Stablecoins Shed $10B Since May — But One Analyst Says Don't Hit the Fire Alarm 🚨

The stablecoin market contracted by roughly $10 billion from its May peak, including a $7.7 billion decline in June alone, the largest single-month drop in dollar terms since the May 2022 collapse of Terra-Luna, according to CoinDesk Data. Total stablecoin capitalization now sits about 3% below its May high, per RWA.xyz data, a modest pullback by historical standards and far smaller than the 26% contraction seen during the 2022 crypto winter.

The decline has been concentrated in the two largest issuers. Tether's USDT has fallen to roughly $184 billion from $190 billion in May, a drop of about $6 billion, while Circle's USDC has slid to around $73 billion from its March 2026 peak of just shy of $80 billion, shedding about $7 billion. CoinDesk Data shows the supply contraction coincides with crypto markets consolidating near 2026 lows and onchain liquidity thinning out across major venues.

The pullback runs counter to bullish projections from major banks. Citi raised its 2030 stablecoin growth forecast last year to $1.9 trillion in a base case and $4 trillion in a bull case, up from $1.6 trillion and $3.7 trillion, respectively. Standard Chartered has projected a $2 trillion market by 2028.

One analyst said there is no reason to panic, noting that a similar $9 billion drawdown between December 2025 and February 2026 was followed by a recovery to fresh records, and that stablecoins are likely to resume their long-term growth trajectory. Stablecoins serve as the primary quote currency for crypto trading and are increasingly used in payments and settlement, making shifts in their supply a closely watched gauge of liquidity conditions across digital assets.