Institutional investment and Paypal continue to make cryptomoeda's share price rise and break records in the country.
The price of Bitcoin broke an all-time record in Brazil when it recently surpassed R$86,000. According to Binance Research, this valuation movement may be linked to five reasons that have driven the price of cryptomoeda in recent days.
Thus, in addition to the dollar that drives the BTC in the country, the analysis presented by the exchange lists the reasons behind this record price never seen in Brazil:
Paypal also reverberated in the price increase of Bitcoin, which exceeded US$15,000 in the market, or even more than R$86,000 last Thursday (5). Thus, cryptomeda reached a price never seen before in Brazil.
For Binance, Paypal's announcement is still able to raise the price of Bitcoin. Since the platform said it should offer custody services for cryptomoeda, which can reach over 26 million users who are part of the company.
"PayPal has launched cryptomoeda custody services with a potential reach of up to 26 million merchants worldwide.
The fall of DeFi
If a few months ago decentralized finance (DeFi) projects were pointed out as the "engine" of the cryptomaniac market, today these tokens are losing ground to Bitcoin once again.
Therefore, for Binance, investors are withdrawing resources from DeFi projects to invest in Bitcoin again. This move may explain the recent appreciation of cryptomoeda in the market.
"This may have been explained by individuals and institutional investors rebalancing their portfolios to relatively less risky encryption assets such as Bitcoin.
Investments in Bitcoin represent the best returns on the financial market in Brazil in 2020, as reported earlier by Cointelegraph. According to Binance, the growth in the price of cryptomeda has generated worldwide recognition.
Thus, in the Bitcoin price analysis Binance Research believes that there has been recognition of cryptomoeda as a 'global macro asset hedge' in recent months. The foreign exchange company, which also accepts withdrawals and deposits in Brazilian reais, claims that the R$86,000 price was driven by this recognition by BTC.
"The recent Bitcoin price action may be linked to an increase in public recognition of its potential to serve as a global macro hedge asset.
Apprehension of Justice
Although Bitcoin is not regulated in most countries, the lack of laws for cryptomorphs does not prevent balances from being blocked in court. Last Thursday (5), the Department of Justice blocked R$ 5.3 billion from the Silk Road company.
For Binance, this blockade presents an indirect recognition for cryptomoeda in the US legal sector, in what was called "the biggest seizure ever made by the government.
"The announcement may have contributed to the price movement of the last day (5)".
The growth of institutional investments in Bitcoin may also have contributed to cryptomeda exceeding R$ 86,000. According to Binance, companies such as MicroStrategy and Square reinforce the credibility of cryptomoeda.
In addition to more confidence in Bitcoin, the institutional investment may result in more autonomy for cryptomoeda, which currently has accumulated a valuation of almost 15% over the past seven days.
"Finally, another aspect to consider were the implications of large reputable companies like MicroStrategy and Square investing part of their treasury in BTC. These announcements (and their respective rapid positive returns) could have further legitimized Bitcoin's status as a standalone asset class.