Bitcoin shows ‘strong negative correlation’ with USDt activity: Glassnode

Blockchain analytics provider Glassnode reported a “strong negative correlation” between Bitcoin‘s and USDt’s activity over the last two years.

In a Wednesday X post, Glassnode shared a comparison between Bitcoins (BTC) price and net flows of USDt (USDT) to exchanges starting in December 2023. According to the analysis, net outflows of USDT from exchanges coincided with increases in the price of BTC.

“During euphoric phases, USDT typically flows out at –$100M to –$200M/day as investors lock in profits,” said Glassnode. “At the $126K peak [in October], net outflows reached >$220M (30D-SMA); A clear profit-taking signal now easing as flows turn positive again.”

Source: Glassnode

An analysis by Whale Alert in April revealed a distinct correlation between Bitcoin and USDt, with the stablecoin issuer typically minting during bull runs of the cryptocurrency and burning during corrections. The two digital assets remain the first and third largest tokens by market capitalization at about $1.8 trillion and $184 billion, respectively.

Stablecoins and Bitcoin adoption advance amid favorable US regulation

In July, the US government passed the GENIUS Act, a law establishing a regulatory framework for payment stablecoins. Tether CEO Paolo Ardoino said that USDt would comply with the law, but also announced in September that the platform would launch a new GENIUS-compliant dollar-pegged stablecoin, USAT.

The US government and several states in the country have also made efforts to stockpile Bitcoin as part of a strategic reserve. US President Donald Trump signed an executive order in March directing the creation of a digital asset reserve.

Still, reports suggested that the government had yet to enact the plan, which primarily relies on stockpiling seized crypto.