Tether and Circle have issued over $2.5 billion in stablecoins in the past week, and 10x research believes continued insurance could trigger a Bitcoin rally.
A recent report shared by 10x Research market researcher Markus Thielen suggests that stablecoins might be the key to unlocking the next Bitcoin rally.
Stablecoin is a type of cryptocurrency whose value is pegged to another asset, such as a fiat currency or gold, to stabilize its price. While bitcoin is known for its unpredictable price swings, stablecoins provide a place of safety for traders and investors who seek to preserve value without entirely exiting the crypto market.
Over $2.8 Billion Issued by Tether and Circle
The 10x Researcher noted that over the past week, nearly $2.8 billion was issued by stablecoin providers Tether and Circle, a peer-to-peer payments technology company that manages stablecoin USDC. This indicates that some institutional investors are pushing fresh capital into the crypto market.
Thielen noted that considering Circle’s connections with more regulated partners compared to Tether, it’s likely that these funds came from U.S. institutions taking advantage of the dip.
At the time of writing, Circle’s USDC in circulation amounted to approximately $34.5 billion, according to data from CoinMarketCap.
On the other hand, Tether’s USDT has a market cap of $116 billion, and earlier today, the stablecoin issuer minted approximately $1 billion worth of USDT, likely for building rather than immediate issuance.
If stablecoin issuance continues, bitcoin could see further gains, according to Thielen.
Can BTC Break the $61k Resistance?
Bitcoin has fluctuated between $58,000 and $62,000 since August 9, after recovering from a drop to $55,000. However, the crypto asset was trading at $58,300 at the time of writing.
The researcher noted that the BTC price looks promising if it stays above $60,000 but cautioned that the rally could lose momentum without increased stablecoin inflows.