An influx of $2.5 billion into stablecoins is expected to potentially cause a significant increase in the Bitcoin price, as detailed in a new report from Markus Thielen, a market researcher at 10x Research.
Bitcoin Price Hike is Coming
In his latest research remarkThielen explains the critical importance of monitoring and analyzing crypto monetary flows, which provide crucial insights into market conditions that can accelerate or inhibit Bitcoin’s price movements. “Traders are often caught off guard by price crashes, overlooking the critical signals these flows provide. However, the reverse is also true; a continued increase in money flows can lead to higher prices, but many also miss these indicators,” Thielen writes.
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The researcher explains that money flows can predict price movements in both directions. April 2024 heralded a price correction as “broad monetary flows largely came to a standstill.” Thielen adds: “A resurgence in some money flows helped lift prices as markets neared bottoms. The critical factor was monitoring the sustainability of these flows, as rallies often lost momentum without sustained support.”
The report highlights the latest activities involving major stablecoin issuers. Thielen points out that Tether struck $1 billion in USDT last night, categorizing it as a stock build rather than an immediate market release. This distinction is key because it suggests a preparatory step for possible future market actions rather than an immediate liquidity injection.
Furthermore, the researcher describes an important observation regarding recent issuances by Tether and Circle, which together amount to almost $2.8 billion. Thielen interprets this as a strong indication that institutional investors are deploying new capital into the crypto market, which historically signals bullish conditions for Bitcoin. “If this issuance trend (not just coin minting) continues, Bitcoin could see further gains,” Thielen notes.
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Further supporting Thielen’s analysis is the on-chain analysis platform Lookonchain reported yesterday via X: “Tether Treasury minted another 1 billion USDT on Ethereum 20 minutes ago. A total of 32 billion USDT has been minted by Tether Treasury in the past year!”
Moreover, Lookonchain may have found a reason for the large issuance of new stablecoins. The company found that significant amounts of USDT flowed into Cumberland. They noted: “In just 8 days, Cumberland has injected 1.04 billion USDT into the crypto market! An hour ago, Cumberland received another 141.5 million USDT from Tether Treasury and transferred it to major exchanges such as Kraken, OKX, Binance and Coinbase.
More bullish catalysts
Crypto analyst Miles Deutscher delivered another reason to be bullish on Bitcoin via X. He noted that current market conditions resemble the multi-month consolidation starting in 2023, indicating a possible end to this phase based on similar chart formations and a sharp decline in retail interest.
“This looks eerily similar to August-October last year. Retail interest is quickly evaporating (YT views have fallen off a cliff in the past week). Apathy among existing market participants. Lack of clear narratives (and #Bitcoin’s price action looks identical too),” said Deutscher.
Charles Edwards, founder of Capriole Investments, added a macroeconomic perspective, noting the expansion of the global money supply as a historical driver of rising Bitcoin prices. “The global money supply is exploding. Moreover, we have just come out of a massive four-year consolidation period. What do you think this means for Bitcoin?” he stated rhetorically, suggesting a bullish view based on this factor.
At the time of writing, BTC was trading at $60,853.
Featured image created with DALL.E, chart from TradingView.com