Stablecoin Slump and Tariffs Weigh on Bitcoin as Liquidity Thins
News
Shrinking liquidity across digital asset markets is weighing on valuations as investors pivot toward safe-haven assets amid elevated global trade uncertainty, according to market analysts.
Matrixport said a flatlining stablecoin float is a “notable headwind” for Bitcoin (BTC) and the wider crypto sector. “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,” the firm stated in a Tuesday post on X.
The aggregate stablecoin supply has declined by $5.6 billion year-to-date, from $159 billion on Jan. 1 to $153.4 billion as of Tuesday, according to CryptoQuant data. Stablecoin reserves on Binance have also fallen by 19% since November 2025, earlier reports showed.
All ERC-20 stablecoins, total supply, year-to-date chart. Source: CryptoQuant
CryptoQuant: Bitcoin’s short-term correlation with gold turns negative
Bitcoin appears to be decoupling from gold in the near term. BTC’s 90-day Pearson correlation with the metal has flipped negative, hovering near -0.75, per CryptoQuant. The Pearson metric gauges the co-movement of returns over a period, where -1 indicates a perfectly inverse relationship. “Bitcoin is in a ‘not digital gold’ period,” said Ki Young Ju, CryptoQuant’s founder and CEO, in a Tuesday X post.
Source: Ki Young Ju
Analyst: Tariff risk and rotation into precious metals are drainingcrypto liquidity
Uncertainty around trade policy has intensified after U.S. President Donald Trump announced a global tariff plan on Saturday, with a 10% rate taking effect and a potential increase to 15% under discussion.
Ryan Lee, chief analyst at crypto exchange Bitget, said tariff concerns are accelerating a shift from crypto into precious metals. The resulting risk-off tone is capping digital asset upside as they compete with defensive and growth exposures. “The ongoing slide in Bitcoin and Ethereum reflects a broader risk-off macro backdrop, where tariff uncertainty, geopolitical tensions, and capital rotation into precious metals and AI-linked equities have thinned crypto liquidity and weakened narratives,” the analyst said. He added that a sustained rebound may depend on “recovery catalysts” such as clearer U.S. policy or more “constructive” Federal Reserve signals on interest rate cuts.
Market performance reflects the shift: gold and silver are up 19% and 21% year-to-date, respectively, while Bitcoin has declined 27%, according to TradingView data.
Tokenized real-world assets also show a move toward safe havens. Tether Gold (XAUT) rose 20% to $2.7 billion in the past 30 days, while the number of holders increased by 33%, according to RWA.xyz. The tokenized commodities market surpassed $6 billion on Feb. 11, marking a 53% increase in less than six weeks as more gold exposure migrated on-chain.
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