stablecoins, the recovery of the stablecoin tends to lose steam, as there is less buying pressure to drive up the prices.
According to Santiment, this situation affects altcoins more. Altcoins are more reliant on fresh money to keep moving. When stablecoins’ supply decreases, altcoins will likely decrease more and longer. Bitcoin will likely remain stronger during these periods, but even that will have an upper limit due to the lower supply.
Moving forward, Santiment explained that the crypto market will likely rebound more clearly when the market caps of stablecoins no longer decrease but start increasing. This will mean that new funds are entering the system, and investors are becoming more confident.
However, until that happens, the low liquidity will continue to hold prices down
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Source: https://www.cryptopolitan.com/stablecoin-market-down-2-2b-on-crypto-shift/
