Paypal and falling investments in DeFi projects may have influenced cryptomeda’s valuation.
Bitcoin continues on market valuation, reaching more then $ 73 thousand recently. According to a Binance report, there are some reasons behind the wave of appreciation that made BTC break a record price in Brazil.
Besides talking about the growth of institutional investors, the exchange even cites the decline in investments in Decentralized Finance (DeFI) projects as being responsible for the increase in Bitcoin price.
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In addition, the PayPal statement that ‘surrendered’ cryptomyces can also be considered as one of the drivers of Bitcoin Lifestyle in the market. In the last seven days the cryptomoeda has grown almost 15%, according to data from CoinMarketCap.
Bitcoin price goes up
The price of Bitcoin broke a record in Brazil last Wednesday (21). Although cryptomeda is far from the record price in dollars, in the country the devaluation of the Brazilian Real made BTC break R$ 70 thousand.
Until then, this was the record amount that cryptomeda had registered, at a time of complete appreciation on December 16, 2017. However, after reaching R$ 70 thousand, the price of Bitcoin continued to rise.
Thus, for Binance this valuation is linked to the growth of institutional investments in the cryptomoeda market. The exchange report cites companies such as MicroStrategy and Square, which decided to insert Bitcoin in mixed investment funds.
“A number of traditional companies have invested in BTC. Companies like MicroStrategy and Square have added Bitcoins to their balance sheet for their long-term capital allocation strategy”.
Bitcoin Quote this Thursday 22 (Reproduction/CoinMarketCap)
When talking about the increase of institutional investments in Bitcoin, Binance attributes this growth to the world financial instability caused by the New Coronavirus.
According to the exchange, investment funds are betting more on ‘alternative assets’ like Bitcoin.
“Several financial and global institutions (e.g., IMF) have adjusted their expectations for the economic recovery from the OVID-19 crisis, potentially fueling yet another race for alternative assets”.
Paypal and DeFi
The market of cryptomoedas follows the price of Bitcoin back to the level of $ 13 thousand, or yet, approximately $ 73 thousand according to the quotation this Thursday (22).
These numbers reflect a wave of appreciation that began almost a week ago, and continues to raise the price of cryptomoeda which rose $ 3 thousand since it hit a record in Brazil.
Thus, Binance believes that the news about Paypal may be another reason that triggered the recent wave of valuation of Bitcoin. The institution stated that it can trade cryptomoeda in 2021, reflecting positively on the price of cryptomoeda.
Meanwhile, the exchange bets that the DeFi projects also contributed to the resumption of the price of cryptomeda. The platform’s report also points out that investments in these projects have suffered a reduction in recent days, with investors reallocating values in Bitcoin.
“The great slowdown in DeFi mania may have led individuals and institutional investors to rebalance their portfolios toward relatively less risky cryptographic assets such as Bitcoin.
Finally, Binance believes that the price of Bitcoin has risen significantly in the market after there was a drop in the supply of cryptomoedas in exchanges. Therefore, the company mentions that there are currently 400,000 Bitcoins less than the amount of BTCs available in exchanges in January 2020.
Thus, the spot market for Bitcoin may be impacted by the reduction in the supply of cryptomoeda in exchanges. In other words, the quotation can be influenced according to the amount of BTCs available on trading platforms such as Binance.
“According to Glassnode, the balance in Bitcoin on exchanges is about 2.5 million BTC (below ~ 2.9 million in January 2020), potentially impacting the dynamics on the seller side of bitcoin spot markets.