Stablecoin supply has continued to shrink over the past week, coinciding with Bitcoin’s extended drop that began two weeks ago.
Bitcoin is up 1.4% on the day to $88,500 but remains down 4.2% on the week.
“Normally, when traders sell Bitcoin or altcoins, that money stays in crypto as stablecoins. A falling stablecoin market cap shows that many investors are cashing out to fiat instead of preparing to buy dips,” Santiment added.
What’s driving capital outflows?Two primary forces are at work: Bitcoin’s historical performance during macro stress and a classic flight to a more established safe haven, gold.
The current downtrend from the October all-time high, driven by shifting geopolitics and policy uncertainty, is “consistent with that pattern,” he said.
Bitcoin, in contrast, remains sidelined.
“High volatility makes it difficult to absorb such large-scale safe-haven demand,” Sun said. The asset’s investor base compounds the issue, as global wealth is concentrated in individuals over 50 whose trust in gold has been validated through repeated crises.
For them, Sun said, Bitcoin“may still be perceived as a high-risk tech asset or a game for younger generations.”
