USDT Market Capitalization Reaches Record High
21 Oct, 2024 ● Crypto News
Tether's United States dollar-denominated stablecoin has reached a new record, surpassing $120 billion in market capitalization for the first time, which could signal a potential crypto rally.
On Oct. 20, Tether's USDT, the largest stablecoin globally, crossed the $120 billion mark, according to the company's website, which provides live updates on the stablecoin's supply.
Stablecoins act as the primary bridge between fiat currencies and digital assets.
A growing stablecoin supply is often seen as a signal of an upcoming bull market, as it suggests that investors are accumulating stablecoins in preparation for investing in cryptocurrencies.
The increasing USDT supply might contribute to a new Bitcoin rally.
In August, Tether minted $1.3 billion worth of USDT in just five days after Bitcoin hit a five-month low of over $49,500 on Aug. 5.
By Aug. 9, the $1.3 billion in USDT helped Bitcoin recover by more than 21%, reaching $60,271 from the market bottom.
Tether’s expanding stablecoin supply could also drive the next "Uptober" rally, a term used in the crypto space to describe October's historically bullish trend for Bitcoin.
Tether’s treasury flows indicate that a substantial portion of stablecoins is being sent to major centralized exchanges, suggesting incoming buying pressure from investors.
Arkham Intelligence data shows that over the past 48 hours, Tether's treasury has sent more than $66 million in stablecoins to Binance and over $20 million in USDT to the Kraken exchange.
On the other hand, when stablecoin inflows slow down, it often leads to a market correction.
For example, on Aug. 12, Bitcoin's price dipped below the $60,000 level, experiencing a nearly 4% correction as institutional purchases of USDT temporarily halted.
Some analysts, looking at historical chart patterns, predict a three-month Bitcoin rally to $92,000 after the downtrend in September.
Historically, October is the second-best month for Bitcoin's performance, with average returns of 21%, second only to November, which sees average monthly returns of over 46%, according to CoinGlass data.
In the previous Bitcoin halving year of 2020, Bitcoin prices surged by more than 27% in October and over 42% in November, part of a six-month rally that extended into March 2021.
For Bitcoin to break out of its current stagnation, it would need to close the week above $68,700, according to well-known crypto analyst Rekt Capital.
Additionally, rising inflows into Bitcoin exchange-traded funds (ETFs) could support Bitcoin’s potential breakout.
On Oct. 17, Bitcoin ETFs surpassed a record $20 billion in total net flows, just 10 months after their launch.
By comparison, gold-based ETFs took nearly five years to reach the same $20 billion milestone.
Sources:
https://cointelegraph.com/news/tether-usdt-record-120-b-market-cap-uptober-signal
https://tether.to/es/transparency/?tab=usdt
https://www.tradingview.com/chart/3Z94myyP/?symbol=BITSTAMP%3ABTCUSD
https://platform.arkhamintelligence.com/explorer/address/TKHuVq1oKVruCGLvqVexFs6dawKv6fQgFs
