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.