According to Tether’s website, which tracks updates and performance of their stablecoin, the USDT, in real time, the USDT for the first time ever has crossed the $120B market capitalization mark.
This happened on the 20th of October, indicating a potential rally in the cryptocurrency market.
This reach could signal an inflow of money into Bitcoin and Ether, possibly ending their seven-month downtrend and supporting the “Uptober” narrative.
Significance of Stablecoins
Now, Stablecoins, such as USDT, act as a bridge between traditional fiat currencies and digital assets. A rise in stablecoin supply often indicates that investors are preparing to buy cryptocurrencies, which is viewed as a bullish signal for the market.
Read Also: Tether Reports $6.2B In Profit Surpassing BlackRock’s Profit
Automatically, this means that an increase in USDT supply could spark a Bitcoin rally just like in August when Tether minted $1.3B of USDT, which preceded a 21% Bitcoin recovery after the price had previously dropped.
On the contrary, a lack of stablecoin inflows (as seen in August) can lead to market corrections as seen in August when institutions stopped buying USDT, leading to a drop in Bitcoin’s price below $60,000.
Tether’s market cap hitting $120B, on the other hand, could drive a bullish “Uptober” rally, as October is traditionally a good month for Bitcoin. Inclusively, Tether’s treasury movements to major exchanges like Binance and Kraken also hint at rising buying pressure.
According to Arkham Intelligence data, during the past 48 hours, Tether’s treasury sent over $66M worth of stablecoins to Binance and over $20M worth of USDT to the Kraken exchange.
Changes of a Breakout with Bitcoin
Historically, October is often a strong month for Bitcoin (21% average return) and November even stronger (46% return) according to CoinGlass and based on this, analysts are expecting a three-month Bitcoin rally to $92,000 after September’s downtrend.
A potential breakout for Bitcoin requires it to close above $68,700. According to a popular analyst, Rekt Capital, rising inflows into Bitcoin exchange-traded funds (ETFs) could contribute to this breakout.
What You Should Know
Bitcoin ETFs reached $20B in total net flows in just 10 months, while gold-based ETFs took nearly five years to reach the same milestone. This demonstrates strong institutional interest in Bitcoin.
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