It’s common knowledge in the crypto market that the circulating supply of Tether (USDT) has a direct impact on Bitcoin price. So with Tether’s market cap spiking to a new YTD-high right now, should we expect BTC to follow closely behind? Let’s take a look.
Bitcoin/ Tether Analysis
In the chart above drawn by Bitcoinist’s senior analyst, Filb Filb, we can see a direct relationship between Bitcoin’s price and Tether’s market capital – particularly over the last 10 months (blue and green lines respectively).
On several occasions, Tether’s circulating supply (represented by its market capitalization) has proven that it has a delayed magnet-like effect on Bitcoin’s price whenever it rises or falls. If we take a look at October last year, we can see that Tether’s market capitalization began to rapidly decline ahead of the November bear market that sent BTC packing over 50%. Then, it coincidentally managed to recover almost exactly a month ahead of Bitcoin’s rebound off the bottom in December. Strange.