For Bitcoin to rebound, it requires not only reduced selling pressure, but also new funds to enter the market. However, in the past month, the most important on-chain dollar liquidity pool has been continuously shrinking.
On-chain analytics firm Glassnode reports that as of November 9, the total supply of major stablecoins has decreased by $14.2 billion over the past 30 days, marking the largest single-month decline since June 2022. The Block cited related data indicating that the current total supply has fallen below $280 billion, returning to lows not seen since September 2025.
Meanwhile, the supplies of the two main assets, USDT and USDC, have collectively decreased by nearly $11 billion over the past month. Another set of data from CryptoQuant shows that as of November 7, USDT's market cap has decreased by about $6.6 billion over the past 60 days, a drop that exceeds the level seen during the same period after the FTX incident in 2022.
This set of data reflects a change: the crypto market is losing some of the on-chain dollar liquidity that could originally be used for trading, market making, and purchasing risk assets. 
What does the decrease of $14.2 billion imply?
Stablecoins are often viewed as the "cash" of the crypto market.
Before investing in BTC, ETH, or other tokens, investors tend to first hold assets like USDT or USDC. Stablecoin balances on exchanges can be used for spot purchases, while stablecoins in DeFi can enter lending, liquidity pools, and other financial protocols.
As a result, stablecoin supply is often used to observe the scale of on-chain funds.
When the supply continuously grows, it typically indicates an increase in dollar-denominated assets in the market, and potential purchasing power expands accordingly; conversely, if the supply continues to decline, it indicates that the available stock of stablecoins in the market is shrinking.
The $14.2 billion decrease is particularly noteworthy. Glassnode's data shows that this is the largest 30-day contraction since the bear market of 2022. In comparison, after the collapse of the Terra ecosystem in June 2022, the stablecoin supply experienced a nearly $30 billion monthly drop.
However, a decrease in supply does not mean that all market funds are exiting simultaneously. The total supply of stablecoins measures the circulating supply on-chain and does not directly equal the available balances on exchanges, nor does it represent that every token destroyed corresponds to an investor completely exiting the crypto market.
Simultaneous contraction of USDT and USDC, changes in liquidity pool
This supply decrease is not occurring in a single asset only.
The Block's data shows that USDT and USDC collectively decreased by nearly $11 billion over the past month. CryptoQuant pointed out that as of November 7, USDT's market cap decreased by about $6.6 billion over the past 60 days, more than double the drop of approximately $3.2 billion during the same period in December 2022 after the FTX collapse.
This means that the current contraction is not merely a simple switch of investors between different stablecoins.
From a market structure perspective, USDT still accounts for about 62.8% of the stablecoin supply, while USDC accounts for about 25.1%. Together, they hold a major market share, and changes in their supply will directly impact the scale of the entire on-chain dollar liquidity pool.
However, it is also necessary to note that USDT's 60-day drop cannot be directly summed or compared with the entire market's 30-day drop. Different data institutions have different statistical timing, asset coverage, and calculation criteria.
Why does liquidity pool contraction affect market rebound?
The relationship between stablecoin supply and market price is not a simple one-to-one correspondence, but it does affect the trading conditions in the market.
First, stablecoins are important trading mediums in the spot market. When the available stablecoins in an exchange decrease, the funds that buyers can directly inject into the market may decline, which could also impact spot buying capacity.
Second, stablecoins are also key collateral and liquidity sources in the DeFi market. Lending protocols, DEX liquidity pools, and parts of the derivatives market require stablecoins for financial support. A decrease in supply may put pressure on the funding depth and borrowing scale of certain protocols.
Third, an increase in stablecoin supply typically means more potential purchasing power exists in the market. Even if these funds do not immediately buy BTC or ETH, they can still enter trades quickly when opportunities arise in the market.
Conversely, when stablecoin supply continues to contract, even if short-term selling pressure eases, the market may lack sufficient new funds to drive a sustained rebound.
This is also why Glassnode views a recovery in stablecoin supply as an important signal for new funds re-entering the market.
A decrease in supply does not mean $14.2 billion has completely exited
It is important to differentiate that the decrease in stablecoin supply may stem from various situations.
One scenario is that investors redeem stablecoins from issuers for dollars, removing funds from the on-chain market; another is that institutions reduce their demand for stablecoin issuance, or funds are withdrawn from certain chains and protocols.
Additionally, cross-chain migrations, token destruction and reissuance, as well as changes in asset coverage across different statistical platforms, may also impact supply data.
Therefore, the $14.2 billion decrease cannot be directly explained as $14.2 billion all flowing into bank accounts, nor can it be concluded that the market has entered a stage of comprehensive fund withdrawal.
To assess whether on-chain purchasing power has truly weakened, one needs to observe a combination of exchange stablecoin reserves, spot trading volume, ETF fund flows, DeFi lending scales, and stablecoin issuance and redemption data comprehensively.
The market now needs to wait for a rebound in funds
In the past crypto market rise, the expansion of stablecoin supply provided crucial support for trading and fund allocation. Now, the continuous contraction of major stablecoins indicates that this support is weakening.
For the market, a short-term price rebound and a mid-term funding trend are not the same thing. Short selling cover, leverage liquidation, or some large holders re-entering could drive a temporary price recovery, but if the on-chain dollar liquidity pool continues to shrink, the sustainability of the rebound remains uncertain.
The next steps worth monitoring are: whether the supply of USDT and USDC stops declining, whether exchange stablecoin reserves can rebound, and whether the spot market sees a resurgence of sustained fund inflows.
The contraction of $14.2 billion does not mean that the crypto market has lost its chance for a rebound, but it indicates that the market's funding base is becoming thinner. Whether the next round of increases can be formed depends not only on whether sellers stop selling but also on when new dollar purchasing power returns.
If you are also paying attention to the Crypto market and want to participate in trading or asset allocation, you can register through the following exclusive channels and enjoy discounts:
Binance: Register through the exclusive link and enter invitation code aicoin668 to enjoy a 10% commission rebate.
Registration link: https://jump.do/zh-Hans/xlink-proxy?id=3
Welfare group: https://www.aicoin.com/link/chat?cid=gmLgwvKD1
OKX: Register through AiCoin's exclusive link to enjoy a permanent 20% commission rebate.
Registration link: https://jump.do/zh-Hans/xlink-proxy?id=2
Welfare group: https://aicoin.com/link/chat?cid=l61eM4owQ
Bitget: Register through AiCoin's exclusive channel to enjoy a 10% fee rebate.
Registration link: https://jump.do/zh-Hans/xlink-proxy?id=6
Welfare group: https://aicoin.com/link/chat?cid=N63yYYKQE
You are also welcome to join AiCoin-related communities to get more information on new coins and profit opportunities:
Official Telegram community: https://t.me/aicoin_support
AiCoin Chinese Twitter: https://x.com/AiCoinzh
This article reflects the author's personal views and does not represent the position of this platform. The opinions, conclusions, and suggestions in the article are for reference only and do not constitute any investment advice related to this platform. The market carries risks; investment should be made with caution.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到[email protected]，本平台相关工作人员将会进行核查。
