The combined market capitalization of major stablecoins fell from roughly $166 billion in March 2022 to $122 billion by September 2023, RWA.xyz data shows — a decline of over 26% as investors pulled money from the digital asset market.

Tether’s USDT fell from $78 billion to $65 billion between March and November 2022. For USDC, the downtrend took much longer to play out, falling from $55 billion in July 2022 to below $24 billion by November 2023, exacerbated by its banking partner Silicon Valley Bank’s collapse in 2023 March.

The implosion of TerraUSD, the algorithmic stablecoin of the Terra-Luna crypto project, also wiped out $18 billion from the stablecoin market.

The current decline is only a temporary setback in a long-term uptrend,…