Tether’s USDT Reaches Record $120B Market Cap, Signaling Potential ‘Uptober’ Rally

Tether's USDT, the world’s largest dollar-pegged stablecoin, has hit an all-time high of $120 billion in market capitalization, signaling a possible resurgence in the cryptocurrency market.

As of Oct. 20, Tether’s website confirmed that USDT had surpassed this record milestone, showcasing an increase in investor demand for stablecoins. Historically, a rising stablecoin supply often suggests that traders are preparing to invest in digital assets, setting the stage for a potential bull run in the crypto market.

Could USDT Drive a Bitcoin and Ether Rally?

Stablecoins, like USDT, serve as a critical bridge between traditional fiat currencies and cryptocurrencies. An uptick in USDT supply could indicate that investors are poised to deploy this liquidity into assets like Bitcoin and Ether, potentially reversing their recent downtrend.

Tether previously minted $1.3 billion worth of USDT in early August, which helped trigger a 21% recovery in Bitcoin's price after it hit a five-month low. With Tether’s current market cap surge, many believe that a similar rally could occur, especially with October historically being a bullish month for Bitcoin.

The Impact of USDT Inflows on Crypto Exchanges

Recent data from Arkham Intelligence shows that significant amounts of USDT are being transferred to major centralized exchanges. Over $66 million in USDT has flowed into Binance, and another $20 million has been sent to Kraken in the last 48 hours alone, suggesting that buying pressure is building.

However, a lack of USDT inflows can also lead to market corrections. For example, in August, when USDT inflows slowed, Bitcoin’s price dropped below the $60,000 level, illustrating how stablecoin movements can directly impact market trends.

Can Bitcoin Break Out by the End of October?

Historically, October has been one of the most profitable months for Bitcoin, second only to November. According to CoinGlass data, Bitcoin has averaged 21% gains in October and over 46% in November, particularly in halving years like 2020, when Bitcoin rallied 27% in October and 42% in November.

Some analysts predict that Bitcoin could hit $92,000 by year-end if it can close above $68,700 this week. Additionally, Bitcoin ETFs have experienced record inflows, surpassing $20 billion on Oct. 17, just 10 months after launch. This growth, which outpaced gold ETFs in reaching the same milestone, may contribute to Bitcoin’s potential breakout before the end of the month.