June has seen a sharp drop in the supply growth of Tether ( USDT ) stablecoin, reflecting a reduction in liquidity in crypto markets. 

A report by crypto custodian Copper shows the stablecoin month-on-month supply grew less than 1.5% as of June 24, a considerable drop from over 5% seen in April and May. According to Copper’s head of research, Fadi Aboualfa:

“This indicates that less liquidity is moving into crypto markets as Bitcoin and Ethereum face downward pressures, and altcoins remain far behind with little hope of any significant rally in the short term.”

Tether’s trading volume plummeted from its all-time highs on March 11, when USDT trading activity peaked at $767.22 billion, to $53.55 billion on June 24. With a market cap of $113 billion, slower growth in USDT’s supply suggests that less money is flowing into the cryptocurrency markets.

Tether’s slowdown in supply points to cooling crypto activity image 0 USDT Circulating Supply. Source: Glassnode

Bitcoin markets have experienced substantial daily outflows lately, with more than $540 million leaving the market last week, according to Copper analysis. Over the past 30 days, Bitcoin ( BTC ) price has declined more than 10%, from around $68,000 to roughly $62,000 at the time of writing. Aboualfa explains:

“As markets focus on ETF dynamics, Bitcoin’s price is following a uniform path relative to these flows. Although this is not a measure of bullish demand, it indicates whether investors are less enthusiastic about offloading their Bitcoin at a discount, even if they anticipate a crash.”

Since exchange-traded funds (ETFs) began trading in January, the price of BTC has increased by 37%. “Bitcoin is still trading within an acceptable low and high relative to holdings, indicating room for downward pressure,” said Aboualfa.

Markets macro outlook

Crypto markets are under pressure from the macroeconomic landscape. A June 25 report by ETC Group indicates that traditional financial markets have started to “price out” global growth expectations.

“A key factor in the downward revision of global growth expectations is the consistent disappointment in U.S. economic data relative to forecasts,” reads the analysis.

The Bloomberg US ECO Surprise Index, which measures the differences between actual macroeconomic data and forecasted figures, has dropped to its lowest level since 2019, the report states. “This decline signifies a widespread acknowledgment of the worsening macroeconomic environment.”

According to ETC Group, the ongoing downward in global growth forecasts, coupled with rising recession risks in the United States, could continue to be a challenge for Bitcoin's price.

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