A $2.5 billion inflow into stablecoins could lead to a significant increase in Bitcoin’s price, according to a new report by Markus Thielen, a market researcher at 10x Research.
A price increase for Bitcoin is imminent
In his latest research note, Thielen explains the importance of monitoring and analyzing cryptocurrency flows, as they provide important insights into market conditions that can either accelerate or inhibit Bitcoin’s price movements. “Traders are often caught off guard by price crashes and miss the important signals these flows provide. However, the opposite is also true: a sustained increase in money flows can lead to higher prices, but many miss these indicators as well,” Thielen writes.
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The researcher explains that money flows can predict price movements in both directions. In April 2024, a price correction was imminent as “broad money flows largely came to a halt.” Thielen adds: “A resurgence of certain money flows helped lift prices as markets approached their lows. The key factor was monitoring the sustainability of these flows, as rallies often lost momentum without sustained support.”
The report highlights recent activity from major stablecoin issuers. Thielen points out that Tether minted 1 billion USDT last night, which he classifies as inventory building rather than an immediate market issuance. This distinction is important as it suggests a preparatory move for possible future market action rather than an immediate liquidity injection.
In addition, the researcher makes an important observation regarding the recent issuances by Tether and Circle, which cumulatively amount to nearly $2.8 billion. Thielen interprets this as a strong indication that institutional investors are pouring fresh capital into the crypto market, which historically indicates bullish conditions for Bitcoin. “If this trend of issuance (not just minting) continues, Bitcoin could see further gains,” Thielen notes.
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The on-chain analysis platform Lookonchain further supports Thielen’s analysis and reported yesterday about X: “Tether Treasury minted another 1 billion USDT on Ethereum 20 minutes ago. Last year, a total of 32 billion USDT was minted by Tether Treasury!”
In addition, Lookonchain may have found a reason for the large issuance of new stablecoins. The company found that significant amounts of USDT were flowing to Cumberland. They noted: “In just 8 days, Cumberland pumped 1.04 billion USDT into the crypto market! An hour ago, Cumberland again received 141.5 million USDT from Tether Treasury and transferred them to major exchanges such as Kraken, OKX, Binance, and Coinbase.”
Other bullish catalysts
Crypto analyst Miles Deutscher provided another reason to be optimistic about Bitcoin via X. He noted that current market conditions are similar to the multi-month consolidation that began in 2023, suggesting a possible end to this phase based on similar chart formations and a sharp decline in retail interest.
“This feels eerily similar to August-October last year. Retail interest is fading fast (YouTube views have dropped steeply in the last week). Apathy among existing market participants. Clear narratives are missing (and #Bitcoin price action looks identical too),” Deutscher explained.
Charles Edwards, founder of Capriole Investments, added a macroeconomic perspective, pointing to the expansion of the global money supply as a historical driver of rising Bitcoin prices. “The global money supply is exploding. Also, we just broke out of a massive 4-year consolidation. What do you think that means for Bitcoin?” he asked rhetorically, hinting at an optimistic outlook on that basis.
At press time, BTC was trading at $60,853.
Featured image created with DALL.E, chart from TradingView.com
