Recent perks in the trading volume of one of the world’s leading stablecoins; Tether, suggests that Bitcoin could be about to embark on another huge price surge up to Bitcoin’s all time high of $20,000.00. Because Tether is a stablecoin, the value of it’s tokens does not change, it’s fixed to the price of the US Dollar (and other cryptocurrencies). The premise of this is that stablecoins give investors a way of buying cryptocurrency via stable means, without having to keep transferring from FIAT to crypto. Tether in short just turns your US Dollars into easier to spend, virtual dollars.
When the volume of Tether peaks, the value of Bitcoin usually follows, because surges in the Tether trading volume means that more investors are looking to buy cryptocurrencies. Nobody buys Tether for the sake of it, it’s always a means to further investment. This is a trend that experts have picked up on, one that now has many believing Bitcoin could be about to reach the stars again.
Cointelegraph have published some stats about Bitcoin that suggest there is a correlation between the increasing Tether trading volume and Bitcoin’s more recent price hikes:
“Bitcoin is consolidating near $11,800 (a resistance formed in Q1 2018) after bouncing off the double bottom at $9,500. This level now serves a strong weekly support and FilbFilb believes consolidation below resistance is a bullish indicator. A break above $14,000 also represents a new 2019 all-time high and the news event surrounding this event could lead to an influx of capital from investors of various ilk. In combination, these factors make a strong bullish case for Bitcoin price in the run up to the May 2020 halving.”
What will happen next then? Well, the figures are suggesting that the trading volume of Tether is only going to get greater. Eventually however this will start to decline as those Tether tokens start to be exchanged for other cryptocurrencies. Because Bitcoin is by far the biggest, then we can assume that the majority of this value will move into Bitcoin, if it does, the price of Bitcoin will soar as a result of this new interest. There is of course a chance that these tokens could be exchanged back into FIAT currency, or could be more widely spread across the markets which would make a Bitcoin bull run less likely. The only thing we can do now is simply wait and see.