Stablecoin Market Cap Down More Than $10 Billion From May Peak, Not Seen as Threat to Long-Term Growth
Forecast Trend Report by Period
The total market capitalization of stablecoins has fallen by more than $10 billion from its May peak, marking the steepest drop since 2023.
CoinDesk reported on July 12 that the stablecoin market lost $7.7 billion in June alone, the largest monthly decline since the Terra-Luna collapse in May 2022. Data from RWA.xyz shows the market is down about 3% from its May high, a much smaller pullback than the 26% slump recorded in 2022.
The retreat was driven by the two largest issuers. Tether’s USDT market capitalization fell by $6 billion, from $190 billion in May to about $184 billion currently. Circle’s USDC dropped by $7 billion, from its March 2026 peak of $80 billion to $73 billion.
The decline diverges from growth forecasts by major Wall Street banks. Citi last year raised its base-case projection for the stablecoin market in 2030 to $1.9 trillion and its bullish-case estimate to $4 trillion. Standard Chartered projects the market will reach $2 trillion by 2028.
Falling stablecoin supply is also closely watched as a liquidity gauge for the broader crypto market. Because stablecoins serve as the base currency for digital-asset trading, a contraction in supply can curb buying capacity across the market.
Some market participants, however, do not view the latest decline as a structural crisis. Stablecoin supply also shrank by about $9 billion between December 2025 and February 2026 before later climbing to a record high. During that period, Bitcoin fell from $95,000 to the $60,000 range.
Paul Howard, senior director at trading firm Wincent, said the recent decline in stablecoin market capitalization was a relatively modest correction within a market with long-term growth prospects. He added that short-term liquidity swings are normal and that the outlook for stablecoins to play an increasingly important role in the digital-asset ecosystem remains unchanged.
Competition within the market is also shifting. After passage of the GENIUS Act, a US stablecoin bill, new issuers entered the market. Global Dollar, or USDG, issued by Paxos and backed by a consortium that includes Robinhood, has surpassed $3.2 billion in circulation. USDGO, issued by Anchorage Digital and Hong Kong’s OSL Group, has nearly doubled to $900 million.
