Stablecoin outflows signal capital exit

Stablecoin supply fell by about $2.24 billion over the past 10 days as Bitcoin (CRYPTO:BTC) slid from around $95,000 to near $88,000, signalling capital is leaving crypto rather than waiting to buy the dip.

The combined market capitalisation of the top 12 stablecoins has dropped by roughly $2.24 billion, tracking Bitcoin’s decline, according to on-chain analytics firm Santiment.

“Normally, when traders sell Bitcoin or altcoins, that money stays in crypto as stablecoins,”

Santiment said, adding that falling stablecoin market capitalisation shows investors are cashing out to fiat instead.

Risk appetite remains muted, with Bitcoin derivatives open interest stuck in a narrow range and capital instead flowing toward gold as a traditional safe haven.

The outflows have coincided with Bitcoin’s extended downturn over the past two weeks, even as the asset remains marginally higher on the day but lower on the week.

Bitcoin tends to underperform during periods of macroeconomic stress, a pattern that pushes investors toward gold, which has climbed to fresh record highs, market participants say.

“High volatility makes it difficult to absorb such large-scale safe-haven demand,”

Tim Sun, senior researcher at HashKey Group, said, noting older investors continue to favour gold over digital assets.

At the time of reporting, Bitcoin price was $88,380.48.