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26 September 2023
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Tether (USDT) issuance may dampen BTC bull run, Chainalysis

  • Chainalysis said that the issuance of USDT tokens may negatively impact the BTC bull run. 
  • Economist Philp Gladwell noted that the inflow of Tether to exchanges had stunted BTC’s price upsurge.

Chainalysis has recently suggested that the new issuance of Tether (USDT) may negatively impact Bitcoin’s bull run. Philip Gradwell, Chainalysis’ chief economist, said: 

Newly issued Tether arriving at exchanges can be used to buy Bitcoin just as much as existing Tether can be. But making this distinction shows that in the current market, fiat would be driving Bitcoin buying to an even greater extent if there had not been new Tether issuance arriving at exchanges.

Gradwell noted that the change in price is mostly affected by the fiat inflow into the market. He said that if Tether had not been creating new coins, then more fiat money would have entered the market. 

Data by Chainalysis suggests that in the last year, the value of Tether sent to exchanges equaled 48% of the value of BTC sent to exchanges. So there was enough Tether to buy almost half of the Bitcoin for sale. Gradwell concluded that the other half must have been acquired with fiat, arguing that the other Bitcoin trading pairs’ role was insignificant. 

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