Bitcoin Drops 14% in Q2 as Stablecoin Supply Falls

Bitcoin traded below $60,000 in the second quarter and fell 14% for the period, while total stablecoin supply slipped to $312 billion, down more than $3 billion from the prior quarter, according to a CEX.IO report. The broader crypto market lost 6.2% in Q2.

Total stablecoin supply fell for the first time since Q3 2023. Stablecoins’ share of overall crypto market capitalization rose to 14% from 13% as total market value declined.

Yield-bearing stablecoins recorded the largest drop. That category lost more than $3.5 billion, a 15% decline in Q2 that reversed a 19% gain in Q1. Ethereum-native assets such as Athena’s sUSDe saw market capitalization shrink by about 52%, erasing nearly $2 billion, while Sky’s sUSDS fell roughly 16%.

Institutional-oriented products gained modestly. Tokenized and treasury-backed offerings showed inflows, with BlackRock’s BUIDL up about 2% and treasury-backed tokens such as USYC and USDY rising 16% and 66%, respectively, in the quarter.

Network-level data showed uneven movement. Stablecoin supply on Ethereum scaling networks fell 24%, a $4.34 billion decline led by Arbitrum, which lost $3.5 billion, a 45% reduction. Ethereum’s base layer recorded an absolute decline of more than $10 billion, the steepest quarterly drop since Q1 2023. By contrast, Tron added $3.4 billion and BNB Chain gained $700 million. HyperEVM’s stablecoin supply rose about 300% to $5.6 billion.

Trading and transfer activity cooled. Total stablecoin trading volume fell 18% to $6.8 trillion. Tether’s USDT volume dropped 24% while Circle’s USDC rose 34%, the only major stablecoin to post absolute trading growth in Q2. USDC’s share of total crypto trading volume reached a record 12.5%. CEX.IO platform data showed USDC accounted for 60% of stablecoin-related operations on the exchange in Q2, up from 58% in the prior quarter.

Transaction counts declined. Total stablecoin transfers fell to 4.48 billion in Q2, down 530 million from Q1, the largest absolute quarterly decline on record. After removing bot and non-economic transfers, adjusted transaction counts fell to 613 million, a decline of about 11 million. Adjusted transfer volume dropped 5.5% to $4.09 trillion, ending a streak of 10 consecutive quarterly increases. Transfers below $250 rose 5% to $19.39 billion.

Regulatory changes affected liquidity patterns. The European Union’s Markets in Crypto-Assets transition period ended on July 1, requiring providers to operate under the bloc’s authorization regime or stop serving EU clients, a shift that reduced USDT support on some regulated European venues and expanded room for USDC. In the United States, draft legislation such as the GENIUS Act would set reserve, redemption and supervision standards for stablecoin issuers, and the CLARITY Act would address broader market structure issues, though legislative progress is unresolved.

Traditional financial firms continued stablecoin initiatives. Companies including SoFi and MoneyGram have announced stablecoin plans, and Japan’s largest banks have advanced work on a yen-pegged token. The report notes stablecoin supply previously took about a year to return to sustained growth after the 2022–2023 downturn and that the current market includes a broader mix of payment, institutional and real-world-asset use cases.