Stablecoin market cap drops as traders rotate to gold, Santiment says

Stablecoins usually act like dry powder in crypto. When their combined market value rises, it often means fresh cash is waiting on the sidelines. When it shrinks, the message is simpler: money is leaving the room.

That’s what Santiment pointed to this week. The analytics firm said total stablecoin market capitalization slid about $2.24 billion over the past 10 days. In Santiment’s reading, investors aren’t stocking up on stablecoins to “buy the dip.” They’re moving back to fiat and, increasingly, to old-school shelters like gold and silver.

The split has been obvious on price charts. Bitcoin’s big run in 2025 hit a wall after the Oct. 10 wipeout that flushed more than $19 billion in leveraged positions. BTC dropped from roughly $121,500 to below $103,000 in a day and has since drifted down to around $88,080, struggling to reclaim $90,000. Metals have told the opposite story. Gold has climbed more than 20% since then, pushing above $5,000, and silver’s market value has surged.

Even parts of crypto’s plumbing are leaning into the move. The report noted that Tether has been among the buyers of physical gold recently, including a purchase of 27 metric tons valued at about $4.4 billion in the fourth quarter of 2025.

Santiment’s main takeaway wasn’t “Bitcoin is dead.” It was about timing. Strong recoveries, the firm argued, tend to start only after stablecoin market caps stop falling and begin to expand again. That shift signals new capital entering the ecosystem and a return of risk appetite.

For traders, the tell is simple to track: stablecoin supply and issuance. If USDT and USDC supply start trending higher again, it can mean cash is rotating back into crypto rather than sitting in bank accounts or chasing metal rallies.

Until that happens, the damage usually shows up first in smaller coins. Bitcoin can hold up better than most altcoins in a risk-off stretch, but a shrinking stablecoin base still caps the upside for the whole market.