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EURC The market value of the stablecoin market has shrunk to about US$300 billion.
Cryptocurrency trading firm Cumberland said that the market value of the stablecoin market has dropped to about US$300 billion, the third largest decline in the history of the industry, but there is little evidence of a run on the dollar-denominated top stablecoin.
Cumberland said on Sunday that the market value of stablecoins fell to about $305 billion from about $321 billion on May 20, a drop of about 5%. Independent real-time data from DefiLlama shows that the total market value of stablecoins was even lower on August 16, at approximately US$300.76 billion, of which Tether's USDT accounted for 60.84% of the total market. The difference between the two data stems from differences in statistical caliber and time points.
The reason why this contraction is remarkable is that it has not been accompanied by the severe price fluctuations that occurred when stablecoins contracted in the past.
The shrinking of stablecoins has not triggered large-scale decoupling
According to Cumberland data, during the current shrinking process, USDT trading prices are mostly between US$0.9988 and US$0.9992, while Circle's USDC usually remains above US$0.9997. For digital assets anchored to the dollar, these discounts are small and far less volatile than the level of previous crises.
This makes the current decline fundamentally different from the stablecoin turmoil that began in 2022.
The collapse of TerraUSD (UST) wiped out the token's market value of approximately $16 billion, and the USDT also faced massive redemption pressure. During the U.S. banking crisis in early 2023, Circle deposited some of its reserves here after the collapse of Silicon Valley Bank, and the USDC suffered a temporary impact. Cumberland said that the 2022 round of shrinking stablecoins eventually lasted for more than a year.
A contraction in 2019 was also accompanied by obvious USDT pressure. The token once fell below US$0.96 and remained below US$0.99 for a long time.
And this time, the anchored price remained stable.
Cumberland said that the current pattern points to an orderly withdrawal of funds from the crypto market, rather than a loss of confidence in the USDT or USDC itself.
Money is flowing, rather than necessarily leaving the blockchain
Another trend complicates the situation.
Despite the decline in the market value of traditional stablecoins, Cumberland said that the size of cash equivalents in the income-based chain has increased by 101% since the beginning of 2026. Such products allow users to hold assets and earn revenue on the blockchain network, rather than holding standard stablecoins, which are mainly used for trading and settlement.
Non-US dollar stablecoins are also growing. Its total market value has risen to more than $1.5 billion from about $1.3 billion at the beginning of the year, while Circle's euro-backed EURC has increased from $658 million to about $756 million, according to Cumberland.
This shift suggests that the recent shrinkage of stablecoins is not another run on crypto banks.
Instead, as demand for traditional crypto transactions wanes and investors turn to income, tokenized financial assets and other uses for blockchain cash, capital is flowing between different forms of digital assets.
As the overall market value of stablecoins hovers around US$300 billion, the next signal may not come from whether USDT or USDC can hold 1 dollar, but whether the tens of billions of dollars flowing out of traditional stablecoins will eventually flow back.
