Stablecoin supply drops $6.7 billion as Bitcoin falls below $75,000

Stablecoin supply contracted by $6.7 billion in the week to 8 November, the sharpest weekly decline reported in 2026. Bitcoin fell below $75,000 on 6 November, while altcoins shed approximately $200 billion in market value and about 70% traded below their 200-day moving averages.

These measures capture different parts of the market: dollar-denominated tokens used for settlement and trading, the benchmark cryptoasset and the breadth of weakness beyond Bitcoin. Their alignment during the latest week indicates that the aftermath of the Binance breach has developed into a wider reduction in risk appetite. Binance replaced most of the stolen assets and reopened withdrawals, but that recapitalisation did not coincide with a durable recovery in prices or stablecoin balances.

A short squeeze failed to establish a price floor

Bitcoin’s path through the week shows why sharp rebounds need to be separated from sustained demand. The asset recovered from below $76,000 to approximately $81,000 on 4 November, liquidating more than $380 million of short positions within an hour. Closing a leveraged short requires the trader or exchange to buy the asset, so forced covering can amplify a rally without equivalent new spot demand.

Two days later, Bitcoin traded below $75,000 even as technology shares recovered. Investors were subsequently reported to have realised about $2 billion of losses. Large traders on Hyperliquid had also increased Bitcoin shorts to their highest level since October 2025 by 7 November. That positioning covers one venue and a narrow group of accounts, so it cannot describe the entire market, but it is consistent with demand for downside protection after the brief rally.

The sequence differs from an orderly repricing in which buyers establish support after an initial decline. Bitcoin instead moved through a seven-week low, a liquidation-assisted rebound and a new break below $75,000 within three days. Rising options activity alongside weaker October trading volumes provides another indication that participants are paying to transfer or hedge risk rather than simply adding directional exposure.

Redemptions and freezes have different liquidity effects

The stablecoin contraction gives the price decline a balance-sheet dimension. Circle was reported to have redeemed approximately $11.7 billion of USDC by 31 October, reducing its supply to $70 billion. The subsequent $6.7 billion fall in aggregate stablecoin supply suggests that the contraction continued into the latest week, although differences in reporting periods and movements between issuers prevent the two figures from being directly combined.

Stablecoins are commonly issued when users or intermediaries provide fiat currency and redeemed when tokens are returned for cash. A net decline therefore leaves fewer dollar tokens circulating across exchanges, trading pairs and blockchain applications. It does not prove that the full amount left crypto markets permanently: holders can move between issuers, retain fiat at an exchange or return later. Stablecoins also support payments and transfers unrelated to speculative buying.

The supply decline must also be distinguished from the assets frozen after the Binance theft. Tether said it immobilised more than $1.5 billion linked to the incident, while Circle reportedly froze more than $800 million of USDC. A freeze prevents identified tokens from moving but does not necessarily remove them from reported supply. Redemptions reduce the outstanding stock; freezes restrict the usability of particular balances. Both can affect available settlement liquidity through different mechanisms.

This distinction matters because a smaller stablecoin base can make recovery more dependent on new fiat deposits or the redeployment of balances already held at venues. The latest evidence does not establish a market-wide shortage of dollars, which would require order-book and funding data across exchanges. It does show that the pool of tokenised dollars contracted while cryptoasset prices and market breadth weakened.

Altcoin breadth confirms a broad revaluation

Approximately 70% of altcoins falling below their 200-day moving averages indicates that weakness extended beyond a handful of large assets. The moving average is a lagging measure rather than a forecast, but the proportion provides a useful breadth indicator: most measured assets were trading below their longer-term price trend at the same time.

The reported $200 billion decline in altcoin market value should not be interpreted as $200 billion being withdrawn. Market capitalisation multiplies token supply by the latest traded price, so relatively small transactions can revalue a much larger stock of assets. The figure nevertheless shows that the deterioration was distributed widely enough to erase a substantial amount of quoted value.

Network activity has not provided consistent price support. XRP active accounts reportedly increased 132% over the month to 36,342 even as the token’s price declined. That divergence is a reminder that account creation or transaction activity can rise because of transfers, operational changes or speculative turnover without producing net buying pressure.

Miners are redirecting Bitcoin into data centres

Corporate sellers add a separate consideration. Riot Platforms reported selling 10,599 Bitcoin during the third quarter for approximately $1.5 billion, reducing its reserves by nearly 79% to 2,418 Bitcoin. The proceeds were directed towards data-centre expansion. Core Scientific, meanwhile, said colocation generated 92% of its revenue and announced plans to cease Bitcoin mining by year-end.

The two actions have different market effects. Riot’s sale placed existing Bitcoin back into circulation, while Core Scientific’s withdrawal from mining would reduce its future production and associated operating sales. There is no evidence that either decision caused the latest price decline. They do show that some mining companies now compare the returns from holding or producing Bitcoin with the capital requirements and contracted revenues available from data-centre services.

Selective institutional buyers remain. Strive reported Bitcoin holdings worth $3.25 billion, and Kazakhstan allocated $100 million to crypto funds including Brevan Howard Digital. Those commitments are concentrated decisions rather than evidence of market-wide inflows, while a proposed US rule for cryptocurrency exposure in 401(k) retirement plans remains under review and has not yet created investable flows.

The immediate test is whether aggregate stablecoin supply stabilises after the post-Binance withdrawal wave. A renewed increase accompanied by more altcoins recovering their 200-day averages would indicate broader capital returning; another weekly contraction while Bitcoin rebounds remain dependent on short liquidations would leave exchanges, asset holders and corporate sellers operating against a smaller tokenised-dollar base. Riot’s next reserve disclosure and Core Scientific’s planned year-end mining exit will provide additional evidence on whether miner disposals continue alongside that contraction.