An uptick in stablecoin issuance may be pivotal for Bitcoin’s next price surge, according to Markus Thielen, a market researcher at 10x Research.
In the past week, Tether and Circle have issued nearly $2.8 billion in stablecoins, suggesting that “some institutional investors are injecting new capital into the crypto market,” Thielen noted on August 14.
He further explained that if this trend continues, it could drive Bitcoin prices higher:
“If the trend of stablecoin issuance persists, Bitcoin might experience additional gains”.
Bitcoin has been fluctuating between $58,000 and $62,000 since August 9, when it rebounded from a low of $55,000.
However, simply having a lower Consumer Price Index (CPI) might not be sufficient for Bitcoin to break through the $60,000 to $61,000 resistance level, he added.
The CPI report for July, which measures inflationary pressures in the U.S., is set to be released on August 14.
For a sustained rally, “real money buying through stablecoins” is crucial, Thielen emphasized.
“A significant inflow of stablecoins is necessary to make the breakout sustainable, especially since other factors have had a minimal impact on Bitcoin’s performance this year.”
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The researcher highlighted that Bitcoin’s price action appears promising if it stays above $60,000, but “without stronger stablecoin inflows, the rally might lose momentum.”
On August 13, Tether minted $1 billion worth of its USDT token. Tether CEO Paulo Ardoino clarified that this minting was for inventory purposes rather than immediate issuance.
Tether’s market capitalization has surged by approximately $1 billion over the past week, reaching a record $115.6 billion.
Meanwhile, Circle’s market cap has grown by 4.5% since early August, with $34.5 billion in USD Coin (USDC) now in circulation.
Thielen speculated that Circle’s flows likely come from U.S. institutions taking advantage of market dips, due to Circle’s more regulated counterparties compared to Tether.
Without additional factors like a changing macro environment, a more accommodating Federal Reserve, or political developments such as Donald Trump gaining momentum in the polls, Thielen concluded that “Bitcoin might continue to see sluggish short-term trading.”
As of August 14, Bitcoin prices have risen by 3.2%, exceeding $61,000 in early
Cre: cointelegraph
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
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