- Tether’s USDT stablecoin reaches a new high of $120 billion in market capitalization.
- Stablecoin inflows to major exchanges suggest possible upward pressure on Bitcoin prices.
- October historically sees strong gains for Bitcoin, with average returns of 21%.
Tether’s USDT stablecoin, the largest in circulation, has reached an all-time high of $120 billion in market capitalization as of October 20. This milestone has sparked renewed speculation about an upcoming rally in the cryptocurrency market, particularly for Bitcoin. Investors often view the growing supply of stablecoins as a sign of increasing demand for digital assets, with stablecoins serving as a bridge between fiat currencies and cryptocurrencies.
Stablecoin Inflows Signal Buying Pressure
Recent data shows significant outflows of Tether from its treasury, with more than $66 million in USDT transferred to Binance and over $20 million to Kraken within 48 hours. This increase in stablecoin inflows to major centralized exchanges indicates that investors may be preparing to buy cryptocurrencies, potentially fueling a new wave of price increases. Analysts believe these developments could help catalyze a rally in Bitcoin, which historically experiences price gains in October.
In previous market cycles, Tether’s growing supply has aligned with periods of increased Bitcoin buying. For example, in August, Tether minted $1.3 billion in USDT over five days, leading to a 21% rise in Bitcoin’s price from its recent low.
Bitcoin’s October Performance Historically Strong
October has traditionally been a strong month for Bitcoin, with an average price increase of 21%, according to historical data. Some analysts predict that Bitcoin could continue to rise throughout the month, with potential to reach $92,000 by the end of the year. This trend aligns with previous years, such as 2020, when Bitcoin saw gains of over 27% in October, followed by a 42% rise in November.
The growing inflows into Bitcoin exchange-traded funds (ETFs) also add to the potential for a breakout. Bitcoin ETFs recently surpassed $20 billion in total net inflows, just 10 months after their launch, a milestone that took gold-based ETFs nearly five years to achieve.
