Increase in USDT Supply Correlates with Bitcoin Price Explosion

CryptoPotato reports that recent research from CryptoQuant indicates a noteworthy association between the supply of Tether (USDT) and fluctuations in the price of Bitcoin, specifically starting from late 2022. The analysis revealed that there has been an approximate 30 billion USDT increase in circulation supply. Historically, each surge in USDT supply has been accompanied by a positive effect on the price trajectory of Bitcoin. This observation implies that an increase in the supply of USDT has a propensity to incite appreciation in the worth of Bitcoin, thereby signifying enhanced market liquidity.

A surge in the price of Bitcoin has accompanied the increase in USDT supply, reflecting heightened investor interest and anticipation regarding factors such as the potential introduction of a spot Bitcoin ETF. A correlation between fluctuations in USDT supply and corresponding changes in Bitcoin price seems to exist, suggesting that changes in USDT supply could potentially function as a precursory indicator for forthcoming price trends in Bitcoin.

USDT has maintained its market-dominant status as the preeminent stablecoin, approaching $100 billion in total asset value following six years of phenomenal growth. Significantly, its market capitalization has increased by an astounding 6,560% since the beginning of 2018. The CEO of the stablecoin issuer, Paolo Ardoino, ascribed this achievement to a robust fourth-quarter performance. In the interim, USDT has been utilizing the high yields on US Treasury bills to finance the purchase of Bitcoin with a portion of its profits.