The price of Bitcoin has seen a positive movement, rising by 2.9% on Friday to trade above $67,000 for the first time since April 24. This increase has been attributed to the low inflation levels reported in the latest Consumer Price Index (CPI) data. However, it is important to note that Bitcoin is subject to various influences that can impact its price significantly.
According to a report by blockchain analysis platform LookonChain, Bitcoin may experience another price rally due to the increase in the supply of a specific stablecoin. It was reported that the Tether Treasury has minted an additional 1 billion USDT, indicating a rising demand for the stablecoin. USDT is currently the third largest cryptocurrency and the most dominant stablecoin in the crypto space, with a market cap value of $111.25 billion.
Impact of USDT Supply on Bitcoin’s Price
The rise in the market share of USDT has played a significant role in Bitcoin’s price movement from $27,000 to $73,000 in the past fifteen months. The increase in traders’ liquidity provided by investments in USDT has led to a boost in Bitcoin’s price. With the recent minting of 1 billion USDT by the Tether Treasury, investors are expecting a similar positive effect on Bitcoin’s price, especially during the ongoing crypto bull season.
While stablecoins like USDT have an impact on Bitcoin’s price, other factors such as the BTC spot exchange-traded fund (ETF) market also play a crucial role. Data from SoSoValue shows that net inflows on Friday reached $177.01 million, bringing the total value of the Bitcoin spot ETF market to $12.58 billion. As more traditional finance players enter the market, Bitcoin is expected to see a surge in demand, leading to substantial price gains.
At the time of writing, Bitcoin was trading at $66,853, reflecting a 9.64% gain in the last week. The cryptocurrency is currently in a consolidation phase as it prepares to surpass the $67,000 resistance level. Based on historical price data, Bitcoin is likely to remain a top choice for investors during the ongoing crypto bull season.
The relationship between Bitcoin and stablecoins, particularly USDT, is complex and plays a crucial role in the price movement of the cryptocurrency. While factors like inflation data and ETF market inflows also impact Bitcoin’s price, stablecoin supply has proven to be a significant driver of price rallies. As the crypto market continues to evolve, monitoring the interactions between Bitcoin and stablecoins will be essential for investors and traders alike.