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Stalled USDT Liquidity Threatens Bitcoin Price Further Growth - Here’s Why
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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

Stalled USDT Liquidity Threatens Bitcoin Price Further Growth – Here’s Why

Semilore Faleti
Semilore Faleti
11 months ago
2 mins read
Bitcoin

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The price of Bitcoin has maintained a recovery trajectory over the last week, gaining by a significant 16.25% to move briefly above the $67,000 price mark. Bitcoin investors are likely hopeful the asset will record more price gains and finally embark on a bull run following the halving event in April. However, Bitcoin’s price future gains are theorized to be tied to multiple factors including the liquidity of the stablecoin market.

Why A Stagant USDT Liquidity Is Harmful To Bitcoin?

In an X post on Friday, prominent on-chain analytics platform CryptoQuant emphasized the importance of stablecoin liquidity to an appreciation in Bitcoin’s price. CryptoQuant stated that for premier cryptocurrency to experience further price increases, there is a need for an equal rise in the stablecoin market shares.

Related Reading: Coinbase Analysts Warn: Bitcoin’s Upward Trend Could Hit a Wall — Here’s Why

Stablecoin liquidity, especially USDT, needs to pick up for #Bitcoin prices to rise further.

USDT market cap growth is near 0%, down from 6.6% in March when Bitcoin topped $70K.

Faster growth in stablecoin liquidity is crucial for continued price increases. pic.twitter.com/8AJdq7TzTu

— CryptoQuant.com (@cryptoquant_com) July 19, 2024

 

For context, stablecoins refer to a type of cryptocurrency with a fixed value that is usually pegged to a reserve asset, usually the US dollar. These assets are combined valued at $163.56 billion and are critical to digital asset adoption for users with a fear of market volatility.  In relation to Bitcoin’s price, CryptoQuant specifically references Tether (USDT), the largest stablecoin and third largest cryptocurrency with a market cap value of $113.78 billion, as a major influencing factor. 

The analytics team explains that USDT’s growth in the last month has been near 0% (1.03%), thus suggesting a slight 3.21% increase in Bitcoin’s price over the same period. In contrast, USDT’s market shares grew by 6.6% in March 2024, the same time in which Bitcoin rose from $61,168 to secure a new all-time high at $73,750.

The relationship between both assets could stem from the prominent use of USDT in crypto trading. Thus, a higher level of USDT liquidity could allow traders to increase demand for risky assets, including Bitcoin. According to CryptoQuant, the Bitcoin market, therefore, requires a rapid rise in stablecoin liquidity to maintain its current positive price performance.

Related Reading

Bitcoin Bollinger Bands Squeezing: Is BTC Ready For $140,000?

11 months ago

Analyst Highlights “Dangerous” BTC Price Level

In other news, amidst Bitcoin’s current price rally, popular crypto analyst Ali Martinez has warned that Bitcoin must maintain its price above the $66,385 level to avoid a massive liquidation of about $42.67 million.  At the time of writing, Bitcoin continues to trade at $66,571 with a notable 4.65% gain in the last day. In a similar fashion, the asset’s daily trading volume is up by 38.08% and valued at $37.2 billion.

Bitcoin
BTC trading at $66,553 on the daily chart | Source: BTCUSDT chart on Tradingview.com
Featured image from Big Stock Photo, chart from Tradingview.com
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Semilore Faleti
Semilore Faleti

Semilore Faleti

Semilore Faleti is a cryptocurrency writer specialized in the field of journalism and content creation. While he started out writing on several subjects, Semilore soon found a knack for cracking down on the complexities and intricacies in the intriguing world of blockchains and cryptocurrency.

Read more

Semilore is drawn to the efficiency of digital assets in terms of storing, and transferring value. He is a staunch advocate for the adoption of cryptocurrency as he believes it can improve the digitalization and transparency of the existing financial systems.

In two years of active crypto writing, Semilore has covered multiple aspects of the digital asset space including blockchains, decentralized finance (DeFi), staking, non-fungible tokens (NFT), regulations and network upgrades among others.

In his early years, Semilore honed his skills as a content writer, curating educational articles that catered to a wide audience. His pieces were particularly valuable for individuals new to the crypto space, offering insightful explanations that demystified the world of digital currencies.

Semilore also curated pieces for veteran crypto users ensuring they were up to date with the latest blockchains, decentralized applications and network updates. This foundation in educational writing has continued to inform his work, ensuring that his current work remains accessible, accurate and informative.

Currently at NewsBTC, Semilore is dedicated to reporting the latest news on cryptocurrency price action, on-chain developments and whale activity. He also covers the latest token analysis and price predictions by top market experts thus providing readers with potentially insightful and actionable information.

Through his meticulous research and engaging writing style, Semilore strives to establish himself as a trusted source in the crypto journalism field to inform and educate his audience on the latest trends and developments in the rapidly evolving world of digital assets.

Outside his work, Semilore possesses other passions like all individuals. He is a big music fan with an interest in almost every genre. He can be described as a “music nomad” always ready to listen to new artists and explore new trends.

Semilore Faleti is also a strong advocate for social justice, preaching fairness, inclusivity, and equity. He actively promotes the engagement of issues centred around systemic inequalities and all forms of discrimination.

He also promotes political participation by all persons at all levels. He believes active contribution to governmental systems and policies is the fastest and most effective way to bring about permanent positive change in any society.

In conclusion, Semilore Faleti exemplifies the convergence of expertise, passion, and advocacy in the world of crypto journalism. He is a rare individual whose work in documenting the evolution of cryptocurrency will remain relevant for years to come.

His dedication to demystifying digital assets and advocating for their adoption, combined with his commitment to social justice and political engagement, positions him as a dynamic and influential voice in the industry.

Whether through his meticulous reporting at NewsBTC or his fervent promotion of fairness and equity, Semilore continues to inform, educate, and inspire his audience, striving for a more transparent and inclusive financial future.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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