According to a recent study by the on-chain analytics company Glassnode, there is a strong negative relationship between Bitcoin’s price and net USDT flows to exchanges over the current market cycle. The two-year study, which started in December 2023, found that when Bitcoin prices rose sharply, a large amount of USDT left trading platforms.
The paper says that during bullish periods, USDT outflows from exchanges usually ranged from $100 to $200 million per day as traders moved out of stablecoins and locked in profits.
During the October rally, when Bitcoin briefly traded above $126,000, daily net USDT outflows peaked at around $220 million. This shows how strong the profit-taking activity was.
Trends in Minting and Burning Stablecoins
Glassnode’s research also shows that Tether tends to increase USDT supply during uptrends and decrease it during corrections. Whale Alert data from April 2025 backs up this pattern. This mint-and-burn cycle shows that stablecoins are an important source of liquidity.
When demand for trading capital goes up, more stablecoins are made, and when risk appetite goes down, fewer stablecoins are made.
The study says that USDT and Bitcoin are the two biggest digital assets by market cap right now. Stablecoins act as a bridge between risk-on and risk-off positions for both retail and institutional investors.
So, net USDT exchange flows are a good way to tell in the medium term whether money is moving into or out of Bitcoin exposure.
New USAT Launch and Favorable Regulatory Conditions
The research also puts these flow dynamics in the context of shifting U.S. legislation, which changed after the GENIUS Act was passed in July 2025. This act established a legislative framework for stablecoins.
In response, Tether’s leaders announced USAT, a new stablecoin that complies with the GENIUS Act and aims to get institutions to adopt it in the U.S. market.
In March, President Donald Trump signed an executive order to build up a digital asset reserve to handle stolen crypto assets.
However, the plan has not yet been fully implemented. All of these policy changes point to a drive toward clearer guidelines for stablecoin issuers and for anyone who owns a lot of assets on the blockchain.
ETF Outflows and A Changing Base of Investors
Glassnode’s report also points out that there have been large net outflows from spot Bitcoin exchange-traded funds (ETFs), with about $355 billion in net ETF redemptions so far in November, mostly from institutional investors.
This pattern suggests a notable shift in market structure, with larger players actively reallocating their exposure even as retail participation remains a cornerstone of crypto trading.
The combination of strong USDT outflows during rallies, sizable ETF redemptions, and evolving regulation supports Glassnode’s conclusion that tracking Bitcoin and USDT movements together offers a valuable window into changing liquidity, pricing pressures, and volatility across the digital asset market.
