Summary
- Stablecoin supply stagnation is limiting Bitcoin’s upside as funds are not being redeployed into the crypto market and are instead exiting into fiat.
- Investor money is moving into safe-haven assets such as precious metals amid President Trump’s proposed global tariffs and heightened geopolitical tensions.
- While Bitcoin and Ethereum have fallen, safe-haven preference is strengthening as gold, silver and tokenized real-world assets (RWA) such as Tether Gold (XAUT) show strength.
As stablecoin supply shrinks and tariff uncertainty adds to the overhang, analysts say the crypto market’s capacity for a rebound—led by Bitcoin (BTC)—is being constrained.
According to Cointelegraph, a crypto-focused outlet, crypto services provider Matrixport said stablecoin supply stagnation is acting as a “notable headwind” for Bitcoin and the broader market. “Stablecoins serve as a key liquidity conduit within digital assets, and stagnant supply suggests funds are not being redeployed into the crypto market but are instead flowing back into fiat,” Matrixport said.
CryptoQuant data show total stablecoin supply has fallen by about $5.6 billion, from $159.0 billion on Jan. 1 to $153.4 billion currently. Stablecoin reserves at major exchange Binance are also estimated to have declined 19% since November last year.
The correlation between Bitcoin and gold is also weakening. Bitcoin’s 90-day Pearson correlation recently dropped to around -0.75, indicating it has been moving opposite to gold. Ki Young Ju, CEO of CryptoQuant, said “Bitcoin is currently in a phase where it is ‘not digital gold.’”
Tariffs were also cited as a drag. President Trump announced over the weekend a plan to impose a 10% global tariff, and an increase to 15% is also being discussed. As geopolitical uncertainty rises, investors are shifting funds into safe-haven assets such as precious metals, the analysis said.
Ryan Lee, chief analyst at Bitget, said, “Tariff uncertainty, geopolitical tensions, and capital rotation into precious metals and artificial intelligence (AI)-related stocks are thinning crypto liquidity,” adding that “declines in Bitcoin and Ethereum reflect a macro risk-off environment.”
Meanwhile, gold and silver prices are up 19% and 21% year-to-date, respectively, while Bitcoin has fallen about 27%. A preference for safe-haven assets is also being detected in the tokenized real-world assets (RWA) market. Tether Gold (XAUT) has seen its market capitalization rise 20% over the past 30 days to $2.7 billion, while the number of holders increased 33%. The tokenized commodities market surpassed $6.0 billion on the 11th.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
