$10 billion wiped off stablecoin market since May
The stablecoin market has gone through one of its largest pullbacks in years. According to CoinDesk Data, total stablecoin market capitalization fell by $7.7 billion in June, the biggest monthly drop since the Terra-Luna collapse in May 2022.
RWA.xyz data cited by Blockcast shows the market has lost about $10 billion in total circulating value since its peak in May 2026, a decline of roughly 3% and the largest correction since 2023. The report said the drop comes as crypto markets continue to trade near 2026 lows, with on-chain liquidity shrinking at the same time.
USDT and USDC both moved lower
The retreat has been driven mainly by the two largest issuers. Tether’s USDT fell from $190 billion in May to about $184 billion, a decline of around $6 billion. Circle’s USDC dropped from a peak near $80 billion in March 2026 to roughly $73 billion, erasing close to $7 billion.
Stablecoin supply is widely tracked as a gauge of whether capital is entering or leaving the crypto market. Stablecoins remain the main quote currency for digital asset trading, and they have also grown into a larger tool for payments and settlement. When supply expands, that usually points to fresh buying power on-chain. When it contracts, market liquidity tends to weaken.
Short-term contraction contrasts with long-term forecasts
That recent decline stands in contrast to the longer-range outlook from some Wall Street banks. Citi last year raised its base-case forecast for the stablecoin market to $1.9 trillion by 2030, with a bull-case estimate of $4 trillion. Standard Chartered has projected the market will exceed $2 trillion by 2028.
Analysts say this is still far from a 2022-style slump
Blockcast said the current move looks far milder than the crypto winter of 2022. The report pointed to an earlier decline between December 2025 and February 2026, when stablecoin supply also fell by about $9 billion before rebounding quickly to a record high. During that stretch, Bitcoin dropped from about $95,000 to near $60,000.
After doubling in size over two years, the overall stablecoin market has broadly held around $300 billion since Bitcoin reached an all-time high of $126,000 in October last year, according to the report.
The 2022 downturn was much deeper. RWA.xyz data shows the market capitalization of major stablecoins fell from about $166 billion in March 2022 to around $122 billion in September 2023, a decline of more than 26%. That period also saw the collapse of FTX, Celsius, BlockFi and Genesis. TerraUSD (UST) alone erased about $18 billion in stablecoin value.
USDT lost $13 billion in market cap over eight months during that cycle. USDC fell from $55 billion in July 2022 to $24 billion in November 2023, with the failure of Silicon Valley Bank adding pressure.
Paul Howard says the long-term view is unchanged
Wincent senior director Paul Howard said: “We believe stablecoins are a market with strong long-term growth potential, and the recent decline in market capitalization is only a relatively minor pullback. Short-term liquidity fluctuations are a normal feature of the market, but that does not change our view. Stablecoins will continue to play an increasingly important role in the digital asset ecosystem.”
New issuers are gaining ground
Blockcast said the latest slowdown does not necessarily mean demand has disappeared. Market structure is also changing as stablecoin use expands from crypto trading into mainstream payments, while the U.S. GENIUS Act is making regulation clearer.
CoinGecko data cited in the report shows that Global Dollar (USDG), issued by Paxos and backed by institutions including Robinhood, has passed $3.2 billion in circulation. USDGO, issued by Anchorage Digital with support from Hong Kong-listed OSL Group, has nearly doubled to about $900 million. Open USD (OUSD), backed by multiple payments and financial firms, was also identified as a new challenger to USDT and USDC.
Blockcast said the market still treats stablecoin supply growth as a major source of on-chain buying power. With total supply now shrinking, the report said the funding momentum that supports further upside in crypto has weakened.