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 Bitcoin’s (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.”

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.

Related: Bitcoiners are in profit, but beware of short-term fragility: Glassnode

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.