The growth in the number of active addresses has exceeded the record levels of July 2019. The coupling of Bitcoin with traditional markets makes it more sensitive to contingencies.
Bitcoin’s price continues to be stable, after fluctuating between USD 9,000 and USD 10,000 for over two months. Despite the uncertainty of the global economy, the first cryptocurrency shows several favorable aspects, according to renowned market analysts.
In recent days, a Bloomberg Intelligence report stated that several metrics and indicators favor Bitcoin. According to the document, the cryptocurrency can transcend from being “a highly speculative asset to the crypto equivalent of gold.” Although Bitcoin’s volatility may even decrease in the immediate term, Bloomberg hopes that the recent period of stability will resolve with higher prices.
To support this thesis, the financial company mentions that both Bitcoin’s primary demand and adoption have increased. There are indicators that institutional demand for Bitcoin is comparable to gold-based exchange-traded funds (ETFs), according to the report, an example of which is Grayscale’s Bitcoin-based fund, GBTC.
Additionally, Bloomberg lists other factors that underpin the original cryptocurrency. Among these are the increasing number of used addresses, investment products with more capital flows, and the open interest in futures.
Boom of Gold and Its Correlation with Bitcoin
Last July 8th, there was a record rise in gold prices, to the same levels as in September 2011. In addition to western investors’ demand for gold-based ETFs, the deputy director of the Fed spoke about continuing federal aid as the cause of the abrupt rise in prices.
That same day, Bitcoin recorded a steep rise, confirming that its correlation with gold continues to increase. Even after the crash of the markets on March 12th, Bitcoin has entered a new phase of coupling with traditional markets. In addition to the coincidences with gold, there have been coincidences with the S&P 500 index.
Many bitcoiners consider that the risk of this coupling is that Bitcoin could become more sensitive to external geopolitical and economic events. Along with the negative impact on traditional markets due to a resurgence of COVID-19 infections in the USA, Bitcoin also recorded a sudden, albeit moderate, drop.
DeFi in Full Swing
In recent days, the total value of funds blocked by decentralized finance (DeFi) platforms has exceeded USD 2 billion. In February this year, the level had been above USD 1 billion, but DeFi activity also fell sharply in mid-March. However, the recovery accelerated from USD 1.05 billion on June 15th to USD 2.25 billion on July 10th, a jump of 114%.
This increase in blocked capital reflects that loans on these platforms have become very popular in recent months. The loan dynamic of Yield Farming is such that the platforms offer incentives even to those who apply for loans. The latter can use part of the blocked funds as collateral for ultra-fast loans, which further increases their profits.
Auspicious Bitcoin Trading Volume in Argentina
Bitcoin trading volumes on the P2P platforms LocalBitcoins and Paxful reflect a large rebound between January and June of this year in Argentina. Last January, there was a trading volume in that country equivalent to USD 1.34 million on LocalBitcoins. In June, the trading volume exceeded USD 2.2 million, recording an increase of 64%.
Although the trading volumes on Paxful are much lower, they went from USD 9,986 in January to USD 70,987 in June, which represents an increase of 700%. Exchanges also had a significant increase in the trading volume, according to Matías Bari, CEO, and co-founder of SatoshiTango. The executive said that growth in this market has been around 500% since isolation for the COVID-19 pandemic began.
By Willmen Blanco
