BItcoin (BTC) will be receiving a boost from a prominent stablecoin issuer that is likely to support the crypto king’s price in the future, according to digital assets manager CoinShares.
In a new blog update, CoinShares weighs in on Tether’s recent decision to allocate up to 15% of its profits into Bitcoin as part of its new reserve management strategy.
“The announcement from Tether, one of the most prominent US dollar-denominated stablecoins, that has decided to begin purchasing Bitcoin from its profit, is anticipated to have a positive effect on Bitcoin’s price.”
CoinShares says that historically, large purchases like the ones that are about to come from Tether have positively impacted the price of Bitcoin, and should support BTC even if the firm does not invest the full 15% of profits, which would amount to roughly $75 million.
“Our fund flows data reveals that weekly price appreciation where weekly fund inflows ranged from $10–20 million was 2.3%. Although the standard deviation of those observations was 10%, it’s encouraging that 64% of the time, the price movements were positive. This suggests a measurable positive impact from Tether’s decision to progressively increase their Bitcoin holdings.”
Tether’s chief technology officer Paolo Ardoino acknowledged the company’s move on Twitter, explaining its logic.
“Why Bitcoin and not something else? Because Bitcoin is the epitome of a sound and secure monetary system with its decentralized nature and scarcity, Bitcoin is revolutionizing the concept of money and challenging traditional finance.
Bitcoin has defied expectations, shattered boundaries, and provides access to the global financial system to anyone with an internet connection.”
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Source: https://dailyhodl.com/2023/05/22/bitcoin-now-receiving-massive-buy-pressure-from-this-development-according-to-coinshares/