FameEX Hot Topics | Strong Negative Correlation Emerges Between Bitcoin and USDT Usage, Says Glassnode

Glassnode’s latest on-chain analysis has uncovered a powerful inverse correlation between Bitcoin’s price action and the net exchange flows of Tether (USDT), the world’s dominant stablecoin. Since December 2023, every major wave of USDT leaving centralized exchanges has coincided with explosive BTC rallies, while significant USDT inflows have consistently preceded corrections or periods of consolidation.

During euphoric bull phases, investors routinely pull $100–200 million in USDT off exchanges daily to secure profits. When Bitcoin hit its recent all-time high near $126,000 in October, 30-day average net outflows spiked above $220 million, an unmistakable profit-taking signal. That outflow pressure has now eased dramatically and flipped positive, indicating fresh stablecoin liquidity is returning to trading venues and standing ready for the next upward leg.

The pattern echoes earlier Whale Alert findings: Tether historically mints large batches of USDT during Bitcoin bull runs to fuel buying power and burns tokens during downturns to reduce circulating supply. With Bitcoin’s market cap at roughly $1.8 trillion and USDT at $184 billion, the two assets remain the undisputed heavyweight champions of crypto. Their opposing flow dynamics underscore USDT’s dual role as both an exit ramp for realized gains and a reservoir of “dry powder” for future buying sprees.

On the regulatory front, momentum continues to build. The U.S. GENIUS Act, enacted in July, established the first federal framework for payment stablecoins, prompting Tether to affirm full compliance and reveal plans for a new, fully GENIUS-compliant dollar token, USAT. Meanwhile, President Trump’s March executive order directing the creation of a national Bitcoin strategic reserve—primarily via seized assets—remains in early implementation. Together, these moves highlight deepening institutional and governmental integration with the two largest cryptocurrencies by market value.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.