Stablecoin Slide Sounds Warning as Crypto Awaits Fed, BOJ

The crypto market enters a week bracketed by 2 central bank meetings under conditions of thinner trading and a declining stablecoin supply. The Federal Reserve will deliver its decision on October 28, and the Bank of Japan (BoJ) follows on October 30.

Neither bank is expected to move on rates. Still, traders’ pricing also points to December increases at each institution. The guidance offered by Fed Chair Kevin Warsh and BoJ Governor Kazuo Ueda therefore becomes the main focus.

Stablecoin Supply Shrinks as On-Chain Trading Slows

In its weekly report for October 19 to 25, Lookonchain recorded a $2.19 billion decline in total stablecoin market cap.

On Ethereum (ETH), the combined Tether (USDT) and USD Coin (USDC) balances declined $1.17 billion across 7 days. Tron (TRX) registered a $495 million outflow, the second-largest among the top 15 chains. The largest increase belonged to Arc, which gained $294 million.

In parallel, decentralized exchange (DEX) trading lost momentum. Spot volume slid 12.21% from the previous week to $44.09 billion, and perpetual futures volume dropped 8.59% to $142.54 billion.

Hyperliquid led Lookonchain’s perp DEX ranking and posted an 8.50% drop in volume to $51.68 billion. Revenue for the week declined 10.17%, and $184 million left its combined USDT and USDC balances.

Even with on-chain activity cooling, public companies kept buying crypto. Strive acquired 6,182 Bitcoin (BTC), taking its total to 43,000 BTC, and BitMine purchased 10,452 ETH worth $24.13 million.

December Rate Bets Put Warsh and Ueda in Focus

For the Fed, which is first to decide, CME Group’s FedWatch tool assigns an 89.5% probability of a hold at 3.75% to 4%. The same tool shows an 82.3% chance of a hike on December 9.

December expectations have shifted, as the implied odds of no change climbed from 7.3% a month ago to 17.7% now. Warsh’s Wednesday press conference should clarify whether the Fed still backs that December path.

Two days later, the BoJ faces a comparable moment, with the policy rate anticipated to remain at 1.25% following September’s increase. Over 80% of economists in a Bloomberg survey expect the next hike to come in December.

Daiwa Securities argues that formally declaring underlying inflation to be at 2% could open the door to a December move. Traders will also parse Ueda’s comments for signals pointing toward December.

Bitcoin enters the two gatherings below $80,000, off 0.27% over the past 24 hours. September provides a precedent.

During that month’s Fed rate increase, Bitcoin moved from roughly $75,350 to more than $76,100 within minutes. If that pattern repeats, a hold that is already priced in may pass quietly, while a decisive December signal could weigh on prices.

After Warsh speaks on Wednesday and Ueda on Friday, the stablecoin supply data will indicate whether crypto buyers have returned. If both lean hawkish, a market already running on thinner volumes and a smaller stablecoin base would be put to the test.