Stablecoin

2024

Bitcoin

USDC

<ul>
 <li><strong>A substantial issuance of USDT and USDC stablecoins coincides with a rapid V-shaped recovery in Bitcoin’s market value.</strong></li>
 <li><strong>The fresh influx of capital via new stablecoin issuances, particularly after market setbacks, signals robust buying pressure from institutional and major investors.</strong></li>
</ul>
<p>As the cryptocurrency market faced a downturn early last week, an infusion of new stablecoins significantly impacted <a href="https://www.ethnews.com/brokers-shun-crypto-in-hong-kong-is-this-the-end-of-bitcoin-etfs/" rel="noopener noreferrer nofollow">Bitcoin</a>’s trajectory. On Monday, immediately following a market slump, there was a notable issuance of Tether (USDT) and Circle (USDC) stablecoins, augmenting the total supply by approximately $3 billion. This sudden increase in capital flows is intricately linked to Bitcoin’s robust and swift recovery, marking a pronounced V-shaped comeback in its market valuation.</p>
<h2 id="market-dynamics-and-influential-trades">Market Dynamics and Influential Trades</h2>
<p>The destabilization of Bitcoin and other virtual currencies occurred on the 5th, driven by the unwinding of Yen-Carry trades and repercussions from a substantial Ethereum (ETH) sell-off by Jump Crypto. These events <a href="https://www.ethnews.com/insiders-reveal-morgan-stanleys-shocking-bet-on-bitcoin-could-this-be-the-future/" rel="noopener noreferrer nofollow">triggered</a> extensive stop-loss cuts, leading to a temporary market retreat. However, the futures market quickly rebounded due to significant repurchasing activities.</p>
<p>Although Bitcoin’s value momentarily dipped to $49,000, it exhibited a remarkable recovery, escalating to $62,000 by Friday, <a href="https://www.ethnews.com/revealed-why-justin-sun-is-really-moving-millions-in-bitcoin-to-binance/" rel="noopener noreferrer nofollow">fueled by</a> new capital inflows from institutional and large-scale investors responding to the new stablecoin issuances.</p>
<p>According to on-chain data, from Monday onwards, new tokens worth $1.3 billion for USDT and $1.6 billion for USDC were issued and deposited at major exchanges such as Kraken, Coinbase, and OKX. These issuances and deposits are often <a href="https://www.ethnews.com/why-bitcoin-whales-are-hoarding-1-7-billion-worth-of-btc-despite-the-market-crash/" rel="noopener noreferrer nofollow">interpreted</a> as indicators of buying pressure, a recurring phenomenon observed particularly after notable dips in the market.</p>
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 <p lang="en" dir="ltr">1.3B <a href="https://twitter.com/search?q=%24USDT&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">$USDT</a> has been transferred from <a href="https://twitter.com/hashtag/TetherTreasury?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#TetherTreasury</a> to exchanges since the market crash on Aug 5! <a href="https://t.co/BYtMqgVRyZ" rel="noopener noreferrer nofollow">pic.twitter.com/BYtMqgVRyZ</a></p>
 <p>— Lookonchain (@lookonchain) <a href="https://twitter.com/lookonchain/status/1821843647597527070?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">August 9, 2024</a></p>
</blockquote>
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<h2 id="institutional-influence-on-recovery">Institutional Influence on Recovery</h2>
<p>Historically, moments of sharp declines have often been followed by vigorous recoveries. For instance, concerns about governmental <a href="https://www.ethnews.com/investment-alert-morgan-stanley-opens-pandoras-box-with-bitcoin-etf/" rel="noopener noreferrer nofollow">Bitcoin</a> sales and repayments from the Mt. Gox settlement led to a price decrease in early July. Yet, Bitcoin rebounded, ascending to $69,000 by month’s end, reflecting resilience and a positive response to similar market dynamics.</p>
<p>However, ongoing concerns such as potential economic downturns in the U.S. and instability in the Middle East continue to pose risks, suggesting that <a href="https://www.ethnews.com/bitcoin-hits-death-cross-panic-sell-or-the-best-buying-opportunity-of-2024/" rel="noopener noreferrer nofollow">Bitcoin</a> may still explore lower values in the future. Notably, a CryptoQuant post from the 9th highlighted that the price range of $64,000 to $65,000 may act as a short-term realization price for large Bitcoin holders, potentially serving as a resistance level.</p>
<p>This observation underscores the nuanced relationship between market prices and realized prices, where a market price surpassing the realized price suggests an upward trend, while the opposite <a href="https://www.ethnews.com/bitcoin-facing-sharp-52k-decline-is-no-reason-for-panic-these-top-crypto-picks-will-make-u-go-through-any-harsh-times/" rel="noopener noreferrer nofollow">indicates</a> potential downtrends.</p>
<p>This intricate interplay of market forces and institutional strategies <a href="https://www.ethnews.com/venezuelas-cry-for-freedom-encoded-in-bitcoins-blockchain/" rel="noopener noreferrer nofollow">underscores</a> the dynamic and highly responsive nature of cryptocurrency markets, where investor sentiment and on-chain metrics play pivotal roles in shaping market outcomes.</p>
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<p>The post <a href="https://www.ethnews.com/surge-in-stablecoin-issuance-fuels-bitcoins-swift-recovery/" rel="noopener noreferrer nofollow">Surge in Stablecoin Issuance Fuels Bitcoin’s Swift Recovery</a> appeared first on <a href="https://www.ethnews.com" rel="noopener noreferrer nofollow">ETHNews</a>.</p>

Surge in Stablecoin Issuance Fuels Bitcoin’s Swift Recovery

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