Binance report points out five reasons that made the price of Bitcoin reach R$ 73 thousand

Paypal and falling investment in DeFi projects may have influenced cryptomeda’s valuation.

Bitcoin continues to appreciate in the market, reaching more than R$ 73 thousand recently. According to a Binance report, there are some reasons behind the wave of appreciation that caused BTC to break record prices in Brazil.

In addition to talking about the growth of institutional investors, the exchange even cites the decline in investments in Decentralised Finance (DeFI) projects as being responsible for the increase in Bitcoin prices.

In addition, the PayPal statement that ’surrendered‘ cryptomyces can also be considered one of the drivers of Bitcoin in the market. In the last seven days 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$ 70,000.

Until then, this was the record amount that cryptomoeda had recorded, at a time of complete appreciation on 16 December 2017. However, after reaching R$ 70,000, the price of Bitcoin Blueprint 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 into mixed investment funds.

„A number of traditional companies have invested in BTC. Companies such as MicroStrategy and Square have added Bitcoins to their balance sheets for their long-term capital allocation strategy“.

In talking about the increase in institutional investments in Bitcoin, Binance attributes this growth to the global financial instability caused by 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 a further race to alternative assets.“

Paypal and DeFi

The market for cryptomorphs follows the price of Bitcoin back to the level of US$13,000, or approximately R$73,000 according to the quotation on Thursday (22).

These figures reflect a wave of appreciation that began almost a week ago, and continues to raise the price of cryptomoeda, which has risen R$3,000 since it broke a record in Brazil.

Therefore, Binance believes that the news about Paypal may be another reason that triggered the recent wave of valuation of Bitcoin. The institution said it can trade cryptomoeda in 2021, reflecting positively on the price of cryptomoeda.

Meanwhile, the exchange bet 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 been reduced in recent days, with investors reallocating values in Bitcoin.

„The major 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. As such, the company mentions that there are currently 400,000 Bitcoins less than the amount of BTCs available at exchanges in January 2020.

Thus, the spot market for Bitcoin may be impacted by the reduction in the supply of cryptomoeda at 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 around 2.5 million BTC (down from ~2.9 million in January 2020), potentially impacting the seller side dynamics of bitcoin spot markets.“