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▲ Stablecoin ©Dasol Ko
According to investment media FXStreet on July 2 (local time), the supply of yield-bearing stablecoins decreased by over $3.5 billion in the second quarter of 2026, halting the quarterly growth trend that had continued for approximately three years for the first time. While crypto-based yield products contracted, US Treasury-based products continued to grow, indicating clearly diverging trends within the market.
According to a CEX.IO report, the supply of yield-bearing stablecoins decreased by 15% during the second quarter. Ethena's sUSDe saw its supply drop by 52%, a reduction of approximately $2 billion, and Sky's sUSDS also shrank by 16%. In contrast, products based on US Treasury bonds continued to show strength. BlackRock's BUIDL increased by 2%, Circle's USYC by approximately 16%, and Ondo Finance's USDY by over 66%, indicating a shift of funds towards traditional asset-based products.
Amidst this trend, the overall stablecoin market also recorded a quarterly supply decrease for the first time since Q3 2023. The total supply decreased from $315 billion to $312 billion, and the adjusted trading volume also fell by 5.5%. In the first quarter of this year, the supply increased by approximately $8 billion, reaching an all-time high of $315 billion, with yield-bearing stablecoins then considered a major growth driver, but the atmosphere rapidly changed in the second quarter.
Signs of market slowdown appeared from the beginning of the year. In Q1, individual investor-sized transactions decreased by 16%, and automated trading accounted for approximately 76% of the total stablecoin trading volume. In Q2, the total number of transactions decreased by 530 million to 4.48 billion, marking the largest quarterly decrease ever. However, small transfers under $250 increased by 5% to 19.39 billion transactions, indicating that peer-to-peer small payments maintained a relatively robust trend.
The media reported that this contraction in the stablecoin market coincides with a general slowdown in activity across the cryptocurrency market. Institutional data firm Talos cited decreased stablecoin supply, outflows from Bitcoin (BTC) spot ETFs, and a slowdown in corporate Bitcoin purchases as key factors for the demand slowdown in Q2. Tanay Ved, a senior researcher at Talos, explained that if stablecoin supply increases again, new funds will flow into the crypto ecosystem and help restore on-chain liquidity. He added that the best indicator of institutional investor sentiment is Bitcoin spot ETF fund flows, and that ETF funds, corporate Bitcoin purchases, and stablecoin supply tend to move together when market momentum shifts.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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