Stablecoin Surge Poised to Drive Bitcoin’s Next Breakout, Says 10x Research

Stablecoin Surge: The Key to Bitcoin’s Potential Rally Beyond $61K?

Stablecoin Surge – An increase in stablecoin issuance could be the key to Bitcoin’s next significant surge, according to Markus Thielen, a market researcher at 10x Research. Thielen noted that nearly $2.8 billion in stablecoins were issued by Tether and Circle in the past week, signaling fresh capital inflows into the crypto market from institutional investors.

Stablecoin Inflows and Bitcoin’s Potential Growth

“If this trend of issuance (not just minting) continues, Bitcoin could see further gains,” Thielen stated on August 14. Bitcoin prices have been trading between $58,000 and $62,000 since August 9, following a recovery from a dip down to $55,000. Despite this, Thielen emphasized that breaking through the $60,000 to $61,000 resistance zone would require more than just a lower Consumer Price Index (CPI).

The July CPI report, a key indicator of inflation in the United States, is scheduled for release on August 14. Thielen believes that for a sustained rally in Bitcoin prices, real money buying through stablecoins is crucial: “A strong stablecoin inflow is essential to make the breakout sustainable, especially since other factors have had less impact on Bitcoin’s rally this year.”

Tether and Circle’s Recent Issuance

On August 13, Tether minted $1 billion worth of its USDT token. However, Tether’s CEO, Paulo Ardoino, clarified that this minting was intended for inventory building rather than immediate issuance. Over the past week, Tether’s market capitalization has increased by approximately $1 billion, reaching a record $115.6 billion.

Similarly, Circle’s market capitalization has grown by 4.5% since the beginning of August, bringing the total USD Coin (USDC) in circulation to $34.5 billion. Thielen suggested that the recent stablecoin flows from Circle likely originated from U.S. institutions taking advantage of the recent market dip, given Circle’s ties to more regulated counterparties than Tether.

Bitcoin’s Short-Term Outlook

Despite these positive developments, Thielen cautioned that Bitcoin might remain sluggish in the short term without additional factors like a changing macroeconomic environment, a more accommodative Federal Reserve, or renewed political momentum for former President Donald Trump.

As of early trading on August 14, Bitcoin prices have increased by 3.2%, reaching over $61,000. However, Thielen reiterated that continued stablecoin inflows are necessary to sustain this rally and prevent it from losing momentum.

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