Tether (USDT), the largest stablecoin in the world, has recently printed an additional $1 billion, pushing its market capitalization to over $110 billion. This surge in USDT issuance may have a significant impact on Bitcoin (BTC), potentially driving it to new all-time highs.
Over the past 24 hours, Tether’s Treasury has minted $1 billion worth of USDT, bringing the total for the year to $31 billion. According to a post from Lookonchain on May 17, this recent increase in USDT supply played a crucial role in Bitcoin’s price surge from $27,000 to $73,000.
Tether has also announced its intention to invest 15% of its net profit into Bitcoin, aiming to diversify the assets backing the stablecoin. In fact, on March 31, Tether acquired 8,888 Bitcoin valued at $618 million, making it the seventh-largest Bitcoin holder globally, as reported by Bitinfocharts. Presently, Tether’s wallet holds over 78,317 BTC, worth more than $5.18 billion, one year after revealing its plans to diversify into Bitcoin.
The price movement of Bitcoin continues to rely heavily on institutional inflows into spot Bitcoin exchange-traded funds (ETFs). According to Dune, the United States Bitcoin ETFs experienced positive net inflows for the second consecutive week, accumulating over $200 million in cumulative net flows thus far.
Institutional inflows from ETFs have played a significant role in Bitcoin’s recent rally to new all-time highs. By February 15, Bitcoin ETFs accounted for approximately 75% of new investments in the world’s largest cryptocurrency as it surpassed the $50,000 milestone.
The price action of Bitcoin has confirmed a breakout on the daily chart, with the $65,000 level acting as strong support for BTC, according to TradingView. Additionally, on the monthly chart, Bitcoin has successfully turned its previous resistance into support, as highlighted by popular crypto analyst Rekt Capital on May 16.
However, there is a possibility that Bitcoin may experience a temporary correction, potentially dropping below $63,500, before reclaiming the psychological level of $70,000. ScorehoodAI, an AI-based predictions algorithm, suggested this scenario in a post on May 16. If such a correction were to occur, it could result in the liquidation of over $1.76 billion worth of leveraged long positions, with Coinglass data indicating that liquidations could reach $1.87 billion if the price falls below $63,000.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment or trading decisions.