According to data from CoinMarketCap, Bitcoin rose by 2.9% on Friday to trade above $67,000 for the first time since April 24. This positive price performance by the maiden cryptocurrency has been attributed to the low inflation levels reported in the latest Consumer Price Index (CPI) data.
However, Bitcoin is an asset subject to the influence of several forces. According to a report by blockchain analysis platform LookonChain, BTC may soon experience another price rally following an increase in the supply of a specific stablecoin.
Can USDT Replicate Surging Effect On Bitcoin?
In an X post on Friday, LookonChain reported that the Tether Treasury has minted an additional 1 billion USDT indicating a consistent rising demand for the stablecoin. USDT which ranks as the third largest cryptocurrency doubles as the most dominant stablecoin in the crypto space with a market cap value of $111.25 billion.
The USDT token has famously recorded much growth in the last year with over 31 billion new tokens minted on the Tron and Ethereum network. Interestingly, LookonChain reveals that this rise in USDT market share contributed significantly to Bitcoin’s ascent from $27,000 to $73,000 in the past fifteen months.
The theory behind this relationship stems from an increase in traders’ liquidity provided by investments in USDT. This increased market liquidity can alter the status of Bitcoin’s supply and demand and oftentimes lead to a rise in BTC’s price.
Following the most recent 1 billion USDT minted by the Tether Treasury, most investors and spectators could be expecting a similar boosting effect on Bitcoin’s price, especially with the crypto bull season in play.
However, Bitcoin’s price in the coming months is still likely to be influenced by other factors 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. As more major traditional finance players gain a piece of this novel market, Bitcoin is expected to experience monumental levels of demand which will translate into weighty price gains.
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BTC Price Overview
At the time of writing, Bitcoin was trading at $66,853, reflecting a 9.64% gain in the last week. The crypto market leader is currently in a consolidation state as it gathers momentum to break past the 67,000 resistance zone.
Bitcoin is likely to remain the “diamond” of the crypto bull season for many investors based on historical price data. However, there remains a need for proper research by all investors and traders before engaging the market.
Featured image from The Independent, chart from Tradingview