Research Shows Inverse Correlation Between USDT on Crypto Exchanges and Bitcoin's Price

Published at: May 5, 2020

Recent research shows that there is an inverse relationship between the percentage of the Tether (USDT) stablecoin on exchanges and Bitcoin’s (BTC) price.

Cryptocurrency market insights firm Santiment published analysis showing that the percentage of USDT held on exchanges is inversely related to Bitcoin’s price. In a May 4 tweet, the firm noted that the recent correction probably is not a trend inversion in Bitcoin’s movement:

“In spite of the minor $BTC correction over the weekend, prices are beginning to rebound close to $9,000 again. According to our metrics, one thing that is still trending in the right direction is the percent of $USDT on exchanges. As this chart clearly indicates, there is an inverse correlation between Bitcoin's price and USDT's supply on exchanges.”

Santiment also explained that since the percentage of USDT held on exchanges is decreasing, Bitcoin could go beyond $9,000 again.

Neither Santiment nor Tether answered Cointelegraph’s inquiry as of press time.

Stablecoins’ market caps grow

As the cryptocurrency market saw a major downturn in mid-March, altcoins saw their market caps grow. Still, as Cointelegraph reported at the time, Tether — the largest stablecoin by total market value — only gained about 0.5% in four weeks, while Circle’s USD Coin (USDC) saw a 40% increase.

Furthermore, during the recent Bitcoin’s rise to $9,000 Tether minted over 160 million new tokens within 24 hours in just two transactions.

Tags
Blockchain
Bitcoin
Bitcoin Price
Cryptocurrency Exchange
Cryptocurrencies
Stablecoin
Tether
Related Posts
Tether Held on Exchanges Could Help Forecast Bitcoin Bull Runs
A crypto data firm representative explained how Tether’s on chain data can potentially forecast Bitcoin’s (BTC) bull runs. Marketing and social media director at Santiment, Brian Quinlivan, told Cointelegraph on May 7 that the percentage of USDT held on exchanges often anticipates Bitcoin’s bull runs. He explained the principles behind the analysis: “Most USDT isn't just being taken off exchanges to be stored in wallets or cashed out through a FIAT-based platform like Coinbase. When people aren't using USDT, they most often put it in Bitcoin. And what's cool is the fact that this USDT percentage often fluctuates a few …
Blockchain / May 7, 2020
Huobi Debuts Crypto Brokerage as Its Institutional Arm Grows 400% Since Q3 2019
Major cryptocurrency exchange Huobi is launching its first licensed digital asset brokerage, Huobi Brokerage. Huobi, the fifth-largest crypto exchange by daily trading volume as of press time, will now provide brokerage service to its institutional clients, the firm said in a Jan. 21 press release to Cointelegraph. Huobi Brokerage provides simultaneous access to other exchanges and OTC desks via smart order routing Announcing the news at the annual World Economic Forum in Davos, the exchange said that Huobi Brokerage is the first product launched under the Global Institutional Business (GIB), an institutional services-focused division established by Huobi in November 2019. …
Bitcoin / Jan. 21, 2020
OKEx Says Crypto Is the Future of Money for Consumers in Unstable Economies
One of the world’s biggest crypto exchanges by trading volume believes digital currencies can provide financial freedom to consumers in countries where instability and inflation are making fiat payments impractical. In the world of digital technology dominance, traditional global financial systems are facing hard times to transform in order to interact with the overwhelming demands around the globe, especially to developing countries. Issues such as a lack of access to stable banking and the high cost of currency exchange and remittances for migrant workers sending funds back home all contribute to perpetuating existing inequalities. However, cryptocurrency and blockchain technology could …
Blockchain / June 3, 2019
Crypto regulation is coming, but Bitcoin traders are still buying the dip
Looking at the Bitcoin chart from a weekly or daily perspective presents a bearish outlook and it's clear that (BTC) price has been consistently making lower lows since hitting an all-time high at $69,000. Curiously, the Nov. 10 price peak happened right as the United States announced that inflation has hit a 30-year high, but, the mood quickly reversed after fears related to China-based real estate developer Evergrande defaulting on its loans. This appears to have impacted the broader market structure. Traders are still afraid of stablecoin regulation This initial corrective phase was quickly followed by relentless pressure from regulators …
Bitcoin / Dec. 20, 2021
Binance stablecoin BUSD sees a sharp market cap drop amid solvency and mismanagement worries
Stablecoins in the cryptocurrency market help provide USD pegged tokens within the volatile industry. In bull markets, the market capitalization of stablecoins tends to decrease as investors flock to more volatile assets and in bear markets, investors seek shelter in low volatility stablecoins thus increasing their market caps. On Jan. 26, the total market capitalization for stablecoins like Tether (USDT), USD Coin (USDC), Binance USD (BUSD) and Dai (DAI) is over $131 billion. Stablecoins are so crucial to the future of crypto, that Moody’s, a well-respected analytics agency, is planning to develop a scoring system. The scoring system may help …
Technology / Jan. 26, 2023