USDC and USDT cash outflows trigger market concerns; Bitcoin's rise may be hindered

January 27 News, as the cryptocurrency market experiences cash outflows, the market capitalization of top stablecoins continues to shrink, and Bitcoin (BTC) recently faces pressure to rebound. Data from CoinDesk shows that the combined market cap of Tether (USDT) and USD Coin (USDC) has fallen to $257.9 billion, the lowest since November 20, 2025, after approaching $265 billion in mid-December. Over the past ten days, USDC’s market cap has decreased by more than $4 billion, with a total decline of $6 billion since mid-December, down to $716.5 billion; during the same period, USDT’s market cap has decreased by about $1 billion, to $1,862.5 billion.

Analysts point out that the decline in stablecoin market cap reflects traders withdrawing funds from the crypto market rather than waiting on the sidelines or buying the dip. Blockchain analytics firm Santiment stated on X platform, “Stablecoins are the main liquidity source for purchasing cryptocurrencies. When supply decreases, the funds available to quickly push prices higher will also diminish, potentially weakening or slowing the rebound of Bitcoin and other cryptocurrencies.”

Currently, Bitcoin’s price has rebounded from the weekend low of $86,000 to nearly $89,000, but the decline in stablecoin supply still poses a short-term resistance to price movement. Market observers believe this trend is closely related to US investors’ dissatisfaction with the slow progress of the USD Coin issuer Circle Internet Financial and the Clarity Act. The bill aims to regulate dollar-pegged cryptocurrencies and is still in the Senate stage, while some Republican lawmakers are prioritizing other legislation ahead of the midterm elections, weakening the recent market expectations for regulatory positive news.

Aurelie Barthere, Chief Research Analyst at Nansen, said in an interview that the passage of the Clarity Act could serve as an important catalyst for market rallies, and a rebound in stablecoin market cap is expected to inject new liquidity into Bitcoin and the entire crypto market. Overall, in the short term, the crypto market needs to monitor stablecoin supply and policy developments, as these will directly impact the sustainability of Bitcoin’s rebound and market sentiment.