Stablecoin

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An increase in stablecoin issuance could be the key to the next Bitcoin surge, according to 10x Research market researcher Markus Thielen.&nbsp;
Nearly $2.8 billion was issued by stablecoin providers <a href="https://cointelegraph.com/explained/what-is-tethers-gold-backed-stablecoin-alloy-ausd">Tether</a> and Circle in the last week, indicating that “some institutional investors are injecting fresh capital into the crypto market,” stated the head researcher at 10x Research on Aug. 14.
He <a href="https://mail.10xresearch.co/p/bitcoin-traders-speculate-potential-bullish-impact-25-billion-stablecoin-inflow" target="_blank" rel="noopener nofollow">added</a> that if stablecoin issuance continues, it could result in upward momentum for Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) prices:
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 “If this trend of issuance (not just minting) continues, Bitcoin could see further gains.”
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Bitcoin has been hovering between $58,000 and $62,000 since Aug. 9, when it climbed from a dip down to $55,000. 
However, for Bitcoin to break above the $60,000 to $61,000 resistance zone, a lower Consumer Price Index won’t be enough on its own, he stated. 
July’s CPI report, a primary measure of <a href="https://cointelegraph.com/news/btc-price-shoots-up-1-5-k-us-cpi-shows-inflation-slowing"></a><a href="https://cointelegraph.com/news/btc-price-shoots-up-1-5-k-us-cpi-shows-inflation-slowing">inflationary pressures in the United States</a>, is due on Aug. 14. 
A sustained rally would likely require “real money buying through stablecoins,” he said. 
<blockquote data-ct-non-breakable="true">
 “A strong stablecoin inflow is essential to make the breakout sustainable, especially since other factors have had less impact on Bitcoin’s rally this year.”
</blockquote>
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-08/ad471ad1-78ff-4b83-ba45-3187e8497834.jpg" alt="Stablecoin issuance could be key to the next Bitcoin rally — 10x Research" title="">
 <figcaption style="text-align: center;">
 Stablecoin minting and BTC price. Source: <a href="https://x.com/10x_Research/status/1823511459768492176" target="_blank" rel="noopener nofollow">10x Research</a>
 </figcaption>
</figure>
The researcher noted that<a href="https://cointelegraph.com/news/bitcoin-sell-pressure-risk-as-1-7b-in-dormant-btc-moves-over-2-days"> Bitcoin’s price action</a><a href="https://cointelegraph.com/news/bitcoin-sell-pressure-risk-as-1-7b-in-dormant-btc-moves-over-2-days"></a> “looks promising” if it can remain above $60,000, “but without stronger stablecoin inflows, this rally could lose momentum.”
On Aug. 13, Tether <a href="https://x.com/paoloardoino/status/1823331317624311866" target="_blank" rel="noopener nofollow">minted</a> $1 billion of its Tether (<a href="https://cointelegraph.com/tether-price-index">USDT</a>) token. However, this was for inventory building rather than immediate <a href="https://cointelegraph.com/explained/what-is-cryptocurrency-insurance-and-how-does-it-work">issuance</a>, Tether CEO Paulo Ardoino noted.
Tether’s market capitalization has increased by around a billion dollars over the past week, propelling it to a record $115.6 billion, <a href="https://tether.to/en/transparency/" target="_blank" rel="noopener nofollow">according</a> to the company.
Meanwhile, Circle’s market capitalization has increased by 4.5% since the beginning of August, and it now has $34.5 billion in USD Coin (<a href="https://cointelegraph.com/usdc-price-index">USDC</a>) in circulation. 
“Given Circle's ties to more regulated counterparties than Tether, these flows likely originated from U.S. institutions capitalizing on the dip,” noted Thielen. 
Related: <a href="https://cointelegraph.com/news/bitcoin-price-drops-below-59k-institutional-stablecoin-pause">Bitcoin price drops below $59K as institutions stop buying stablecoins</a>
Without other factors, such as a changing macro environment, a more accommodative Federal Reserve, or <a href="https://cointelegraph.com/news/donald-trump-jr-launching-crypto-platform-take-on-banks">presidential candidate Donald Trump</a><a href="https://cointelegraph.com/news/donald-trump-jr-launching-crypto-platform-take-on-banks"></a> regaining momentum in the polls, “Bitcoin will likely remain sluggish short-term trading,” he concluded.
BTC prices have gained 3.2% on the day, topping $61,000 during early trading on Aug. 14. 
Magazine: <a href="https://cointelegraph.com/magazine/china-crypto-ban-investors/">How Chinese traders and miners get around China’s crypto ban</a>

Stablecoin issuance could be key to the next Bitcoin rally — 10x Research

Cointelegraph

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