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 was attributed to the low levels of inflation reported in the most recent Consumer Price Index (CPI) data.
However, Bitcoin is an asset subject to the influence of several forces. According to a report from blockchain analytics platform LookonChain, BTC could soon experience another price rally following an increase in the supply of a specific stablecoin.
Can USDT Replicate the Rising Effect on Bitcoin?
On a X post On Friday, LookonChain reported that Tether Treasury minted an additional 1 billion USDT, indicating a consistent increase in demand for the stablecoin. USDT, which is ranked as the third-largest cryptocurrency, is also the most dominant stablecoin in the crypto space with a market cap of $111.25 billion.
The USDT token has seen massive growth over the past year, with over 31 billion new tokens minted on the Tron and Ethereum network. Interestingly, LookonChain reveals that this increase 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 traders’ liquidity provided by USDT investments. This increase in market liquidity can change the supply and demand status of Bitcoin and often lead to an increase in the price of BTC.
Following the latest 1 billion USDT minted by Treasury Tether, most investors and spectators could expect a similar boost effect on the price of Bitcoin, especially with the cryptocurrency bull season in play.
However, the price of Bitcoin in the coming months will still likely 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 Bitcoin ETF spot market value to $12.58 billion. As more large traditional financial players To gain a share of this new market, Bitcoin is expected to experience monumental levels of demand that will translate into heavy price gains.
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BTC Price Overview
At the time of writing, Bitcoin is trading at $66,853, reflecting a 9.64% gain over the past week. The crypto market leader is currently in a state of consolidation as it gains momentum to surpass the 67,000 resistance zone.
Bitcoin is likely to remain the “diamond” of the cryptocurrency bull season for many investors, based on historical price data. However, adequate research is still required by all investors and traders before entering the market.
Featured image from The Independent, chart from Tradingview