Over the past weeks, the crypto market has remained relatively quiet. This has fueled concerns about whether Bitcoin and altcoins will undergo a downturn.

Nonetheless, market observers, citing stablecoin inflows and other reasons, have maintained that the possibility of a bull cycle remains high.

The Stablecoin Market Expands

Blockchain analytics firm IntoTheBlock stated that the stablecoin market capitalization was recovering strongly. Different assets in the industry, including USDT and USDC, added more than $9 billion since October 2023. Now, the stablecoin market capitalization stands at $133 billion.

This surge reflects renewed strength in the stablecoin sector and underscores the injection of significant liquidity into the cryptocurrency industry. In addition, the uptick is a promising indicator of growing investor confidence in the potential onset of a bullish market trend.

“The stablecoin market cap is recovering strongly, adding over $9 billion since October of 2023. The sustained upward trend further reinforces the possibility of an upcoming bull market cycle,” IntoTheBlock said.

Stablecoins Market Capitalization. Source: IntoTheBlock

Crypto analyst Zyre gave a more nuanced explanation. According to the analyst, stablecoins are the “bridge” between conventional finance and the crypto industry. Therefore, the spike in market capitalization shows that the “bridge is expanding to accommodate more crypto enthusiasts.”

Interestingly, Tether’s USDT leads the stablecoin sector with a market capitalization reaching $96 billion. However, JP Morgan analysts expressed concerns about USDT’s dominance, highlighting significant risks to the industry. Instead, they advocate for USDC due to Circle’s regulatory compliance.

The Catalysts for Further Growth

Besides the increasing stablecoin market capitalization, industry experts believe cryptocurrencies would rally because of the impending Bitcoin halving and the recent approval of Bitcoin ETFs.

A recent study reveals increasing optimism regarding the halving’s impact on Bitcoin’s price. Nearly 84% of investors believe it will help push Bitcoin to higher heights.

“More than half of the respondents predict Bitcoin prices during the halving (around April 2024) to range between $30,000 and $60,000, while 30% believe the price would break $60,000,” Bitget revealed.

Similarly, the newly launched Bitcoin ETFs further sets the stage for potential upward momentum in the crypto market. Observers point to the early success of these ETFs as an indication of the significant impact they could have on the overall market.

“Spot Bitcoin ETFs have taken in ~$700 million in net flows this week alone. Absolutely amazing. People overestimated the short-term impact of ETFs and continue to dramatically underestimate the long-term impact,” Bitwise CIO Matt Hougan said.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

Read the full article here

Share.

Leave A Reply

Your road to financial

freedom starts here

With our platform as your starting point, you can confidently navigate the path to financial independence and embrace a brighter future.

Registered address:

First Floor, SVG Teachers Credit Union Uptown Building, Kingstown, St. Vincent and the Grenadines

CFDs are complex instruments and have a high risk of loss due to leverage and are not recommended for the general public. Before trading, consider your level of experience, relevant knowledge, and investment objectives and seek financial advice. Vittaverse does not accept clients from OFAC sanctioned jurisdictions. Also, read our legal documents and make sure you fully understand the risks involved before making any trading decision