A leading crypto analyst says the rapid expansion of one of the largest digital assets by market cap is a remarkably bullish sign for Bitcoin.
The highly-cited pseudonymous analyst, known in the industry as Filbfilb, says the $10.9 billion rise of Tether (USDT) in 2020 suggests traders are storing their capital in the dollar-pegged stablecoin as they prepare to buy BTC.
The analyst notes USDT expansion – which has been on the rise since the coronavirus-related market crash in March – has historically preceded Bitcoin price increases. And Tether has expanded massively in the past month alone, he says.
“Since 30th August, USDT expansion has been $5 billion – that’s [a] 50% increase… FIFTY – that 50% is greater than the ENTIRE USDT cap that took BTC to $14k last time… AND price retracted since by c. 10%. I don’t subscribe to Tether conspiracies, but I do subscribe to supply and demand.
This has to be the craziest chart in crypto right now. The positive correlation of Tether expansion / BTC appreciation in 2019 was quite something. In 2020 Tether has expanded from $4.1 billion to $15 billion – FIFTEEN.
There is little to suggest that constant expansion is for much other than [to] deploy into crypto – either directly to acquire funds, or to provide long side liquidity to make use of the attractive funding rates. The dollar is weak so I don’t buy into that being why either.”
The analyst says Tether gives the market “firepower” to improve, assuming the overall global market doesn’t collapse. He says Tether’s expansion is bullish, though it is “perhaps not time to run just yet.”
In his most recent Bitcoin market update, however, Filbfilb says Bitcoin’s likely going to see a solid price move within a week, predicting a possible rise to at least $11,500.
“We remain cautiously bullish on Bitcoin having seen signs of resilience at the $10k level for the first time since 2019 and arguably it is stronger now than then, where we saw the level eventually give way. A strong move is in the works and is likely to occur within the next 7 days.”
Featured Image: Shutterstock/Daniel Prudek