The correlation between USDT stablecoin circulating supply and Bitcoin price performance

[ad_1]

The simultaneous growth of Tether supply and Bitcoin price illustrates the complex market relationship between the two assets.

Currently, there is an extremely interesting correlation between the circulation of the stablecoin USDT and the price performance of Bitcoin.

Specifically, at the beginning of 2023, the USDT supply was approximately 66 billion. But that number increased significantly at the end of the year, reaching a new high of $91 billion.

It is worth noting that while the stablecoin USDT is in sufficient supply, Bitcoin’s price performance has also recorded many positive points. Bitcoin has grown significantly by 61% in the past 60 days. As of this writing, BTC is trading at around $44,000.

BTC price fluctuation candlestick chart.

In particular, there has been a positive correlation between USDT supply and Bitcoin price many times in the past. Based on historical data, we can draw several conclusions:

Most inflows into Bitcoin are via USDT, with most USDT buyers buying Bitcoin

According to Coinlib statistics, most funds flowing into Bitcoin from outside the market are done through USDT, and most USDT buyers buy Bitcoin.

Therefore, the increase in USDT supply can be seen as an indicator for investors to predict Bitcoin price growth.

As long as Tether stops printing USDT, Bitcoin price will fall

Incredibly, this is just a coincidence. If you look closely, you will notice that every time Tether stops printing USDT, the price of Bitcoin begins to enter a downward trend.

There is a strong correlation between USDT and Bitcoin prices.

This correlation does not occur over local time periods like when people often compare the price of gold to the price of Bitcoin, but is an extremely tight correlation. It lasted for many years and was never contradictory.

According to the above figure,

Blue part: Large increase in USDT supply -> Bitcoin price upward trend
Red part: USDT supply stagnant -> Bitcoin price enters a downtrend.

Along with this observation, many questions about “whether there is price manipulation” began to arise. Many people do not believe that USDT is printed more because of demand, but they are willing to believe that USDT is printed more to “make up for the price.” Unfortunately, we have no clear evidence for this.

Current Bitcoin Price

VIC encryption compilation

related news:

Revealing the profits Bitcoin miners are reaping from the BRC-20 craze