Quick Breakdown
- USDC market cap dropped sharply from ~$78B peak to $71.5B, with $6.5B in net redemptions over the past six weeks, while Tether’s USDT kept climbing to $186.5B.
- The expected GENIUS Act would ban interest payments on stablecoins, pushing investors toward yield-bearing alternatives like tokenized money market funds and causing liquidity to tighten.
- Capital is shifting from stablecoins to gold/silver; Circle is pivoting from market cap focus to real transaction usage via Circle Payment Network and partnerships like Intuit.
Stablecoin supply is quietly contracting, and a fresh chart from independent analyst Markus Thielen highlights the trend. Tether’s USDT market cap has climbed steadily to around $186.5 billion, while Circle’s USDC peaked near $78 billion before dropping sharply to $71.5 billion in recent weeks. The divergence is clear: USDT keeps growing, but USDC is bleeding out fast.
The chart tracks both from August 2024 through early February 2026. USDT (black line, left axis) rose smoothly from about $113 billion to $186.5 billion. USDC (blue line, right axis) surged from the low $30s to $78 billion by late 2025, then reversed hard, shedding roughly $6.5 billion in net redemptions over just the past six weeks.
📊Today’s #Matrixport Daily Chart – January 28, 2026 ⬇️
Is Stablecoin Liquidity Quietly Disappearing?#Matrixport #Stablecoins #CryptoLiquidity #USDC #USDT #GENIUSAct #Circle #DigitalAssets pic.twitter.com/wrtanc7fQQ
— Matrixport Official (@Matrixport_EN) January 28, 2026
Regulatory pressure hits yield-bearing stablecoins
Thielen points to the expected GENIUS Act as a big driver. The proposed law would ban stablecoin issuers from paying interest to holders. That removes one of the main reasons people park money in regulated options like USDC, especially when tokenized money market funds and other yield-bearing alternatives still offer returns. Investors are pulling out, and the shift is directly hurting stablecoin liquidity overall.
Capital flows to gold, circle pivots to real usage
At the same time, money is rotating out of stablecoins and into traditional safe havens like gold and silver. That further squeezes the available supply of dollars sitting in crypto ecosystems, weakening near-term buying power for the broader market. In response, Circle is changing its tune. Instead of chasing headline market cap numbers, the company is focusing on transaction velocity and real-world adoption, pushing initiatives such as the Circle Payment Network and partnerships with firms like Intuit to increase USDC use in everyday payments and business flows.
Previously, Matrixport noted that Bitcoin’ market sentiment showed early signs of stabilization, with downside risk gradually fading. The Matrixport analysis emphasizes that these conditions do not imply an immediate recovery to record levels.
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