Originally published on: August 14, 2024
Stablecoin issuance could hold the key to the next surge in Bitcoin prices, as suggested by market researcher Markus Thielen from 10x Research.
With nearly $2.8 billion issued by stablecoin providers like Tether and Circle in the past week, Thielen believes that fresh capital from institutional investors is flowing into the cryptocurrency market, paving the way for potential upward momentum in Bitcoin prices.
Despite Bitcoin’s recent price fluctuations between $58,000 and $62,000, Thielen emphasizes that breaking past the $60,000 to $61,000 resistance zone will require more than just a lower Consumer Price Index. Real money inflows through stablecoins are likely necessary to fuel a sustained rally in Bitcoin.
Tether recently minted $1 billion of its USDT token for inventory purposes, contributing to its record market capitalization of $115.6 billion. On the other hand, Circle’s USDC coin has seen a 4.5% increase in market capitalization, reaching $34.5 billion, potentially driven by U.S. institutions capitalizing on market dips.
Thielen points out that while Bitcoin’s price action appears promising above $60,000, stronger stablecoin inflows are crucial to maintaining this rally’s momentum.
In the absence of external factors like changes in the macro environment or a more accommodative Federal Reserve, Bitcoin may continue to experience short-term trading sluggishness, according to Thielen’s analysis.
As Bitcoin prices see a 3.2% increase, surpassing $61,000 in early trading on August 14th, the role of stablecoin issuance in shaping the cryptocurrency market’s future trajectory becomes increasingly evident.
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