An influx of $2.5 billion worth of stablecoins has the potential to drive a significant enhance in the price of bitcoin, according to a modern report by Markus Thielen, market analyst at 10x Research.
Bitcoin price enhance is coming
In their latest research noteThielen explains the critical importance of monitoring and analyzing cryptocurrency flows, which provide key insights into market conditions that can accelerate or derail Bitcoin’s price movements. “Traders are often caught off guard by price crashes, ignoring the critical signals these flows offer. However, the converse is also true; a steady increase in money flows can drive higher prices, but many also fail to notice these indicators,” Thielen writes.
The researcher explains that money flows can predict price movements in both directions. April 2024 signaled a price correction as “broad money flows largely ceased.” Thielen adds that “a resurgence in some money flows helped lift prices as markets approached bottom. Monitoring the durability of these flows was critical, as rallies often lost momentum without further support.”
The report highlights recent activity involving major stablecoin issuers. Thielen points out that Tether minted $1 billion in USDT last night, classifying it as a build of inventory rather than an immediate market issuance. The distinction is crucial because it suggests a preparatory step for potential future market activity rather than an immediate injection of liquidity.
In addition, the researcher details an crucial observation regarding the recent issuance of Tether and Circle, which together amount to almost $2.8 billion. Thielen interprets this as a forceful signal that institutional investors are investing fresh capital into the cryptocurrency market, which has historically signaled bullish conditions for Bitcoin. “If this issuance trend (not just minting) continues, Bitcoin could see further gains,” Thielen notes.
Further support for Thielen’s analysis is the Lookonchain chain analysis platform reported yesterday by X: “Tether Treasury minted 1B USDT on Ethereum again 20 minutes ago. Over the past year, Tether Treasury has minted a total of 32B USDT!”
In addition, Lookonchain may have found a reason for the immense issuance of modern stablecoins. The company found that significant amounts of USDT have flowed into Cumberland. They noted: “In just 8 days, Cumberland has injected 1.04 billion USDT into the cryptocurrency market! An hour ago, Cumberland re-received 141.5 million USDT from Tether Treasury and transferred it to major exchanges such as Kraken, OKX, Binance, and Coinbase.”
More growth catalysts
Cryptocurrency analyst Miles Deutscher delivered another reason to be bullish on Bitcoin via X. He noted that current market conditions are reminiscent of the multi-month consolidation seen in 2023, suggesting a potential end to that phase based on similar chart patterns and a piercing drop in retail interest.
“This is disturbingly reminiscent of August-October last year. Retail interest is quickly evaporating (YT views have plummeted over the past week). Apathy among current market participants. Lack of clear narratives (and #Bitcoin price action looks identical too),” Deutscher said.
Charles Edwards, founder of Capriole Investments, added a macro perspective, noting the expansion of the global money supply as a historical factor in bitcoin’s price growth. “The global money supply is exploding. On top of that, we just came out of a huge 4-year consolidation. What do you think that means for bitcoin?” he asked rhetorically, suggesting a bullish outlook based on that factor.
At the time of going to press, the BTC price was $60,853.
Featured image created with DALL.E, chart from TradingView.com
