Adjusted stablecoin transaction volume reached a record $1.79 trillion in June, according to Visa Onchain Analytics, up 63% from May’s $1.10 trillion and 125% higher than a year earlier. Across the same four weeks, the total pool of stablecoins in circulation shrank by $7.7 billion, the largest monthly dollar decline since the TerraUSD collapse in May 2022.

The market has been treating that record volume as confirmation that money is pouring into crypto, but a closer look at the data tells us that it’s a much, much more complicated market than that. While usage reached an all-time high, the cash base underlying it contracted, meaning the same dollars are turning over faster in a shrinking pool.

This isn’t good news for the market….