The supply of Tether (USDT) stablecoin sharply decreased in June, reflecting a decrease in liquidity in the crypto market. A report from the cryptocurrency custody provider Copper showed that as of June 24, the supply of stablecoins had grown by less than 1.5% compared to a significant decrease of over 5% in April and May. Fadi Aboualfa, research director at Copper, stated, “This indicates that liquidity entering the cryptocurrency market is decreasing as Bitcoin and Ethereum face downward pressure, and hopes for a significant rebound in the short term for altcoins remain bleak.”
Tether’s trading volume plummeted from a historical high of $767.2 billion on March 11 to $53.5 billion on June 24. While the market cap of USDT is $113 billion, the slowdown in the growth of USDT supply indicates a decrease in funds flowing into the cryptocurrency market.
According to Copper’s analysis, there has been a significant outflow of funds from the Bitcoin market, with over $540 million leaving the market last week. Over the past 30 days, the price of Bitcoin has fallen by over 10%, from about $68,000 to around $62,000 at the time of writing. Aboualfa explained, “As the market focuses on ETF dynamics, the price of Bitcoin follows a unified path with these flows. Although this is not a measure of bullish demand, it indicates whether investors are less keen on selling Bitcoin at a discount, even if they anticipate a crash.”
Since the trading of Exchange-Traded Funds (ETFs) began in January, the price of BTC has risen by 37%. Aboualfa stated, “Relative to the holdings, Bitcoin is still within acceptable low and high points of trading, indicating downward pressure.”
Market Macro Outlook
The cryptocurrency market is facing pressure from the macroeconomic situation. A report from ETC Group on June 25 indicated that traditional financial markets have begun “pricing in” global growth expectations. “A key factor in the downward revision of global economic growth expectations is that US economic data has consistently disappointed relative to expectations,” the analysis stated. The report pointed out that the Bloomberg US Economic Surprise Index, which measures the difference between actual macroeconomic data and forecast data, has dropped to its lowest level since 2019. “This decline indicates a general recognition that the macroeconomic environment is deteriorating,” the report stated. ETC Group expressed that the continued downward revision of global growth forecasts, combined with the increasing risk of a US economic recession, may continue to pose challenges to the price of Bitcoin.