🕵 Correlation between USDT minting and Bitcoin price movements!🔍
Many researchers and analysts have suggested a correlation between USDT minting and Bitcoin price movements. Some even argue that Bitcoin bull runs are largely influenced by Tether’s activities.
While this theory is widely discussed, I couldn’t find any recent charts to back it up—which, frankly, is surprising for such a popular topic.
That said, I tend to approach externally created charts, especially from prominent crypto analytical platforms, with skepticism. I prefer to extract and process blockchain data myself to ensure that my conclusions are based on raw, verifiable information.
So, that’s exactly what I did today.
This analysis is based entirely on data from the Ethereum blockchain, one of the primary platforms for Tether transactions. Of course, Tether operates across multiple chains, but I chose to focus on Ethereum for this study. Admittedly, I didn’t include data from other blockchains—not because it’s unimportant, but because I hope someone else might explore it with even greater detail. For now, my findings are captured in a single, self-created chart.
I created a chart comparing Bitcoin Price 📈 with USDT Minting Events 💵.
The blue vertical lines represent the dates when USDT was transferred from the Multisig wallet to the Tether Treasury, marking the entry of new Tether into circulation. The height of each line corresponds to the amount minted, measured in millions.
This visualization offers an intriguing perspective on how Tether issuance aligns with Bitcoin's price movements. Such correlations highlight the significant role Tether plays in shaping the price dynamics of the world’s number one cryptocurrency.
Let’s take a closer look at this chart, focusing on the minting dates and the corresponding price actions.
1. Yearly Emissions
Let’s start with a simple summary of how much USDT has been issued each year. By analyzing all minting records on the Ethereum blockchain, I compiled the following figures:
Year USDT Issued (in millions) 2019 2,140 2020 10,960 2021 26,700 2022 0 2023 11,750 2024 28,000
One thing that immediately stands out is the complete absence of minting activity on the Ethereum blockchain throughout 2022—a period of 14+ months of silence.
This wasn’t surprising given how challenging the year was for the crypto industry. We witnessed the collapse of LUNA in May, followed by the bankruptcy of FTX in November. These events shook the entire crypto ecosystem, leaving a significant impact on market participants.
2. Tether as Crypto's "Fuel to the Moon"
From autumn 2020 to spring 2021, we observe that the size of USDT emissions closely aligns with Bitcoin’s price movements. During this period, it appears that Tether was being used as "fuel" to drive the market upward. Interestingly, even the occasional red candles in Bitcoin’s price seem to correspond to brief pauses in Tether minting.
Similarly, at the end of 2023 and during the autumn of 2024, we see another instance of a correlation between Bitcoin's price increases and a rise in Tether minting. These observations lend support to the idea that Tether plays a pivotal role in driving crypto markets.
But this raises an age-old question: What comes first—the chicken or the egg?
• Does the demand for USDT increase because Bitcoin’s price is rising?
• Or does Bitcoin’s price rise because Tether is being minted?
Tether’s official stance is that USDT emissions reflect growing market demand for stablecoins during bullish periods. However, this doesn’t fully explain instances where Bitcoin prices fell after Tether was minted. Were there times when Tether issuance coincided with price declines?
3. Breaking the Theory
The second half of 2021 challenges the logic that Tether minting always drives Bitcoin prices upward. During this period, we witnessed massive red candles where Bitcoin's price fell by almost half, even as Tether continued issuing billions of USDT. Consider the following examples:
• April 17, 2021: Tether minted 1 billion USDT. Bitcoin fell from $61.3K (a day before) to $60K (on the day of mint) and further to $56.2K (the next day).
• May 11, 2021: Tether minted 1 billion USDT. Bitcoin dropped from $56.6K (on the day of mint) to $49.3K (the next day) and $49.7K (two days later).
• May 18, 2021: Tether minted 1 billion USDT. Bitcoin slid from $42.8K (on the day of mint) to $36.7K (the next day), down from $46.7K just two days prior.
Let’s also consider a longer timeframe, as focusing solely on a couple of days before and after a minting event may not provide the full picture.
• By the end of 2021, Tether minted 4 billion USDT in November and 2 billion USDT in December, yet Bitcoin’s price fell from $63K to $45K during this two-month period.
These examples illustrate how Bitcoin’s price can decline despite significant Tether emissions. It raises questions: without Tether acting as a stabilizing force, would the price have fallen even further during this tough period?
It’s worth noting that in 2022, Bitcoin’s price bottomed out at $16K, and this occurred while Tether remained completely silent.
However, it’s important to remember that minting Tether doesn’t necessarily mean it’s being immediately used to buy Bitcoin or other crypto assets. It’s entirely possible that the billions minted at the end of 2021 were strategically deployed later—perhaps during the autumn of 2022, when market sentiment was dominated by fear, and prices were at multi-year lows.
4. Conclusion
Markets are dynamic, constantly evolving as new forces emerge and old ones fade. Indicators that worked in the past may lose relevance over time, and this seems to apply to Tether as well. Tether before and after 2022 may represent two distinct eras in the crypto market.
Meanwhile, new stablecoins have gained popularity. Some, like TerraUSD (UST), garnered immense attention but collapsed within months, leaving adopters with massive losses. Despite the persistent FUD (Fear, Uncertainty, Doubt) surrounding Tether, it has remained resilient and continues to function as a cornerstone of the crypto ecosystem.
The relationship between Tether and Bitcoin’s price is complex and ever-changing. While there are periods where Tether emissions seem to drive the market, there are just as many instances where its influence is less clear. Understanding these dynamics requires ongoing analysis and an appreciation of the ever-evolving nature of the crypto ecosystem.
In my opinion, Tether has contributed significantly to the adoption and growth of the crypto space. While the original ideals of decentralization and self-sovereignty may seem naïve today, this shift is not Tether’s fault but rather a reflection of our collective greed. The allure of quick profits has driven many to speculate on: shitcoins, shady ICOs, questionable NFTs and now, utterly worthless memecoins.
We willingly gamble, hoping for future wealth, even when it’s clear that most of these "investments" are closer to lottery tickets than sound financial decisions.
Yet, through it all, Tether remains alive, kicking, and arguably essential to the crypto market's survival. For that, I can only thank Tether for what it has done.