Stablecoin stagnation, tariffs a headwind for Bitcoin prices, analysts say

Tariff shocks led to a capital rotation from crypto into precious metals and tokenized commodities, as analysts warn that the thin crypto market liquidity is limiting a wider recovery.

Shrinking crypto market liquidity is a concerning sign for crypto asset valuations, as investors gravitate towards safe-haven assets like precious metals amid growing global trade uncertainty.

The stagnating stablecoin supply is presenting a “notable headwind” for Bitcoin (BTC) and the broader crypto ecosystem, according to Matrixport. “Stablecoins serve as the primary liquidity rail within digital assets and stagnation in supply often signals that capital is being off-ramped back into fiat rather than redeployed within crypto markets,” said the digital asset platform in a Tuesday X post. 

The stablecoin supply has fallen by $5.6 billion year-to-date, from $159 billion on Jan. 1, to $153.4 billon on Tuesday, according to analytics platform CryptoQuant. Stablecoin reserves on the leading crypto exchange, Binance, also shrank by 19% since November 2025, Cointelegraph reported earlier on Tuesday.

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