The global cryptocurrency market has lost more than half its value in nine months. Total market capitalization fell to $2.1 trillion at the end of the second quarter from a peak of $4.4 trillion in October 2025.
The decline came as institutional money continued to flow out of U.S. spot exchange-traded funds, while the market capitalization of stablecoins, widely viewed as a pool of capital waiting on the sidelines, also contracted.
According to CoinGecko's 2026 Q2 Crypto Industry Report, released July 20, the total cryptocurrency market capitalization stood at $2.1 trillion at the end of the second quarter. It fell 12.6%, or $304.8 billion, from the previous quarter.
The market declined for a third consecutive quarter from the fourth quarter of 2025. Its value at the end of June was the lowest since September 2024.
The downturn began in October 2025. The cryptocurrency market reached an all-time high of $4.4 trillion early that month, but fell sharply after the United States announced plans to impose an additional 100% tariff on imports from China.
More than $19 billion in leveraged positions were liquidated in a single day following the announcement.
During the fourth quarter, the market lost 23.7%, or $946 billion, and ended the period at about $3 trillion.
The weakness continued in the first quarter of 2026. Total market capitalization fell 20.4%, or $622 billion, to $2.4 trillion.
The decline was attributed to concerns about the U.S. Federal Reserve's hawkish policy stance, weakness in technology stocks and geopolitical uncertainty surrounding tensions between the United States and Iran.
Average daily trading volume in the first quarter also fell 27.2% from the previous quarter to $117.8 billion.
The market rebounded in April, but its upward momentum weakened beginning in May. The sharpest correction of the quarter occurred in June amid ETF outflows, concerns that U.S. interest rates would remain high for longer, shifting U.S.-Iran tensions and a rare Bitcoin sale by Strategy.
Bitcoin fell 14.2% during the second quarter, declining from $68,231 to $58,551. Ethereum dropped 25.4%, while XRP fell 22.5%.
Investment demand through ETFs also weakened noticeably. U.S. spot Bitcoin ETFs recorded net outflows of $4.9 billion in the second quarter, ten times the amount recorded in the first quarter. It was the third consecutive quarter of net outflows.
Spot Ethereum ETFs also posted net outflows for a third straight quarter. Net withdrawals totaled $715.5 million in the second quarter.
Their total assets under management fell to $8.5 billion, the lowest level since the second quarter of 2025, indicating weaker demand for cryptocurrency investments.
Crypto assets moved in the opposite direction from U.S. stocks during the quarter. The S&P 500 rose 13.9% and the Nasdaq gained 19.8%, while Bitcoin declined 14.2%.
Strategy's unusual Bitcoin sale also weighed on investor sentiment. The company sold 32 Bitcoin for about $2.5 million between May 26 and May 31.
It was Strategy's first Bitcoin sale since 2022, and the proceeds were used to fund dividends on its preferred shares.
Trading liquidity also declined rapidly alongside prices. Average daily trading volume across the cryptocurrency market fell 20.9% from the previous quarter to $93.1 billion.
Spot trading volume at the ten largest centralized exchanges fell 27.9% to $1.95 trillion, while Bitcoin's average daily trading volume declined 25.4% to $35.9 billion.
The figures indicate that lower prices failed to attract sufficient new buying demand.
Stablecoins, which are widely viewed as funds available for crypto investment, also contracted. Their combined market capitalization stood at $305.1 billion at the end of the second quarter, down 1.6%, or $4.84 billion, from the previous quarter.
It was the first quarterly decline since the third quarter of 2023, suggesting that some investor funds may have left the cryptocurrency market.
The market capitalization of Circle's USDC fell by $3.67 billion to $73.5 billion. The market values of USDS and USDe declined by $1.97 billion and $1.43 billion, respectively, as yields on their yield-bearing products fell.
By contrast, USDT's market capitalization increased by $340 million to $184.4 billion, raising its market share to 60%.
“The simultaneous decline in cryptocurrency prices and stablecoin market capitalization is a clear sign that capital is leaving the industry,” CoinGecko said.
