Tether’s USD-denominated stablecoin, USDT, has surpassed a record $120 billion in market capitalization for the first time, hinting at a possible crypto market surge. As the world’s largest stablecoin, this milestone was reached on Oct. 20, according to real-time updates on Tether’s website.
Stablecoins, such as USDT, are often considered a key bridge between traditional fiat currencies and the digital asset market. A rising stablecoin supply is typically seen as a bullish indicator, suggesting that investors are accumulating stablecoins in preparation for buying cryptocurrencies.
The increased supply of USDT could help trigger a new Bitcoin rally, similar to the one seen in August when Tether minted $1.3 billion in USDT after Bitcoin hit a five-month low of $49,500. Following this, Bitcoin saw a 21% recovery, climbing to $60,271 within just a few days.
This surge in USDT could contribute to what the crypto community calls an “Uptober” rally, as October is historically a favorable month for Bitcoin prices. A notable portion of Tether’s treasury has been sent to major centralized exchanges like Binance and Kraken, signaling incoming buying pressure.
On the other hand, a drop in stablecoin inflows often precedes market corrections. For example, in August, when institutional buying of USDT slowed, Bitcoin briefly fell below the $60,000 mark.
Some analysts are optimistic about Bitcoin’s prospects in the coming weeks. Historical data suggests that Bitcoin could see a three-month rally, potentially reaching $92,000 after September’s downtrend. October has traditionally been the second-best performing month for Bitcoin, with average returns of 21%, trailing only November’s 46% average return.
Additionally, growing interest in Bitcoin exchange-traded funds (ETFs) could fuel further price momentum. Bitcoin ETFs recently hit a record $20 billion in net inflows, just 10 months after their launch, a milestone that took gold-based ETFs nearly five years to achieve.