Crypto Market Sees Sharp Declines as Stablecoin Supply Stalls

The crypto market is facing a perfect storm of challenges, from a decline in stablecoin supply to rising global trade tensions and controversy in the health sector. According to data, the total stablecoin market cap has stalled at around $307.92 billion, down 1.13% in the past 30 days. This decline has led to a decrease in Bitcoin liquidity, resulting in sharper price moves and bigger wicks.

Stablecoins, which function as crypto's closest proxy for deployable dollars, play a crucial role in facilitating risk-taking and unwinding in the market. When the stablecoin supply expands, it makes it easier to finance and unwind risk-taking, but when it stalls or shrinks, price moves can travel farther and faster. The current decline in stablecoin supply has created a challenging environment for Bitcoin, with liquidity drying up and sharp price declines becoming more common.

Meanwhile, global trade tensions are on the rise, with President Donald Trump announcing a 10% global tariff following a Supreme Court ruling. This move is likely to have far-reaching consequences for the global economy, including the crypto market.

In another development, the National Institutes of Health (NIH) is facing criticism over its leadership, with its controversial director, Jay Bhattacharya, taking over as acting director of the Centers for Disease Control and Prevention (CDC). This move has drawn swift criticism from researchers and public health experts, who are concerned about the potential impact on public health policy.

In the world of Bitcoin development, a new design called Cluster Mempool is being implemented to improve the organization and management of the mempool, a giant set of pending transactions that nodes need to keep track of. The design aims to simplify the overall architecture, better align transaction sorting logic with miner incentives, and improve security for second-layer protocols.

Finally, data from Arrakis Finance shows that new tokens struggled to find a floor in 2025, with early trading dynamics often setting a trajectory that proved hard to reverse as the year wore on. The data found that about 85% of tokens launched last year finished below their initial price, and only 9.4% of tokens that declined in the first week after token generation events (TGE) ever recovered to their launch price at any point later in the year.

Overall, the crypto market is facing a challenging environment, with declining stablecoin supply, rising global trade tensions, and controversy in the health sector all contributing to sharp price declines and decreased liquidity. As the market navigates these challenges, it will be important to keep a close eye on developments in the stablecoin market, global trade policy, and the world of Bitcoin development.

Sources:
* Crypto has a native version of the M2 money supply that’s falling and killing Bitcoin liquidity
* Trump announces 10% global tariff following SCOTUS ruling
* With NIH in chaos, its controversial director is taking over CDC, too
* The Core Issue: Cluster Mempool, Problems Are Easier In Chunks
* Only 1 in 10 Weak Token Launches Recovered in 2025: Arrakis