Tether reissues USDT on Bitcoin as Morgan Stanley flags demand

Tether has started reissuing USDT on the Bitcoin network in recent days. A Morgan Stanley research note on institutional demand for Bitcoin identified a time window when inflows into spot-Bitcoin products could accelerate.

Morgan Stanley modeled expected inflows into spot-Bitcoin exchange-traded and custody products and identified periods when institutional flows are likely to concentrate. Those projected windows overlap with on-chain activity showing increased issuance of Bitcoin-native stablecoins.

By making USDT available on Bitcoin, Tether allows traders, custodians and platforms to settle dollar transfers directly on the Bitcoin blockchain instead of moving tokens across other chains. Tether has issued USDT on multiple blockchains since launch, including Ethereum and Tron, and previously supported Bitcoin via earlier token protocols.

Trading desks and custody providers preparing for large cash movements favor settlement rails that reduce operational steps. Holding dollar liquidity in a stablecoin that moves natively on Bitcoin can shorten settlement chains for transactions between spot markets, over-the-counter desks and custody services.

On-chain metrics around the return of USDT to Bitcoin show higher token-related address activity and an increase in transfers from wallets linked to major trading venues and custodians. Higher Bitcoin transaction fees and longer confirmation times can slow settlement, and some firms accept those trade-offs to avoid cross-chain swaps and wrapped assets.

Morgan Stanley’s analysis lists execution speed, predictable settlement and ready liquidity as operational requirements during concentrated inflow periods. Firms that provide custody and execution services assess those requirements when choosing which rails to support.

Tether states that USDT is backed by reserves across all supported chains and that issuance responds to user demand. The renewed issuance on Bitcoin gives users who prefer on-chain Bitcoin settlement a stablecoin option native to the Bitcoin network.

Stablecoins are a major source of trading liquidity across crypto markets. The distribution of stablecoins across blockchains affects how quickly market participants can move dollars into and out of Bitcoin positions. Morgan Stanley’s timing analysis offers one explanation for why stablecoin issuers might prioritize Bitcoin as a settlement layer ahead of expected institutional activity.