The digital asset market is just getting ready for the next phase of the much anticipated bull run of 2024. The biggest stablecoin Tether’s USD (USDT) is closing in for a $100 billion market when Bitcoin just breached the $1 trillion milestone. The total crypto market cap is also nearing $2 trillion after the positive approval of spot Bitcoin ETF approval. However, it will be keen to look around the key economic indicators such as the US Producer Price Index (PPI).
Dollar dominance in crypto?
Bloomberg Intelligence’s Mike McGlone in a post highlighted Tether’s $100 billion market cap with the rise of stablecoins. He signaled the potential for increased dollar dominance in the market. This shift may pose challenges for commodities and traditional gold, he suggested.
The veteran positioned Tether as a leader in the “crypto dollars” space. However, he reinforced support for the greenback and resistance to commodities and gold in digital markets.
Bitcoin, the original crypto, made massive strides by surpassing a $1 trillion market cap on Wednesday. This rally marked a return to levels last seen in November 2021. With Bitcoin’s price reaching $52,809, a 25-month high, the token has recorded a remarkable 22% surge since the beginning of February.
This bullish momentum is attributed to very strong inflows into US spot bitcoin exchange-traded funds (ETFs), underlining the impact of these financial instruments on crypto prices.
What’s up with ETF?
Spot Bitcoin ETFs saw a $477.4 million net inflow on Thursday. This marked the 15th consecutive day of inflows as demand continues to outpace supply. BlackRock’s iShares Bitcoin ETF (IBIT) led the way with a $339.9 million inflow. It contributed to the sector’s total net inflow of over 61,800 BTC in the last week.
Fidelity’s FBTC recorded a $97 million inflow, while Bitwise’s BITB achieved a total net inflow of $1 billion.
As the crypto market remains stable with broader economic indicators. The upcoming release of US Producer Price Index (PPI) data seems to be crucial here. It is anticipated to influence market sentiments.
Analysts highlight the importance of PPI numbers as leading indicators for Consumer Price Index (CPI) inflation. Expectations for a decline in headline PPI from +1.0% to +0.6% YoY in February could signal potential disinflation in the coming months.
It will be important to see where Bitcoin will head next. A favorable print, indicating lower inflation, is likely to buoy risk assets as it aligns with expectations for a softer economic environment.
