According to CryptoPotato, recent findings from CryptoQuant suggest a significant correlation between the supply of Tether (USDT) and movements in Bitcoin's price, particularly since the latter part of 2022. The analysis indicated that the circulating supply of USDT has surged by approximately 30 billion, with each surge traditionally coinciding with a positive impact on Bitcoin's price trajectory. This trend suggests that the influx of USDT supply tends to stimulate growth in the value of Bitcoin, indicating improved liquidity in the market.
The increase in USDT supply has been accompanied by a surge in Bitcoin's price, reflecting heightened investor interest and anticipation surrounding factors like the potential introduction of a spot Bitcoin ETF. There appears to be a delay of approximately one month between changes in USDT supply and corresponding changes in Bitcoin price, implying that shifts in USDT supply may serve as a leading indicator for future trends in Bitcoin's price.
USDT has maintained its position as the dominant stablecoin in the market, nearing a total asset value of $100 billion after experiencing remarkable growth over the past six years. Since the start of 2018, its market capitalization has skyrocketed by an astonishing 6,560%. Paolo Ardoino, the CEO of the stablecoin issuer, attributed this success to a strong performance in the fourth quarter. Meanwhile, USDT has been capitalizing on high yields from US Treasury bills and allocating a portion of its profits towards purchasing Bitcoin.
