According to the crypto analytics platform, the $2.24 billion decline in the total stablecoin market capitalization over the past 10 days could signal that capital is leaving the cryptocurrency ecosystem and could delay the market’s recovery.
In a post to X on Monday, Santiment he said much of that capital turned into time-honored sheltered havens like gold and silver, pushing them to up-to-date highs, while Bitcoin (BTC), the broader cryptocurrency market and stablecoins, rebounded.
“The declining market capitalization of stablecoins shows that many investors are investing in fiat rather than preparing to buy on the dip,” Santiment said, adding that rising demand for gold and silver suggests that “investors are choosing safety over risk.”
“When uncertainty increases, money often flows into assets that are seen as stores of value during economic stress, rather than volatile markets like cryptocurrencies.”
Gold and silver have overtaken Bitcoin in recent months
Bitcoin performed well in 2025 until October 10, 2025, when over $19 billion worth of leveraged crypto positions were flushed from the ecosystem and Bitcoin’s price dropped from around $121,500 to less than $103,000 in a single day.
Since then, the price of Bitcoin has fallen to $88,080, while the price of gold has increased by more than 20%, breaking the $5,000 barrier, and the market value of silver has more than doubled.
The stablecoin issuer, Tether, has been one of the largest buyers of gold in recent months, purchasing 27 metric tons worth $4.4 billion in the fourth quarter of 2025 alone.
Related: The digital gold rally reflects increasing pressure on the US dollar
The growing supply of stablecoins could signal a market rebound
Santiment stated that a recovery in the cryptocurrency market may require stablecoins to grow first:
“Historically, a strong recovery in the cryptocurrency market usually begins when the market capitalization of stablecoins stops falling and begins to rise again. This would represent the entry of fresh capital into the ecosystem and renewed investor confidence.”
Until there is an boost in the number of stablecoins, smaller, riskier crypto assets – altcoins – will continue to suffer significantly greater losses than Bitcoin.
“Bitcoin often outperforms altcoins in these environments, but reduced stablecoin supply continues to limit growth across the market,” Santiment added.
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