Data on the issuance and burning of Tether (USDT) stablecoin shows a clear correlation with Bitcoin price cycles. An analysis confirms that changes in USDT volume matter in the crypto market.
Impact of USDT on Bitcoin Market
Over the past decade, Tether's USDt (USDT) issuance has consistently mirrored Bitcoin (BTC) price cycles. Data from Whale Alert shows how USDT issuance and burning relate to Bitcoin price movements from 2015 to early 2025. Currently, USDT's issuance exceeds $144 billion in market capitalization, becoming a key liquidity tool in cryptocurrency markets.
USDT Issuance and Burning
Whale Alert data shows that USDT issuance often coincides with Bitcoin price spikes. For instance, in late October and November 2024, as Bitcoin rose from $66,700 to $106,000, there was a significant $6 billion USDT issuance. Conversely, USDT burning occurs post-market corrections, confirming existing trends.
Future of Stablecoins and Their Influence on Bitcoin
Despite the current relationship between USDT and Bitcoin, experts note that the influence of stablecoins on Bitcoin may weaken with increased regulation and new alternatives emerging. Stricter rules might reduce the flexibility of USDT issuance and other centralized stablecoins.
Thus, the influence of USDT on the Bitcoin market remains significant, though changing regulations and competition may significantly affect its dynamics in the future.
