How USDT mints and burns move with Bitcoin price cycles

Over the past decade, issuance of Tether’s USDt (USDT) has consistently mirrored Bitcoin (BTC) price cycles, with mints often clustering around bull runs and burns following corrections.

Data from Whale Alert shows the relation between USDT issuance and Bitcoin price movements by plotting Tether’s net minting and burning alongside the price of Bitcoin from 2015 to early 2025. 

While many in the industry have long speculated about the correlation between USDT supply and BTC performance, this data set provides a clearer timeline for evaluating that relationship.

Tether’s USDT, the world’s largest stablecoin with over $144 billion in market capitalization, has become a key liquidity vehicle in crypto markets and is often viewed as a proxy for broader capital inflows. The data from Whale Alert reinforces how tightly its issuance patterns track with Bitcoin’s price cycles, though the direction of causality remains up for debate.

According to crypto analyst and researcher Mads Eberhardt, a greater supply of stablecoins — including Tether — has historically correlated with positive performance in crypto markets. This relationship is also evident when looking at Tether’s mint and burn chart over time.

“However, it’s important to note that we have not observed this correlation over the past few months,” Eberhardt said. “I expect that as stablecoins see increasing adoption in non-native crypto use cases, this correlation will gradually weaken over time.”

USDT issuance and Bitcoin price spikes

Whale Alert’s data shows a consistent pattern of periods of aggressive USDT minting frequently coinciding with or closely preceding major Bitcoin bull runs. This was also apparent in late 2020 and throughout 2024 when net new USDT issuance climbed into the tens of billions as Bitcoin’s price accelerated upward.

In a more recent example, Bitcoin went on a bull run from $66,700 on Oct. 25, 2024, to over $106,000 on Dec. 16. The first significant mint in this cycle was a $1-billion issuance at the end of BTC’s trip to $72,000 on Oct. 30, before a short-lived correction. Bitcoin had another climb from $65,000 to $75,000, with another $6 billion minted at the end of this rally on Nov. 6. 

Bitcoin posted moderate gains over the next three days, during which Tether minted an additional $6 billion in two batches. This was followed by a sharp rally that pushed Bitcoin to $88,000.

A mint of $6 billion on Nov. 18 marked the beginning of Bitcoin’s next leg up, kicking off a rally that pushed the price to just under $99,000 by Nov. 22. In the same stretch, Tether issued another $9 billion in three separate batches. Another mint of $7 billion on Nov. 23 came just before a brief pullback and Bitcoin’s ultimate surge to $106,000 by Dec. 17.

The timing of USDT mints in late 2024 suggests that issuance can serve as a near-term signal of rising demand — but not necessarily as a pure leading indicator.

With USDT now over a decade old since its 2014 launch, its role in Bitcoin price cycles is dwindling, Ki Young Ju, CEO of blockchain analytics firm CryptoQuant, told Cointelegraph.

“Most of the new liquidity entering the Bitcoin market today is coming through MSTR and [exchange-traded funds], primarily via Coinbase’s BTC/USD market or [over-the-counter] desks. Stablecoins are no longer an important signal for determining Bitcoin’s market direction,” Ju said.

“In fact, the total amount of stablecoins held on exchanges is lower than it was during the 2021 bull market,” he added.

In many of the observed cases, the largest mints occurred during or after price momentum was already underway. 

For example, the $6-billion mint on Nov. 6 came after Bitcoin had already rebounded from $65,000 to $75,000. Similarly, more than $15 billion in USDT was minted between Nov. 18 and 23 amid rapid upward price action rather than ahead of it.

That said, there are several notable exceptions. A pair of mints totaling $7 billion around Nov. 13 and the $7 billion minted on Nov. 23 appeared shortly before fresh rallies, indicating that in some cases, large issuances may anticipate or help catalyze further price movement.

“These days, most newly issued stablecoin liquidity is either for global trade settlements or represents profits from Bitcoin’s rise being converted into liquid form, which increases market cap — not necessarily fresh inflows,” Ju said.

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USDT burns and lag behind Bitcoin corrections

Conversely, periods of sustained USDT burns — when USDT is removed from circulation — often occur during or shortly after market corrections. This pattern suggests that redemptions tend to follow price pullbacks.

This was visible in the weeks after Bitcoin’s December 2024 peak above $106,000. As BTC declined through January and into March 2025, several red bars — representing USDT burns — appeared on the chart.

• Dec. 26, 2024: A major USDT burn of $3.67 billion occurs just after Bitcoin drops from around $106,000 to $95,713.

• Dec. 30, 2025: A smaller burn of $2 billion follows as Bitcoin continues to decline toward the $92,000 level.

• Jan. 10, 2025: A $2.5-billion USDT mint occurs before Bitcoin rebounds to over $106,000.

• Feb. 28: Another $2 billion in USDT is burned following a month-long decline from Bitcoin’s six-digit peaks to around $84,000.

Unlike mints, burns rarely precede downward moves in the same way that some mints appear in front-run rallies. Instead, they tend to confirm what’s already underway. This makes them useful for tracking post-peak behavior and assessing the scale of market cooling, rather than identifying tops in real time.

Such patterns are observed throughout USDT’s existence, including a record-breaking $20-billion USDT burn on June 20, 2022, when Bitcoin tumbled from over $65,000 to around $21,000.

However, experts agree that burns don’t offer definite post-peak signals: “Currently, we have no evidence of a correlation between burns and market tops, nor as a lagging indicator,” Jos Lazet, founder and CEO of asset management firm Blockrise, told Cointelegraph.

Shifting stablecoin landscape impacting the USDT and Bitcoin relationship

While historical data shows a clear relationship between USDT supply changes and Bitcoin price movements, there are several factors that impact the price of Bitcoin, and the industry has yet to find concrete evidence that suggests USDT issuance directly influences the price of Bitcoin, or if they flow directly into Bitcoin.

“It is not feasible to relate USDT supply (or minting) to a specific trading volume, as the majority of the trading against stablecoins happens on centralized exchanges, especially relating to Bitcoin,” Lazet said.

“What can be easily seen is that the (far) majority of the trading volume relates to Bitcoin, and similarly the Bitcoin trading volume is largely done against USDT. However it (probably) won’t be feasible to directly correlate these events.”

While the connection between USDT issuance and Bitcoin price action remains debated, external forces could soon reshape how stablecoins interact with crypto markets. The Markets in Crypto Assets (MiCA) framework places new compliance requirements on stablecoin issuers operating within the European Union. As a result, several exchanges have announced the delisting of USDT from their platforms. 

In the US, the proposed legislation could also reshape how centralized stablecoins like USDT are issued, backed and redeemed. Increased regulatory scrutiny may reduce the flexibility and responsiveness of issuers or prompt a shift toward more compliant alternatives.

Related: Stablecoin adoption grows with new US bills, Japan’s open approach

At the same time, competition is intensifying. Rivals like USDC (USDC), with a strong compliance posture, are gaining ground, especially among institutions. USDC lost a chunk of its market cap in 2022 and 2023 following the Silicon Valley Bank debacle, dropping from around $56 billion to around $24 billion. Since then, it has recovered to an all-time high market capitalization of over $60 billion at time of writing.

Meanwhile, decentralized stablecoins such as Dai (DAI) are appealing to decentralized finance-native users who prioritize censorship resistance and onchain transparency.

Tether’s influence on Bitcoin and the broader crypto market remains significant. But whether USDT mints and burns will continue to serve as reliable indicators of capital flow in the coming years will be influenced by how regulatory forces, user preferences and infrastructure developments reshape the stablecoin landscape.

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Source: Cointelegraph.com
Original Post: How USDT mints and burns move with Bitcoin price cycles