According to data from CoinMarketCapBitcoin rose 2.9% on Friday, trading above $67,000 for the first time since April 24. This positive price performance of the first cryptocurrency is attributed to the low inflation levels reported in the latest Consumer Price Index (CPI) data.
However, Bitcoin is an asset that is subject to the influence of various forces. According to a report from blockchain analytics platform LookonChain, BTC may soon experience another price rally due to an increase in the supply of a specific stablecoin.
Can USDT Replicate the Bullish Effect on Bitcoin?
In a X message On Friday, LookonChain reported that the Tether Treasury minted another 1 billion USDT, indicating consistently rising demand for the stablecoin. USDT, which is the third largest cryptocurrency, is also the most dominant stablecoin in the crypto space with a market cap value of $111.25 billion.
The USDT token has seen major growth over the past year with over 31 billion new tokens minted on the Tron and Ethereum networks. Interestingly, LookonChain reveals that this rise in USDT market share has significantly contributed to Bitcoin’s rise from $27,000 to $73,000 over the past fifteen months.
The theory behind this relationship stems from an increase in trader liquidity provided by investing in USDT. This increased market liquidity can change the supply and demand status of Bitcoin and often lead to an increase in the price of BTC.
After the most recent 1 billion USDT minted by the Tether Treasury, most investors and onlookers should expect a similar stimulative effect on Bitcoin’s price, especially now that crypto bull season is in play.
However, Bitcoin’s price will likely still be influenced by other factors in the coming months, such as the BTC spot exchange-traded fund (ETF) market. According to data from SoSoValue, Net inflows on Friday reached $177.01 million, bringing the total value of the Bitcoin spot ETF market to $12.58 billion. If more large traditional financial players will capture a piece of this new market, Bitcoin is expected to experience monumental demand, which will translate into significant price gains.
Related reading
BTC price overview
At the time of writing, Bitcoin was trading at $66,853, reflecting a gain of 9.64% in the past week. The crypto market leader is currently in a state of consolidation as it gathers momentum to break past the 67,000 resistance zone.
Based on historical price data, Bitcoin will likely remain the “diamond” of the crypto bull season for many investors. However, there remains a need for proper research by all investors and traders before entering the market.
Featured image from The Independent, chart from Tradingview